When must a lodging marketplace facilitator collect Kansas sales and transient guest tax on short-term rentals?

Plain-English summary

Kansas Notice 21-24 explains how the marketplace facilitator provisions in 2021 Senate Bill 50 (New Sections 1-4) -- the first Kansas law to recognize marketplace facilitator platforms -- apply to entities that provide lodging. (A companion notice, Notice 21-14, covers marketplace facilitators that sell products.)

What a lodging marketplace facilitator is. A "marketplace facilitator" contracts with sellers to facilitate the sale of products or lodgings through a physical or electronic marketplace it operates and collects the payment from the purchaser. For lodging, it specifically includes a platform through which unaffiliated third parties offer to rent -- for periods of less than 29 consecutive days -- rooms, lodgings, accommodations, homes, apartments, cabins, or residential dwelling units used as sleeping accommodations. It does not include platforms that only provide advertising, that principally provide payment processing, or certain commodity-trading facilities.

What it must collect. A marketplace facilitator must register for, collect, and remit Kansas retailers' sales tax and transient guest tax on the rentals it facilitates -- including additional charges such as extra-guest fees, pet charges, extra bedding/linen, and no-show charges. The type of tax does not depend on where the facilitator or the marketplace seller is located: a facilitator inside or outside Kansas collects Kansas sales and transient guest tax.

Hotel rooms are excluded. By statutory definition, a person or entity that facilitates the sale, rental, or charges for hotel rooms is not a marketplace facilitator. Section 1(b)(2) references K.S.A. 36-501 (the Lodging Inspection Act), which defines "hotel" (a structure offering sleeping accommodations for pay primarily to transient guests with four or more guest rooms) and related terms. For hotel rooms, the hotel (seller) itself collects, reports, and remits the sales and transient guest tax. Rentals of rooms that are not hotel rooms are facilitated by a marketplace facilitator, which collects the tax on the transaction between the property owner (marketplace seller) and the guest.

$100,000 de minimis threshold. Collection and remittance are required beginning July 1, 2021, for facilitators whose calendar-year sales sourced into Kansas exceed $100,000 of "cumulative gross receipts" (which, for the threshold test, includes both the facilitator's own sales and the sales it facilitates; only taxable sales count). In the first year the facilitator meets the threshold it need not collect on the first $100,000 of sales; once the threshold is met, it must collect on all sales to Kansas customers in the following year. A facilitator below the threshold is not required to collect but may do so voluntarily, and should otherwise advise its sellers that they remain responsible for paying the tax.

What this means for you

Short-term rental platforms

• If your platform lets third parties rent rooms, homes, apartments, or cabins for under 29 consecutive days, you are a marketplace facilitator and must collect Kansas sales and transient guest tax on those rentals once your Kansas cumulative gross receipts exceed $100,000.
• You collect Kansas sales and transient guest tax whether your platform or the property owner is inside or outside Kansas, including on extra fees like pet, cleaning-related, and no-show charges.

Hotels and hotel-booking platforms

• A platform that facilitates hotel-room sales is not a marketplace facilitator, so the hotel remains responsible for collecting and remitting sales and transient guest tax on the room and related charges.
• "Hotel" is defined by K.S.A. 36-501 -- generally a structure with four or more guest rooms offering sleeping accommodations for pay primarily to transient guests.

Property owners (marketplace sellers)

• If a facilitator collects and remits the tax on your rental, you do not collect it again on that transaction.
• If a facilitator is below the $100,000 threshold and does not voluntarily collect, you remain responsible for paying the tax directly to Kansas.

Common questions

What is a marketplace facilitator for lodging? A platform that contracts with owners to facilitate rentals and collects the payment, including short-term rentals of rooms, homes, or cabins for less than 29 consecutive days.

What taxes must it collect? Kansas retailers' sales tax and transient guest tax on the facilitated rentals, including related charges such as extra-guest, pet, and no-show fees.

Are hotel rooms included? No -- a platform that facilitates hotel-room sales (hotel as defined in K.S.A. 36-501) is not a marketplace facilitator; the hotel collects and remits the tax itself.

When does the collection duty start? Beginning July 1, 2021, once cumulative gross receipts sourced into Kansas exceed the $100,000 de minimis threshold.

