What vendor discount applied to Kansas and Oklahoma retailers under the reciprocal use-tax agreement?

Plain-English summary

The reciprocal Kansas-Oklahoma use-tax vendor discount dropped to 1% for transactions occurring on or after July 1, 2010, with a $2,500 monthly cap. Kansas retailers received that rate when timely remitting Oklahoma use tax, and Oklahoma retailers received the same rate on timely remitted Kansas Retailers' Compensating Use Tax.

The reciprocity came from an agreement in effect since 1968 under K.S.A. 79-3707(c). The revised notice also says that for returns filed on or after January 1, 2015, Nebraska retailers' Kansas discount became 2.5% of the first $3,000 timely remitted each month and Missouri retailers' discount became 2% of timely remitted Kansas use tax.

What this means for you

Multistate retailers had to apply the reciprocal discount for the retailer's state and reporting period, and only on timely remittances. Confirm current rates before filing a later return.

Citations and references

• K.S.A. 79-3707(c)
• Kansas Notice 14-17 is identified in the source for the later Nebraska and Missouri changes

Subject

Oklahoma Reciprocal Use-Tax Discount Reduction

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 10-06

Original ruling text

Kansas Department of Revenue
Office of Policy & Research
NOTICE 10-06
Revised September 17, 2014
Kansas Discount Rates for Oklahoma Retailers

The Oklahoma Tax Commission announced that effective July 1, 2010, the
vendor sales and use tax discount/remuneration has been reduced from 2 and ¼
percent (2.25%) for certain vendors to one percent (1.0%) for all vendors, with a
maximum cap of $2500 per month. The discount/remuneration rate is the
percentage of sales or use tax collections Oklahoma businesses may retain to
offset the cost of collecting, reporting and remitting Oklahoma Sales and
Compensating Use Tax returns. Because Oklahoma has lowered the
discount/remuneration rate, Kansas retailers filing Oklahoma sales and use tax
returns reporting sales transactions occurring on or after July 1, 2010 will receive
a discount/remuneration rate of only one percent (1.0%) on collected Oklahoma
Use tax.

By Agreement between Oklahoma and Kansas in effect since 1968 pursuant to
K.S.A. 79-3707(c), the discount/remuneration rate extended to Oklahoma
retailers who collect and remit the Kansas Retailers’ Compensating Use Tax is
reciprocal with the discount/remuneration rate extended to Kansas retailers who
collect and remit Oklahoma use tax. Prior to July 1, 2010, this reciprocal rate
was 2 and 1/4 percent (2.25%) of the tax collected when the remittance is timely.

Effective for returns (Form CT-9U) reporting transactions occurring on or after
July 1, 2010 by Oklahoma retailers (i.e. commencing with the July 2010 return),
the Kansas “discount rate” is reduced to one percent (1.0%) of use tax collected,
with a maximum cap of $2500 per month when the remittance is timely.

The discount rate for retailers in Nebraska (3%) and Missouri (3%) remain in
effect for returns filed prior to January 1, 2015, but effective January 1, 2015 for
returns filed on or after that date, the discount rate for retailers in Nebraska will
reduce to 2.5% of the first $3,000 of Kansas Retailers’ Compensating Use Tax
timely remitted each month, and the discount rate for retailers in Missouri will
reduce to 2% of the Kansas Retailers’ Compensating Use Tax timely remitted.
See Notice 14-17 for additional information.

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                         Taxpayer Assistance

Additional copies of this notice, forms or publications are available from our web
site, www.ksrevenue.org. If you have questions about income tax, please
contact:

                      Taxpayer Assistance Center
                    Kansas Department of Revenue
                     915 SW Harrison St., 1st Floor
                       Topeka, KS 66612-1588
                         Phone: 785-368-8222
                          Fax: 785-291-3614