How did House Bill 2212 change how often Kansas retailers must file and remit sales tax?

Plain-English summary

Kansas Notice 17-11 explains that Section 9 of House Bill 2212 (2017) amended K.S.A. 79-3607 to raise the thresholds that set how often a retailer must file and remit Kansas sales tax based on the tax collected.

The new thresholds (prior amount to new amount):

• Annual filing (return due January 25 of the following year): annual liability not more than $80 to not more than $400.
• Quarterly filing (due the 25th after each quarter): $3,200 to $4,000 (files quarterly if liability does not exceed this).
• Monthly filing (due the 25th of the following month): applies when liability exceeds $3,200, now exceeds $4,000.
• Semi-monthly prepayment (pay the first 15 days' liability by the 25th): applies when liability exceeds $32,000, now exceeds $40,000.

Because thresholds rose, many retailers file less often. A retailer who was filing monthly might move to quarterly, and so on.

No immediate action needed. The Department routinely conducts an annual review of all sales tax accounts to set the right filing and remitting period. By the end of October 2017, it will notify all retailers whether their account is affected. Affected retailers begin filing and remitting under the new thresholds in January 2018.

What this means for you

Retailers filing Kansas sales tax

• The dollar thresholds for annual, quarterly, monthly, and prepay filing all increased, so you may qualify for less frequent filing.
• Wait for the Department's notice (by end of October 2017) rather than changing your schedule yourself; changes take effect January 2018.

Common questions

What changed? The annual-liability thresholds that determine filing frequency rose -- annual to $400, quarterly to $4,000, monthly above $4,000, and prepay above $40,000.

Do I need to change anything now? No -- the Department reviews accounts and notifies affected retailers by the end of October 2017.

When do changes take effect? January 2018 for affected retailers.

Citations and references

• House Bill 2212 (2017), Section 9 -- amended K.S.A. 79-3607 to raise sales tax filing-frequency thresholds.
• Thresholds: annual $80 to $400; quarterly $3,200 to $4,000; monthly above $4,000; semi-monthly prepay above $40,000 (up from $32,000).
• Department notifies affected accounts by end of October 2017; new schedules begin January 2018.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 17-11

Original ruling text

Tax Policy Group Phone: 785-296-3081
915 SW Harrison St FAX: 785-296-7928
Topeka KS 66612-1588 www.ksrevenue.org
Samuel M. Williams, Secretary Department of Revenue Sam Brownback, Governor

                                       NOTICE 17-11

      SALES TAX FILING AND REMITTANCE FREQUENCY THRESHOLDS ADJUSTED
                                (JULY 1, 2017)

During the 2017 Legislative Session House Bill 2212 was passed and signed into law. Section 9
of the Bill amends K.S.A. 79-3607 to adjust the frequency for making returns and remitting sales
tax that has been collected, based on the amount of tax that has been collected by the retailer.

Under prior law, a retailer who did not collect more than $80 in any calendar year was required to
file a return by January 25th of the following year, and to remit the tax at the time of filing the
return. This threshold has now been increased to $400.

Under prior law, a retailer who collected more than $80 but less than or equal to $3,200 in any
calendar year was required to file returns by the 25th day of the month following the end of each
calendar quarter, and to remit the tax at the time of filing the return. This threshold has now been
increased to $4,000.

Under prior law, a retailer who collected more than $3,200 but less than or equal to $32,000 in any
calendar year was required to file a return for each month, by the 25th day of the following month,
and to remit the tax at the time of filing the return. This threshold has now been increased to
$40,000.

Under prior law, a retailer who collected more than $32,000 in any calendar year was required to
pay the tax due for the first 15 days of the month, along with any amount due for the preceding
month, by the 25th day of that month, and to submit a return for the preceding month at that time.
The retailer was required to pay the tax due for the remainder of the month when they filed the
return for the month in which the tax was collected. This threshold has now been increased to
$40,000.