Where can I read about product sales? Notice 21-14 covers marketplace facilitators that sell products rather than lodging.

Citations and references

• Senate Bill 50 (2021), New Sections 1-4 -- the first Kansas provisions recognizing marketplace facilitator platforms; require facilitators to collect and remit tax.
• K.S.A. 79-3603 -- retailers' sales tax; K.S.A. 79-3703 -- compensating use tax (part of the definition of "tax" in the Act).
• K.S.A. 12-1693 and 12-1697 -- transient guest tax imposed by city or county resolution or ordinance.
• K.S.A. 36-501 -- Lodging Inspection Act; defines "hotel," whose room sales are excluded from marketplace-facilitator treatment.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 21-24

Original ruling text

Policy and Research
109 SW 9th Street Phone: 785-368-8222
PO Box 3506 Fax: 785-296-1279
Topeka KS 66601-3506 www.ksrevenue.org
Mark A. Burghart, Secretary Laura Kelly, Governor

                                        NOTICE 21-24

                            MARKETPLACE FACILITATORS
                                   LODGING

                                      (JANUARY 7, 2022)

   During the 2021 Legislative Session Senate Bill 50 was passed and signed into law. New

Sections 1 through 4 of the Bill address marketplace facilitator platforms and requires the
collection and remittance of certain taxes by marketplace facilitators.

  As defined in the Bill, marketplace facilitators include entities that sell products or provide

lodging. This Notice addresses marketplace facilitators that provide lodging. For information
regarding marketplace facilitators that sell products, please see Notice 21-14.

                                          Generally

    Sections 1 through 4 of Senate Bill 50 are the first provisions in Kansas law to recognize

marketplace facilitator platforms. Under these provisions, entities that are determined to be
marketplace facilitators are subject to different requirements for the collection, remittance, and
reporting of sales and use tax than entities determined not to be marketplace facilitators. It is
important to note an entity may be both a marketplace facilitator facilitating sales for marketplace
sellers and a direct seller making sales on its own behalf. When acting as marketplace facilitator
an entity is subject to the provision of Sections 1 through 4 of Senate Bill 50. When acting as
direct seller (i.e., a retailer making direct sales to Kansas customers) an entity is not a marketplace
facilitator, and its direct sales to customers are subject to traditional sales tax law.

   The specific provisions set forth in Sections 1 through 4 of Senate Bill 50 supersede any

requirements regarding registering, collecting, remitting, and reporting established by the Kansas
sales tax act (see K.S.A. 79-3601, et seq). Otherwise, marketplace facilitators with Kansas nexus,
whether physical or economic, are subject to the provisions of K.S.A. 79-3601.

    For purposes of registration, the type of tax to be collected and remitted does not depend

upon the location of the marketplace facilitator. A marketplace facilitator located in Kansas will
register for, collect, and remit Kansas retailers' sales and transient guest tax. A marketplace
facilitator located outside of Kansas will also collect and remit Kansas retailers' sales and transient
guest tax. The location of a marketplace seller who is selling through the marketplace facilitator's
platform does not affect the type of tax to be collected and remitted.

                                        Definitions

Generally

  New Section 1 of the bill defines the terms "Department", "marketplace facilitator",

"marketplace seller" and "tax". The term "marketplace facilitator" includes entities that contract
with sellers to facilitate the sale of products or lodgings through a physical or electronic
marketplace operated, owned, or otherwise controlled by the entity and either directly or indirectly
collect the payment from the purchaser and transmit all or part of the payment to the marketplace
seller. The definition excludes platforms that exclusively provide advertising services or
principally provide payment processing services.

