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US Kansas imposes sales tax threshold on remote sellers July 2021

The US state of Kansas has become one of the last states to impose a threshold (safe harbour) on sales tax collection obligations on remote or foreign sellers. At the same time, facilitating marketplaces will also become liable to collecting taxes on behalf of their third-party merchants once over the threshold.

Kansas follows South Dakota vs Wayfair economic nexus rule

40 other states exercise right to impose tax requirements on out-of-state merchants following the 2018 South Dakota Supreme Court ruling which introduced the new economic nexus test. This rules that states may require remote merchants to collect and remit state-level sales tax even if the have no stocks, staff or facilities in the state – the physical nexus tax test.

Kansas is imposing the safe harbour from 1 July 2021. It was the last remote sales tax state in the US not to have a registration threshold (see below). There will be a $100,000 annual sales registration threshold.  Once over this, sellers or marketplaces must register with the Kansas Department of Revenue.

US Sales Tax rates and selling thresholds

State State sales tax rate Remote seller annual thresholds Digital services taxable?
$ threshold Transactions threshold
Alabama 4.0% 1 Oct 2018 $250,000 Yes
Alaska 0% - n/a No state-wide tax
Arizona 5.6% 1 Oct 2019 $100,000 - Yes
Arkansas 6.5% 1 July 2019 $100,000 200 transactions Yes
California 6.0% 1 April 2019 $500,000 - No
Colorado 2.9% 1 Dec 2018 $100,000 - Yes
Connecticut 6.35% 1 Dec 2018 $100,000 200 transactions Yes
Delaware 0.0% - n/a No state sales tax
Florida 6.0% 1 July 2021 $100,000 - No Communications Tax. E-books exempt
Georgia 4.0% 1 Jan 2019 $100,000 200 transactions No
Hawaii 4.0% 1 July 2018 $100,000 200 transactions Yes General Excise Tax
Idaho 6.0% 1 June 2019 $100,000 Yes Software exempt
Illinois 6.25% 1 Oct 2018 $100,000 200 transactions No
Indiana 7.0% 1 Oct 2018 $100,000 200 transactions Yes
Iowa 6.0% 1 Jan 2019 $100,000 - Yes
Kansas 6.5% 1 July 2021 $100,000 - No
Kentucky 6.0% 1 Oct 2018 $100,000 200 transactions Yes
Louisiana 4.45% 1 July 2020 $100,000 200 transactions Yes
Maine 5.5% 1 July 2018 $100,000 - (since 2022) Yes
Maryland 6.0% 1 Oct 2018 $100,000 200 transactions Yes
Massachusetts 5.6% 1 Oct 2018 $100,000 No
Michigan 6.0% 30 Sep 2018 $100,000 200 transactions No
Minnesota 6.875% 1 Oct 2018 $100,000 200 transactions Yes
Mississippi 7.0% 1 Sep 2018 $250,000 - Yes
Missouri 4.225% 1 Jan 2023 $100,000 - No
Montana 0.0% - n/a No state sales tax
Nebraska 5.5% 1 April 2019 $100,000 200 transactions Yes
Nevada 4.6% 1 Oct 2018 $100,000 200 transactions No
New Hampshire 0.0% - n/a
New Jersey 6.625% 1 Nov 2018 $100,000 200 transactions Yes
New Mexico 5.0% 1 July 2019 $100,000 - Yes
New York 4.0% 21 July 2018 $500,000 100 transactions No
North Carolina 4.75% 1 Nov 2018 $100,000 200 transactions Yes
North Dakota 5.0% 1 Oct 2018 $100,000 - No
Ohio 5.75% 1 Aug 2019 $100,000 200 transactions Yes
Oklahoma 4.5% 1 Nov 2019 $100,000 - No
Oregon 0.0% - n/a No state sales tax
Pennsylvania 6.0% 1 July 2019 $100,000 Yes
Puerto Rico 10.5% 1 Jan 2021 $100,000 200 transactions Yes
Rhode Island 7.0% 1 July 2019 $100,000 200 transactions Yes
South Carolina 6.0% 1 Nov 2018 $100,000 - No
South Dakota 4.5% 1 Nov 2018 $100,000 200 transactions Yes
Tennessee 7.0% 1 July 2019 $100,000 - Yes
Texas 6.25% 1 Oct 2019 $500,000 - Yes Only if physcial equivilaent is taxable (e.g. books)
Utah 4.7% 1 Jan 2019 $100,000 200 transactions Yes
Vermont 6.0% 1 July 2018 $100,000 200 transactions Yes
Virginia 4.3% 1 July 2019 $100,000 200 transactions No
Washington 6.5% 1 Oct 2018 $100,000 - Yes
Washington, DC 6.0% 1 Jan 2019 $100,000 200 transactions Yes
West Virginia 6.0% 1 Jan 2019 $100,000 200 transactions Yes Streaming services only
Wisconsin 5.0% 1 Oct 2018 $100,000 - (since 2021) Yes
Wyoming 4.0% 1 Feb 2019 $100,000 200 transactions Yes

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