As amended, this subsection now provides:

        (a) Retailers shall make returns to the director at the times prescribed by this
  section in the manner prescribed by the director, including electronic filing, upon forms
  or format prescribed by the director stating: (1) The name and address of the retailer;
  (2) the total amount of gross sales of all tangible personal property and taxable services
  rendered by the retailer during the period for which the return is made; (3) the total
  amount received during the period for which the return is made on charge and time
  sales of tangible personal property made and taxable services rendered prior to the
  period for which the return is made; (4) deductions allowed by law from such total
  amount of gross sales and from total amount received during the period for which the
  return is made on such charge and time sales; (5) receipts during the period for which
  the return is made from the total amount of sales of tangible personal property and

taxable services rendered during such period in the course of such business, after
deductions allowed by law have been made; (6) receipts during the period for which
the return is made from charge and time sales of tangible personal property made and
taxable services rendered prior to such period in the course of such business, after
deductions allowed by law have been made; (7) gross receipts during the period for
which the return is made from sales of tangible personal property and taxable services
rendered in the course of such business upon the basis of which the tax is imposed. The
return shall include such other pertinent information as the director may require. In
making such return, the retailer shall determine the market value of any consideration,
other than money, received in connection with the sale of any tangible personal
property in the course of the business and shall include such value in the return. Such
value shall be subject to review and revision by the director as hereinafter provided.
Refunds made by the retailer during the period for which the return is made on account
of tangible personal property returned to the retailer shall be allowed as a deduction
under subdivision paragraph (4) of this section in case the retailer has theretofore
included the receipts from such sale in a return made by such retailer and paid taxes
therein imposed by this act. The retailer shall, at the time of making such return, pay to
the director the amount of tax herein imposed, except as otherwise provided in this
section. The director may extend the time for making returns and paying the tax
required by this act for any period not to exceed 60 days under such rules and
regulations as the secretary of revenue may prescribe. When the total tax for which any
retailer is liable under this act, does not exceed the sum of $80 $400 in any calendar
year, the retailer shall file an annual return on or before January 25 of the following
year. When the total tax liability does not exceed $3,200 $4,000 in any calendar year,
the retailer shall file returns quarterly on or before the 25th day of the month following
the end of each calendar quarter. When the total tax liability exceeds $3,200 $4,000 in
any calendar year, the retailer shall file a return for each month on or before the 25th
day of the following month. When the total tax liability exceeds $32,000 $40,000 in
any calendar year, the retailer shall be required to pay the sales tax liability for the first
15 days of each month to the director on or before the 25th day of that month. Any such
payment shall accompany the return filed for the preceding month. A retailer will be
considered to have complied with the requirements to pay the first 15 days' liability for
any month if, on or before the 25th day of that month, the retailer paid 90% of the
liability for that fifteen-day period, or 50% of such retailer's liability in the immediate
preceding calendar year for the same month as the month in which the fifteen-day
period occurs computed at the rate applicable in the month in which the fifteen-day
period occurs, and, in either case, paid any underpayment with the payment required
on or before the 25th day of the following month. Such retailers shall pay their sales
tax liabilities for the remainder of each such month at the time of filing the return for
such month. Determinations of amounts of liability in a calendar year for purposes of
determining filing requirements shall be made by the director upon the basis of amounts
of liability by those retailers during the preceding calendar year or by estimates in cases
of retailers having no previous sales tax histories. The director is hereby authorized to
modify the filing schedule for any retailer when it is apparent that the original
determination was inaccurate.

The amended provisions of the Bill are effective upon publication in the Kansas statutes, but
retailers do not need to make any changes immediately. The Department of Revenue routinely
conducts an annual review of all sales tax accounts to determine appropriate filing and remitting
periods. By the end of October, 2017, the Department will notify all retailers whether their sales
tax account has been affected by this legislation. Those retailers that are affected will begin filing
sales tax returns and making remittance based on the new thresholds beginning in January of 2018.

                                   Taxpayer Assistance

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

                               Taxpayer Assistance Center
                              Kansas Department of Revenue
                                Topeka, KS 66612-1588
                                  Phone: 785-368-8222
                                   Fax: 785-291-3614