Statutory Language

 New Section 1(b) provides:

        (b)(1) "Marketplace facilitator" means a person, including any affiliate of the
 person, that:
        (A) Contracts or otherwise agrees with marketplace sellers to facilitate for
 consideration, regardless of whether deducted as fees from the transaction, the sale of
 the marketplace seller's products or rooms, lodgings or accommodations through a
 physical or electronic marketplace operated, owned or otherwise controlled by the
 person; and
        (B) either directly or indirectly through contracts, agreements or other
 arrangements with third parties, collects the payment from the purchaser and transmits
 all or part of the payment to the marketplace seller.
        (2) A "marketplace facilitator" includes a person that provides a platform
 through which unaffiliated third parties offer to rent to and collect consideration from
 occupants for rental, for a period of less than 29 consecutive days, of rooms, lodgings,
 accommodations, homes, apartments, cabins or residential dwelling units that are
 intended to be used as a room, lodging or sleeping accommodation by one person or
 by two or more persons maintaining a common household, to the exclusion of all
 others. A person is not a marketplace facilitator with respect to the sale or charges for
 rooms, lodgings or sleeping accommodations, if such rooms, lodgings or sleeping
 accommodations are provided by a hotel as described in K.S.A. 36-501, and
 amendments thereto, and the hotel provides the rooms, lodgings or sleeping
 accommodations for occupancy under a brand belonging to such person or the person
 facilitates sales or charges on behalf of the hotel.
        (3) A "marketplace facilitator" does not include:
        (A) A platform or forum that exclusively provides advertising services, including
 listing products for sale, so long as the advertising service platform or forum does not
 also engage directly or indirectly through one or more affiliated persons in the
 activities described in section 1(b)(1)(A) or (b)(1)(B), and amendments thereto;
        (B) a person whose principal activity with respect to marketplace sales is to
 provide payment processing services between two parties; or

       (C) a derivatives clearing organization, designated contract market, foreign
 board of trade or swap execution facility, registered with the commodity futures trading
 commission, and any clearing members, futures commission merchants or brokers
 when using the services of the commodity futures trading commission.
       (c) "Marketplace seller" means a seller that makes sales through any physical
 or electronic marketplace operated, owned or controlled by a marketplace facilitator.
       (d) "Tax" means:
       (1) The retailers' sales tax imposed under K.S.A. 79-3603, and amendments
 thereto;
       (2) the compensating use tax imposed under K.S.A. 79-3703, and amendments
 thereto; or
       (3) the transient guest tax imposed under K.S.A. 12-1693 or 12-1697, and
 amendments thereto, or any applicable city or county resolution or ordinance.

                  Application of Sections 1 through 4 of Senate Bill 50

   The provisions of Sections 1 through 4 of Senate Bill 50 only apply to marketplace

facilitators. In accordance with Section 1(b)(2), a person that, " provides a platform through which
unaffiliated third parties offer to rent to and collect consideration from occupants for rental, for a
period of less than 29 consecutive days, of rooms, lodgings, accommodations, homes, apartments,
cabins or residential dwelling units that are intended to be used as a room, lodging or sleeping
accommodation by one person or by two or more persons maintaining a common household, to
the exclusion of all others" is a marketplace facilitator.

  However, a person is not a marketplace facilitator, "with respect to the sale or charges for

rooms, lodgings or sleeping accommodations, if such rooms, lodgings or sleeping
accommodations are provided by a hotel as described in K.S.A. 36-501, and amendments thereto,
and the hotel provides the rooms, lodgings or sleeping accommodations for occupancy under a
brand belonging to such person or the person facilitates sales or charges on behalf of the hotel."
In other words, a person or entity that facilitates the sale, rental, or charges for hotel rooms is not
a marketplace facilitator.

                                        Hotel Rooms

   Because, by statutory definition found in New Section 1(b)(2), a person or entity that

facilitates the sale, rental, or charges for hotel rooms is not a marketplace facilitator that person or
entity will not collect, report, and remit sales or transient guest tax on behalf of the hotel (seller).
Instead, the hotel (seller) will collect, report, and remit sales and transient guest tax on the amount
it receives for the sale, rental, or charges it makes for the hotel room, as well as any additional
charges such as additional guest fee, charges for pets, additional bedding/linen, no-show charges,
etc. The hotel (seller) may receive payment for the hotel room and any additional charges from
the person or entity that facilitates the sale and/or from the person (purchaser) who occupies the
hotel room.

