Important New Ecommerce Sales Tax Laws in Kansas
Residents of Kansas have undoubtedly been shopping more online and less in brick-and-mortar stores. This is a global trend that has grown exponentially in recent years. The convenience of shopping from home is hard to beat. Granted, you can’t try on that new outfit before you buy it, but retailers make returns and exchanges fast and easy. The trade-off is hard to pass up for many consumers.
Avoiding that pesky state sales tax has also been a benefit that many of us have enjoyed by shopping online, but that is beginning to change. States have been missing out on collecting tax revenue from online sales and are now enacting legislation to do so. The 2018 Supreme Court decision on South Dakota v. Wayfair, Inc. is changing the way ecommerce retailers must handle their business.
Explaining the Remote Seller Nexus
As far back as 2008, states started establishing provisions that would allow them to collect sales tax on purchases made online. Businesses who sell goods on the internet would have to collect the taxes and pay them to the state government. The laws that dictate how the retailer’s relationship with the state works and how they go about remitting the sales tax are referred to as the “Remote Seller Nexus.” These laws, structured around sales volume and transactions within the state, require sales tax collection by the businesses even if they don’t have a physical location in the state. The term for this is “economic nexus.”
Supreme Court Ruling Affects Websites and Sales Tax
The Supreme Court decision on South Dakota v. Wayfair, Inc. paved the way for states to streamline the way they require ecommerce retailers to collect and remit sales tax. Forty-five states in the U.S. require retailers to charge sales tax. A majority of these states intend to use the South Dakota v. Wayfair, Inc. decision to enact legislation affecting online retailers and sales tax collection. The Economic Nexus came online October 1, 2019, and many states have begun enacting and enforcing laws. If your online business sells products outside the state you are based in, you will likely face sales tax collection and remittance under various new state laws.
Rules for Businesses Selling in Kansas
If your business sells to residents of Kansas, you are aware that they have existing provisions regarding sales tax. Their current approach to the law takes on a “Wayfair” view, requiring sellers to collect and remit sales tax, but not establishing an exception for small sellers. Under current laws, when you deliver any goods or merchandise to a buyer in Kansas, state sales tax is due. Several bills have been introduced, attempting to establish sales volume thresholds of $100,000, before retailers would need to collect and remit sales tax on the merchandise they sell to Kansas buyers. Thus far, these bills have all been vetoed, leaving even small retailers with the burden of paying these taxes to the state. This will likely continue to be a topic of debate among Kansas legislators, as many retailers are pushing for the state to enact a small seller exception to its provisions regarding ecommerce sales tax.
Forix Can Help Simplify Online Sales Tax for Your Company
Keeping the appropriate records on sales tax collection and complying with state regulations is a tedious duty for anyone. This onus becomes even heavier for small retailers who likely don’t have the accounting staff to dedicate time to the effort. If you are not careful, additional fees and possible fines can dip into your company revenues and potentially cripple your small business. Even larger retailers may face damaging sanctions if they are not on top of sales tax collection and remittance under new state laws.
If you fear that this additional accounting work may create issues for your business, allow Forix to step in and handle the headache for you. We partner with online tax service providers who have the necessary expertise to ensure your business charges buyers the appropriate taxes and remits those taxes to the state when they are due, eliminating compliance costs and fines for your business.
Selling your products to consumers in Kansas and handling the sales tax collection for these goods may seem like an overwhelming affair. Being aware of their Remote Seller Nexus legislation is a step in the right direction, but having the appropriate experts on hand to make sure you are following the regulations is essential to keep your business afloat. Don’t allow this burden to affect your daily operations. Reach out to Forix right away to see how we can assist you in collecting sales tax online and allow you to focus on making your business’ profits your priority.
Disclaimer: The information in this blog post is provided for general informational purposes only and should not be construed as legal advice from Forix.