The Kansas state level sales tax rate is increasing from 5.3% to 6.3% effective July 1, 2010. This is almost a 19% increase in the sales tax rate over the previous 5.3%.
The Department has issued some instructions for companies that may be cash basis taxpayers or have service contracts that cover periods under the 5.3% tax rate. To avoid companies remitting more sales tax than they collect from customers the Kansas DOR has issued instructions on how companies can adjust their sales tax returns to ensure that only the amount of tax collected is remitted. State law does not allow for more than one return to be filed for any taxpayer, so if a company properly collected tax at 5.3% and at 6.3% the company will need to use a factor to reduce the taxable sales so that the tax calculated at 6.3% is equal to the tax collected at 5.3%. This downward adjustment is shown on Part II Line N “other allowable deductions”.
Ned Lenhart
President
Kansas Tax Rate