  Section 1(b)(2) of Senate Bill 50 specifically references K.S.A. 36-501, the Lodging

Inspection Act, which defines the term "hotel" as well as several related terms. Subsection (b) of
the statute provides:

        (b) As used in the lodging inspection act, the following words and phrases shall
 have the following meanings:
        (1) "Hotel" means every building or other structure that is kept, used, maintained,
 advertised or held out to the public as a place where sleeping accommodations are
 offered for pay primarily to transient guests and in which four or more rooms are used
 for the accommodation of such guests, regardless of whether such building or structure
 is designated as a cabin camp, tourist cabin, motel or other type of lodging unit.
        (2) "Rooming house" means every building or other structure that is kept, used,
 maintained, advertised or held out to the public to be a place where sleeping
 accommodations are furnished for pay to transient or permanent guests and in which
 eight or more guests may be accommodated, but that does not maintain common
 facilities for the serving or preparation of food for such guests.
        (3) "Boarding house" means every building or other structure that is kept,
 maintained, advertised or held out to the public to be a place where sleeping
 accommodations are furnished for pay to transient or permanent guests and in which
 eight or more guests may be accommodated, and that maintains common facilities for
 the serving or preparation of food for such guests. The term "boarding house" shall
 not include facilities licensed under K.S.A. 2015 Supp. 75-3307b(a)(5), prior to its
 repeal, or facilities licensed by the Kansas department for aging and disability services
 that are: (A) Facilities for developmentally disabled persons receiving assistance
 through the department and that receive or have received after June 30, 1967, any state
 or federal funds; or (B) facilities where developmentally disabled persons who require
 supervision or limited assistance with the taking of medication reside.
        (4) "Lodging establishment" means a hotel, rooming house, guest house or
 boarding house.

       .......

       (6) "Guest house" means every building or other structure that is kept, used,
 maintained, advertised or held out to the public to be a place where sleeping
 accommodations are furnished for pay to transient or permanent guests. A guest house
 shall accommodate no more than seven guests in no more than three rooms furnished
 with sleeping accommodations, regardless of whether common facilities for the serving
 or preparation of food are maintained.

                           "Rooms" Other Than Hotel Rooms

   In accordance with New Section 1(b)(2), a person or entity that facilitates the sale, rental, or

charges for rooms that are not hotel rooms is a marketplace facilitator. As a marketplace
facilitator, the person or entity that facilitates the sale, rental, or charges for "rooms, lodgings,
accommodations, homes, apartments, cabins or residential dwelling units that are intended to be

used as a room, lodging or sleeping accommodation" that are not hotel rooms must collect, report,
and remit sales and transient guest tax on the transaction between the owner of the property
(marketplace seller) and the guest renting the property (purchaser). This also includes any
additional charges made by the owner (marketplace seller) such as additional guest fee, charges
for pets, additional bedding/linen, no-show charges, etc.

                         De Minimis Threshold Measurements

Starting Date

  New Section 2 of the bill requires the collection and remittance of sales and compensating

use tax by marketplace facilitators beginning July 1, 2021. All calculations required under the
marketplace facilitator provisions start from this date and apply to all marketplace facilitators
whether they are located within or outside of Kansas.

De Minimis Threshold

 Only taxable sales are included in determining whether the de minimis threshold has been

met. Sales of property or services that are exempt from tax are not included.

  For purposes of determining whether a marketplace facilitator is above or below the de

minimis threshold established in New Section 2, the term "cumulative gross receipts" is used. It
is very important to note the term "cumulative gross receipts" is used only in the context of
determining whether a marketplace facilitator is above or below the de minimis threshold
established in New Section 2. The term is not used to determine whether, or to what extent, a
particular transaction is subject to Kansas sales or use tax. As used for sales and use tax purposes,
the term "gross receipts" is a term of art with a specific meaning and application.

   The collection and remittance requirements established by New Section 2 apply to

marketplace facilitators with calendar year sales sourced into Kansas in excess of $100,000 of
"cumulative gross receipts". For purposes of calculating the de minimis threshold for marketplace
facilitators, "cumulative gross receipts" includes both the marketplace facilitator's sales of its own
services and the sales it facilitates on its platform.

Calendar Year Sales Below De Minimis Threshold

  A marketplace facilitator that does not meet the $100,000 de minimis threshold is not

required to register, collect, and remit Kansas tax. However, for the benefit of the marketplace
sellers for whom they facilitate sales the marketplace facilitator may voluntarily do so. A
marketplace facilitator who chooses not to voluntarily collect the tax should consider advising the
marketplace sellers for whom they facilitate sales that they, the marketplace sellers, are responsible
for paying tax directly to the state of Kansas.

