Tax on out-of-state internet sales coming in Kansas

Capitol Bureau

TOPEKA, Kan. (KSNT) – Kansas businesses may not have to compete against online retailers much longer.

People in Kansas have to pay state sales tax at six and a half percent, but not all out of state internet purchases have had that charge.

“The main street retailer in Kansas being at such a competitive disadvantage and when you figure state and local rates you could have a ten percent differential, and that makes a difference,” Department of Revenue Secretary Mark Burghart.

The state will require out-of-state internet purchases to be taxed as well. Now supporters say in-state and out-of-state businesses will be on the same playing field.

“Companies are systematically soliciting customers from Kansas and to the disadvantage of in-state companies and to the state of Kansas because revenue is not being properly collected,” Burghart said.

Burghart said this could add $20 million to $40 million in state revenue. This comes after last year’s Wayfair v. South Dakota Supreme Court case allowing state taxes on internet sales.

That case protected small businesses that sell less than $100,000 to state buyers.

“This is tiny, tiny retailers out-of-state that sends a really bad message about Kansans not treating small business fairly,” said Dave Trabert, President for Kansas Policy Institute.

This plan applies to all businesses, and some believe this will head to the courts.

“It’s unfair, it’s not complying with the law and it’s only going to cost the state a lot of money to defend this action,” said Trabert.

But Burghart believes this route is the best way to go.

“We are comfortable that we are enforcing the law that’s on the books and that’s what our role is and we’re very comfortable that we don’t have any authority to implement an administrative de minimis amount,” Burghart said.

Companies must register to sell products to Kansans by October 1.

The legislature tried to address the issue on two separate bills this year, but Governor Kelly vetoed them as they were attached to other tax plans.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Trending Stories