What rate of Kansas consumers' compensating use tax applies to out-of-state purchases used in Kansas after July 1, 2003?

Plain-English summary

Consumers' compensating use tax is what a Kansas resident owes on goods bought from out of state (for example, online or on a trip) and used, stored, or consumed in Kansas when no Kansas sales tax was collected. Under the 2003 Streamlined Sales Tax legislation (2003 House Bill 2005), the rate changed effective July 1, 2003:

• Before July 1, 2003: the rate was the state rate only (then 5.3%).
• On and after July 1, 2003: the rate equals the combined state-and-local sales tax rate in effect where the property is used, stored, or consumed.

The notice's examples:

• A Goodland resident buys a $1,000 Dell computer online, shipped from Texas. The combined Goodland rate is 6.55% (5.3% state + 1.25% Sherman County), so $65.50 use tax is due.
• The same resident buys a $300 camera in Wyoming and pays 5% Wyoming tax. Only the difference is due to Kansas: 6.55% − 5% = 1.55%, or $4.65.

Consumers report the tax on Form CT-10U and use Publication KS-1700 for local rates (and KS-1510 for general guidance). People already registered for consumers' use tax automatically begin receiving Form CT-10U.

What this means for you

If you're a Kansas consumer buying from out-of-state sellers who don't collect Kansas tax, your use tax bill went up on July 1, 2003 — you now owe the full local rate where you use the item, not just the state rate. Credit is given for sales tax you already paid to another state, so you only pay the shortfall up to the Kansas combined rate. Report what you owe on Form CT-10U.

Common questions

Q: I bought something online with no Kansas tax charged. What rate do I owe?
A: The combined state-and-local rate where you use the item (as of July 1, 2003), reported on Form CT-10U.

Q: I already paid another state's sales tax. Do I pay Kansas tax again?
A: Only the difference. If you paid less than the Kansas combined rate, you owe the shortfall; if you paid an equal or higher rate, nothing more is due.

Q: Where do I find the right local rate?
A: Publication KS-1700, the Kansas sales tax jurisdiction code booklet.

Citations and references

• 2003 House Bill 2005 -- Streamlined Sales Tax legislation, effective July 1, 2003.
• Publication KS-1700 -- Kansas sales tax jurisdiction code booklet (local rates).
• Publication KS-1510 -- Kansas Sales and Compensating Use Tax guide.
• Form CT-10U -- consumers' compensating use tax return.

Subject

Kansas Local Consumers' Compensating Use Tax

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 03-02

Original ruling text

Notice
Notice Number: 03-02
Tax Type: Kansas Compensating Tax
Brief Description: Kansas Local Consumers' Compensationg Use Tax
Keywords:
Approval Date: 06/06/2003

Body:
Office of Policy & Research

                                        NOTICE 03-02
                       KANSAS LOCAL CONSUMERS’ COMPENSATING USE TAX

The 2003 Kansas legislature enacted a local compensating use tax takes effect July 1, 2003.

BEFORE JULY 1, 2003, the Kansas compensating use tax rate was the state sales tax rate only – currently 5.3%. ON AND AFTER
JULY 1, 2003, the Kansas consumers’ compensating use tax rate will be equal to the combined (state and local) sales tax rate on
ALL purchases of tangible personal property used, stored or consumed in the state of Kansas.

EXAMPLE #1: On July 1, 2003 Dean Brown, a Goodland, Kansas resident, purchases a $1,000 Dell Computer on-line to be shipped
from Texas to Goodland where it will be used. The combined rate of the Kansas consumers’ compensating use tax due is 6.55% - a
rate equal to Goodland’s combined sales tax rate (5.3% State and 1.25% Sherman County). On and after July 1, 2003, $65.50 of
Kansas consumers’ compensating use tax would be due ($1,000 X.0655 = $65.50).

Kansas consumers’ compensating use tax is a tax paid on goods and merchandise purchased from other states and used, stored or
consumed in Kansas upon which no sales tax has been paid. It is also due if a tax rate less than the Kansas combined (state and local)
is paid at the time of purchase.

EXAMPLE #2: While on vacation in Wyoming, the above Goodland, Kansas resident buys a camera for $300 plus 5% Wyoming
sales tax (4% State & 1% city). Upon returning home, a Kansas compensating use tax of 1.55% or $4.65 is due on the difference
between the combined Kansas consumers’ compensating use tax rate in effect in Goodland, Kansas (6.55%) and the tax rate paid in
Wyoming (6.55% - 5% = 1.55% X $300 = $4.65).

KANSAS SALES TAX JURISDICTION CODE BOOKLET - PUBLICATION KS-1700. As noted, the new law requires Kansas
consumers to remit Kansas consumers’ use tax at a rate equal to the combined sales tax rate in effect at the location where the
property will be used, stored or consumed. All of the sales/compensating tax rates for Kansas cities and counties are found in Pub.
KS-1700, which is available from the department’s web site: http://www.ksrevenue.org/pdf/forms/pub1700.pdf or forms order line:
(785) 296-4937.

FORM CT-10U – Consumers who owe Kansas compensating use tax will report the tax due on Form CT-10U, which is available
from the department’s web site: www.ksrevenue.org or forms order line: (785) 296-4937. Taxpayers who are currently registered to
remit Consumers’ Compensating Use tax will automatically begin receiving Form CT-10U.

ADDITIONAL INFORMATION – Consult the “Kansas Sales And Compensating Use Tax” Information Guide, Publication KS-
1510, which is available from the department’s web site: http://www.ksrevenue.org/pdf/forms/pub1510.pdf or forms order line: (785)
296-4937.

You may also contact the department toll free by calling 1-877-526-7738; press “1” for touch-tone phone (listen briefly), press “5”
for Business Taxes (listen briefly); then press “2” to talk to a consumers’ compensating tax representative.

SAMPLE RETURN – A completed sample return using the information from the two examples above follows on the next page.

SCANNED ATTACHMENTS/DOCUMENTS

Page 2

Double click the above icon to launch Acrobat Reader and view the sample return.

Date Composed: 06/05/2003 Date Modified: 06/20/2003

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