Calendar Year Sales Above De Minimis Threshold - Initial Year

 The statutory language of New Section 2(a)(1) makes it clear a marketplace facilitator whose

calendar year sales sourced into Kansas are in excess of $100,000 is not required to collect and
remit tax on the first $100,000 of sales made to customers in Kansas during the first year the
marketplace facilitator is required to collect and remit tax. This does not mean these sales are
exempt from tax, only that the marketplace facilitator is not required to collect the tax.

  Though not required to collect tax due to the first year de minimis requirement, for the benefit

of the marketplace sellers for whom they facilitate sales a marketplace facilitator may voluntarily
collect tax on the first $100,000 of sales during this first year. A marketplace facilitator who
chooses not to voluntarily collect the tax should consider advising the marketplace sellers for
whom they facilitate sales that they, the marketplace sellers, are responsible for paying tax directly
to the state of Kansas.

Calendar Year Sales Above De Minimis Threshold - Subsequent Year(s)

  Once a marketplace facilitator has made sales to Kansas customers equal to or in excess of

the $100,000 threshold they must collect and remit sales and transient guest tax on any additional
sales to Kansas customers. The marketplace facilitator must collect and remit sales and transient
guest tax on all sales made to Kansas customers in the following year. By way of example, if a
marketplace facilitator has sales to Kansas customers in excess of $100,000 in Year One, they
must collect and remit sales and transient guest tax on all sales to Kansas customers in excess of
the threshold in Year One, and on all sales made to Kansas customers during Year Two, regardless
of the amount of those sales.

Calendar Year Sales Fall Below De Minimis Threshold - Subsequent Year(s)

  The requirement that a marketplace facilitator collect and remit Kansas tax ends if the amount

of sales to Kansas customers falls below $100,000 in the preceding year. To continue the example,
if a marketplace facilitator has sales to Kansas customers in excess of $100,000 in Year Three, the
marketplace facilitator must collect and remit sales and transient guest tax on all sales to Kansas
customers during Year Four. But, if all sales made to Kansas customers during Year Four total
less than $100,000, there is no requirement to collect and remit tax for sales made in Year Five, or
any subsequent year, until sales made in a given year exceed $100,000. If that occurs, collecting
and remitting tax would be required for all sales to Kansas customers in excess of $100,000 during
that year, and for all sales to Kansas customers during the following year.

Statutory Language

 New Section 2(a) provides:

      (a)(1) Any marketplace facilitator selling or facilitating the sale of property or
 services subject to tax in this state shall be required to collect and remit such taxes and
 follow all applicable procedures and requirements provided by law for the collection
 and remittance of such taxes. A marketplace facilitator shall only be required to collect
 and remit such taxes if the following criteria are satisfied during the current or
 immediately preceding calendar year:
      (A) The marketplace facilitator makes sales of property or services otherwise
 subject to tax in the state in an amount exceeding $100,000; or
      (B) if a marketplace facilitator makes or facilitates the sale of property or services
 subject to tax in the state, on its own behalf or on behalf of one or more marketplace
 sellers, for delivery into this state in an amount exceeding $100,000.
      (2) For any marketplace facilitator who satisfies the provisions of this subsection
 for sales in the current calendar year for the first time, such marketplace facilitator
 shall be required to collect and remit the tax on any sales in excess of $100,000 of
 cumulative gross receipts from sales in the current calendar year for delivery into this
 state.

            Departmental Waiver of Obligation to Collect and Remit Tax

Generally

  New Section 2 of the bill authorizes the Department of Revenue to waive the obligation of a

marketplace facilitator to collect and remit taxes upon a showing by the marketplace facilitator
that substantially all of its marketplace sellers are already collecting and remitting all applicable
taxes. For purposes of obtaining a waiver from the Department, the phrase "substantially all"
means 95% or more. The bill also allows marketplace facilitators to contract with marketplace
sellers that have at least $1.0 billion of annual gross sales in the United States to require the
marketplace seller to collect and remit all applicable taxes and fees.

