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US Kansas imposes sales tax registration threshold for foreign sellers

  • May 24, 2021

From 1 July 2021, an annual $100,000 sales threshold will be imposed for non-resident, or out-of-state, sellers to Kansas consumers. The law comes into effect despite efforts by the Governor to block the introduction of a threshold.

The changes affect facilitating marketplaces from out of state who are enabling non-resident sellers to transact in Kansas. It applies to both goods and services, including some overnight accommodation / house sharing platforms. The threshold is measured on the current or previous year’s turnover, both direct and indirect sales.

Kansas is the only US state with ‘economic nexus’ obligations but without a registration threshold. This means that non-resident sellers or facilitating marketplaces must register in Kansas to collect and remit local sales tax on any sales.

Kansas imposed the economic nexus rule in 2019 following the 2018 South Dakota vs Wayfair Supreme Court ruling. The added economic nexus to the physical nexus (local operations, staff etc) test to the tax determination obligations.

 

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