Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax Page 37
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42The tax is instead of an ad valorem (property) tax
required on certain taxable non-wage payments by
payors, on management and consulting fees paid to
that might have been imposed on the intangibles
nonresidents, and on the Kansas taxable income of the
(deposits) held by financial institutions. The current tax
nonresident owners of partnerships, S corporations
rate is 2.25% of net income, plus a surtax on net income
and limited liability companies. In addition to being
in excess of $25,000 of 2.125% for banks, and 2.25%
registered with KDOR, employers must register with the
for savings and loans and trust companies.
Kansas Department of Labor and the Internal Revenue
Service (IRS).
Tire Excise Tax. This tax is collected on the
sale of new vehicle tires, including the new
Because of differences in the computation of the
tires sold on a new vehicle for the first time.
federal and Kansas income taxes, it is not uncommon
All tire retailers, as well as all new car, truck, farm
for a taxpayer to receive a federal income tax refund
implement and equipment dealers must collect this tax.
while owing taxes to Kansas or vice versa. For this
The tire excise tax is in addition to and is separate from
reason, KDOR has made available a Form K-4 and is
the sales tax. The tax rate is 25 cents per tire. Used,
encouraging employers to have employees complete it
recapped, and retreaded tires are not taxed.
in addition to the federal W-4 form.
The revenue generated by this tax is used to clean
For more information about Kansas withholding tax,
up waste tire sites and to provide for the continued
including the tables to compute withholding, obtain a
environmentally safe disposal and use of waste tires.
copy of Pub. KW-100, Kansas Withholding Tax Guide.
For additional information on this tax type, obtain Pub.
This publication and the Kansas Form K-4 are available
KS-1530, Kansas Tire Excise Tax, from our web site.
on our web site.
Transient Guest Tax. This tax is collected when
rooms, lodgings, or other sleeping accommodations are
KANSAS EXEMPTION
rented to guests. Hotels, motels, bed and breakfast
establishments, and tourist courts must register for the
CERTIFICATES
transient guest tax if they have more than two
bedrooms furnished to accommodate guests.
Transient guest tax is collected in addition to the sales
USING EXEMPTION CERTIFICATES
tax due on the room rental, and applies only when the
room is rented for 28 consecutive days or less. However,
Exemption certificates are an important part of sales
like a local sales tax, transient guest tax is a local option
and use tax record keeping, but are often found lacking
and is not imposed in all areas of Kansas. Tax rates
by our auditors. Use the information in this section to
currently range from 2% to 7%. For additional information
help you properly complete and accept exemption
on this tax type obtain a copy of our Pub. KS-1540,
certificates. We recommend that retailers also obtain a
Kansas Business Taxes for Hotels, Motels and
copy of our Pub. KS-1520, Kansas Exemption
Certificates. This publication contains all the exemption
Restaurants, from our web site.
certificates currently in use and detailed information
about each exemption. It is available on our web site.
Vehicle Rental Excise Tax. When a vehicle is
leased or rented for 28 consecutive days or less, a
Before accepting any certificate, carefully read
vehicle rental excise tax of 3.5% is charged. This tax is
the exemption statement and the accompanying
in addition to the sales tax due on these transactions.
explanation and instructions. Most certificates contain
Car rental agencies, vehicle dealers, repair shops, and
a restatement of the Kansas law (K.S.A. – Kansas
others who rent cars must register to collect this tax.
Statutes Annotated), or regulation (K.A.R. – Kansas
Administrative Regulations) authorizing the exemption.
Water Protection Fee. This fee, at the rate of $.03
If your customer or the purchase does not fit the
per 1,000 gallons of water, is collected on the retail sales
definition in the certificate or the exempt examples given,
of water delivered through mains, lines or pipes by public
the sale is probably not exempt.
water suppliers and on water appropriated for industrial
and stock watering uses. An additional fee for the
The new Kansas Exempt Entity Identification Number
inspection and regulation of public water supplies of
and Certificate (see page 7) are designed to help
$.002 per 1,000 gallons of water sold at retail is remitted
retailers and exempt customers complete the exemption
with the Water Protection Fee. Public water suppliers
certificate process, not to replace it. See NOTICE
need to register with KDOR and the Kansas Department
04-10, on our web site.
of Health and Environment.
Completing an Exemption Certificate
Withholding Tax. This tax is deducted by employers
from wages paid to employees to prepay the employee’s
Follow these three rules when completing any
income tax liability. Kansas withholding tax is also
exemption certificate.
37
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