Statutory Language

 New Section 2 (b) and (c) provide:

       (b) The department may grant a waiver from the requirements of this section if a
 marketplace facilitator demonstrates, to the satisfaction of the department, that
 substantially all of its marketplace sellers already are collecting and remitting taxes to
 the department. If such waiver is granted, the taxes levied shall be collectible from the
 marketplace seller. The department shall promulgate rules and regulations that
 establish:
       (1) The criteria for obtaining a waiver pursuant to this section;
       (2) the process and procedure for a marketplace facilitator to apply for a waiver;
 and
       (3) the process for providing notice to an affected marketplace facilitator and
 marketplace seller of a waiver obtained pursuant to this subsection.

       (c) Nothing in this section shall prohibit the marketplace facilitator and the
 marketplace seller from contractually agreeing to have the marketplace seller collect
 and remit all applicable taxes and fees if the marketplace seller:
       (1) Has annual gross sales in the United States over $1,000,000,000, including
 the gross sales of any related entities, and, in the case of franchised entities, including
 the combined sales of all franchisees of a single franchisor;
       (2) provides evidence to the marketplace facilitator that the marketplace seller is
 registered pursuant to K.S.A. 79-3608, and amendments thereto; and
       (3) notifies the department in the manner prescribed by the department that the
 marketplace seller will collect and remit all applicable taxes and fees on sales through
 the marketplace and is liable for failure to collect or remit applicable taxes and fees
 on such sales.

              Obligation to Collect and Remit Tax in Absence of Waiver

Generally

  A marketplace facilitator is responsible for the collection and remittance of tax regardless of

whether the marketplace seller for whom a sale is facilitated has, or would have been required to
be, registered to collect tax if the sale had not been facilitated by the marketplace facilitator. In
this role, the marketplace facilitator has the same rights and duties as a seller. It is also subject to
audit by the Department, as any seller would be.

Statutory Language

 New Section 3 provides:

        (a) Except as provided in section 2(b) or (c), and amendments thereto, a
 marketplace facilitator doing business in this state under section 2, and amendments
 thereto, shall collect and remit the taxes on all taxable sales made by the marketplace
 facilitator or facilitated for marketplace sellers to customers in this state, regardless of
 whether the marketplace seller for whom sales are facilitated has registered to collect
 taxes or would have been required to collect taxes if the sale had not been facilitated
 by the marketplace facilitator. A marketplace facilitator has the same rights and duties
 as a seller to collect and remit all such taxes. Marketplace facilitators and marketplace
 sellers may enter into agreements with each other regarding fulfillment of the
 requirements of this section, but the marketplace facilitator remains the party that is
 liable to the state for fulfilling such requirements.
        (b) A marketplace facilitator shall either:
        (1) Report the tax imposed pursuant to subsection (a) separately from any taxes
 collected on taxable sales made directly by the marketplace facilitator, or affiliates of
 the marketplace facilitator, to customers in this state using a separate form to be
 published by the department; or

        (2) report the tax imposed pursuant to subsection (a) combined with any taxes
 collected on taxable sales made directly by the marketplace facilitator, or affiliates of
 the marketplace facilitator.
        (c) No class action may be brought against a marketplace facilitator in any court
 of this state on behalf of customers arising from or in any way related to an
 overpayment of tax collected on sales facilitated by the marketplace facilitator,
 regardless of whether that claim is characterized as a tax refund claim. Nothing in this
 subsection affects a customer's right to seek a refund as provided under K.S.A. 79-
 3650, and amendments thereto.
        (d) Nothing in this section affects the obligation of any consumer to remit the tax
 for any taxable transaction for which a marketplace facilitator or seller does not collect
 and remit the tax.
        (e) The department shall solely audit the marketplace facilitator for sales made
 by marketplace sellers but facilitated by the marketplace facilitator, except with respect
 to transactions that are subject to section 2(b) or (c), and amendments thereto. The
 department shall not audit or otherwise assess tax against marketplace sellers for sales
 facilitated by a marketplace facilitator except to the extent that the marketplace
 facilitator seeks relief under subsection (f) or with respect to transactions that are
 subject to section 2(b) or (c), and amendments thereto.
        (f) A marketplace facilitator shall be relieved of liability under this section for
 failure to collect and remit the correct amount of tax to the extent that the error was
 due to incorrect or insufficient information on the nature of the product or service given
 to the marketplace facilitator by the marketplace seller, if the marketplace facilitator
 can demonstrate a reasonable effort to obtain correct and sufficient information from
 the marketplace seller. This subsection shall not apply if the marketplace facilitator
 and the marketplace seller are under common ownership and control.
        (g) The department may waive penalties and interest if a marketplace facilitator
 seeks liability relief and the department determines that reasonable cause exists.
        (h) A marketplace facilitator shall be relieved of liability under this section if it
 can prove, to the satisfaction of the department, that the tax levied on a sale facilitated
 by the marketplace facilitator was paid to the department by the marketplace seller.

                                       Registration

   A marketplace facilitator is required to begin collecting and remitting tax on sales in excess

of the $100,000 threshold as soon as they cross the threshold. In other words, a marketplace
facilitator is required to register, collect, and remit tax on the next transaction after meeting or
exceeding the threshold.

  Because each marketplace facilitator will meet or exceed the threshold at a different time,

each marketplace facilitator will establish its own date for when registration, collection, and
remittance requirements begin. It is important to note that, regardless of when registration and
remittance of tax actually occur, responsibility for collecting tax begins with the next transaction
after meeting or exceeding the threshold. By way of example, if a marketplace facilitator's first
transaction is $105,000, responsibility for collecting tax does not begin until the next transaction,

regardless of the amount of that transaction. If a marketplace facilitator has multiple transactions
that total $99,950 and then has a $100 transaction, responsibility for collecting tax does not begin
until the next transaction. And if a marketplace facilitator has multiple transactions that total
$99,950 and then has a $100,000 transaction, responsibility for collecting tax still does not begin
until the next transaction.

  A marketplace facilitator should register with the Department not later than thirty (30) days

after their sales for the calendar year exceed $100,000. At the time of registration, the type of
registration (i.e. sales tax or retailers' compensating use) will be determined. For purposes of
registration, the type of tax to be collected and remitted depends upon the location of the
marketplace facilitator. A marketplace facilitator located in Kansas (i.e. physical nexus) will
register for, collect, and remit Kansas retailers' sales tax. A marketplace facilitator located outside
of Kansas (i.e. economic nexus) will collect and remit Kansas retailers' compensating use tax.
Both will register for, collect, and remit Kansas transient guest tax.

  A marketplace facilitator that makes both direct and facilitated sales may choose to report

sales separately or on one return. If sales will be reported separately it will be necessary for the
marketplace facilitator to have two accounts; one for its sales and one for facilitated sales. In
addition, each marketplace facilitator's reporting and remittance schedule will be determined,
based on the total amount of tax collected. More information regarding the registration process
and filing frequency is available in Publication KS-1510 Kansas Sales & Compensating Use Tax,
which is available through the Department's website at: www.ksrevenue.org.

  As an alternative to registering directly with the Department, marketplace facilitators may

register through the Streamlined Sales Tax Registration System. Additional information is
available through their website at: https://www.streamlinedsalestax.org/for-businesses/sales-tax-
registration-sstrs.

                                  Additional Information

 For additional information regarding lodging and related services, see the Department's

Publication KS-1540 Business Taxes for Hotels, Motels and Restaurants, which is available
through the Department's website at www.ksrevenue.org.

 In addition to the new provisions related to marketplace facilitators, Section 14 of Senate Bill

50 also amends K.S.A. 79-3702 to repeal the "click-through" nexus provisions for affiliated
persons related to sales and use tax collections. Section 14 also amends the definition of "retailer
doing business in this state" found in K.S.A 79-3702 to establish a de minimis threshold of
$100,000 in gross sales to customers in Kansas for non-Kansas retailers. For additional
information in this regard, see Notice 21-23 Click-Through Nexus Eliminated and Notice 21-17
Remote Sellers, both of which are available through the Department's website at:
www.ksrevenue.org.

                               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
                           Scott Office Building, 1st Floor
                                  120 SE 10th Ave
                                   P. O. Box 3506
                              Topeka, KS 66601-3506
                                Phone: 785-368-8222
                                 Fax: 785-291-3614