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KS Notice 14-17 Kansas Compensating Use Tax 2015-01-01

How did Kansas change the vendor discount rate for Missouri and Nebraska retailers?

Short answer: Kansas Notice 14-17 reduces the reciprocal 'vendor discount' Kansas allows out-of-state retailers who collect and remit the Kansas Retailers' Compensating Use Tax. Under agreements in effect since 1968 pursuant to K.S.A. 79-3707(c), Missouri and Nebraska retailers had each received a 3% discount on Kansas use tax timely remitted, mirroring each state's own discount. Effective for returns (Form CT-9U) filed on or after January 1, 2015, the Kansas vendor discount rate for Missouri retailers is reduced to 2.0% of the tax timely remitted, and for Nebraska retailers to 2.5% of the first $3,000 of use tax timely remitted each month -- matching Missouri's 2% (Section 144.710, Missouri Revised Statutes) and Nebraska's 2.5%-of-first-$3,000 (Nebraska Revised Statutes 77-2703(2)(d)) rates. The Oklahoma rate (1%, capped at $2,500 per month) is unchanged. The notice bears no printed issue date; the only date it states is the January 1, 2015 effective date.

Apply this to your situation

This page answers the general question as of 2015. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2015
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Notice: public guidance the Department issues to explain Kansas tax law, most often a newly enacted statute. It states the Department's general interpretation and administration of the law; it does not have the force of law and is not a private ruling issued to any one taxpayer. It reflects the statutes, regulations, and rates in effect on its issue date and may since have been amended or superseded by a later notice or law change, so confirm it is still current before relying on it. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Kansas Notice 14-17 reduces the vendor discount Kansas gives out-of-state retailers who collect and remit the Kansas Retailers' Compensating Use Tax.

Background. Kansas allows a reciprocal discount to retailers in states that allow their own retailers a discount, under agreements in effect since 1968 pursuant to K.S.A. 79-3707(c). Missouri retailers (Missouri gives a 2% discount under Section 144.710, Missouri Revised Statutes) and Nebraska retailers (Nebraska gives 2.5% of the first $3,000 under Nebraska Revised Statutes 77-2703(2)(d)) had each been receiving a 3% Kansas discount on use tax timely remitted.

The change. Effective for returns (Form CT-9U) filed on or after January 1, 2015:

  • Missouri retailers: the Kansas vendor discount rate is reduced to 2.0% of the Kansas Retailers' Compensating Use Tax timely remitted.
  • Nebraska retailers: the rate is reduced to 2.5% of the first $3,000 of Kansas Retailers' Compensating Use Tax timely remitted each month.

Unchanged. The Kansas vendor discount for Oklahoma retailers -- 1% of Kansas tax timely remitted, capped at $2,500 per month -- remains in effect.

Date note. The notice bears no printed issue date; the only date it states is the January 1, 2015 effective date, which is used as the issued date here.

What this means for you

Missouri and Nebraska retailers collecting Kansas use tax

  • Your Kansas vendor discount drops from 3% to 2.0% (Missouri) or to 2.5% of the first $3,000 per month (Nebraska) on CT-9U returns filed on or after January 1, 2015.

Oklahoma retailers

  • No change -- 1% of Kansas tax timely remitted, capped at $2,500 per month.

Common questions

What is the new Missouri rate? 2.0% of the Kansas use tax timely remitted.

What is the new Nebraska rate? 2.5% of the first $3,000 of Kansas use tax timely remitted each month.

When does the reduction take effect? For Form CT-9U returns filed on or after January 1, 2015.

Did Oklahoma's rate change? No -- it remains 1%, capped at $2,500 per month.

Citations and references

  • K.S.A. 79-3707(c) -- the reciprocal-discount authority under which Kansas mirrors another state's vendor discount.
  • Section 144.710, Missouri Revised Statutes -- Missouri's 2% use-tax discount, referenced for the reciprocal rate.
  • Nebraska Revised Statutes 77-2703(2)(d) -- Nebraska's 2.5%-of-first-$3,000 discount, referenced for the reciprocal rate.

Source

Original ruling text

Kansas Department of Revenue
Office of Policy & Research

                                            NOTICE 14-17

           Kansas Vendor Discount Rates Reduced for Missouri and Nebraska Retailers

Currently, pursuant to Section 144.710 of the Missouri Revised Statutes, retailers designated or required to

collect the Missouri use tax are entitled to take a discount equal to 2% of use tax timely remitted as
reimbursement for the cost of collecting the tax.

Currently, Nebraska Revised Statutes Section 77-2703(2)(d) provides to retailers designated or required to

collect the Nebraska use tax a discount equal to 2.5% of the first $3,000 of use tax timely remitted each month
as reimbursement for the cost of collecting the tax.

By Agreement between Missouri and Kansas in effect since 1968 pursuant to K.S.A. 79-3707(c) for

reciprocal rates, the discount rate extended to Missouri retailers who collect and remit the Kansas Retailers'
Compensating Use Tax has been 3 percent (3%) of the tax remitted when the remittance is timely.

By Agreement between Nebraska and Kansas in effect since 1968 pursuant to K.S.A. 79-3707(c) for

reciprocal rates, the discount rate extended to Nebraska retailers who collect and remit the Kansas Retailers'
Compensating Use Tax has been 3 percent (3%) of the tax remitted when the remittance is timely.

Effective for returns (Form CT-9U) filed on or after January 1, 2015 by Missouri retailers, the Kansas
"vendor discount rate" is reduced to two percent (2.0%) of the Kansas Retailers' Compensating Use Tax timely
remitted.

Effective for returns (Form CT-9U) filed on or after January 1, 2015 by Nebraska retailers, the Kansas
"vendor discount rate" is reduced to two and one-half percent (2.5%) of the first $3,000 of Kansas Retailers'
Compensating Use Tax timely remitted each month.

The Kansas "vendor discount rate" for retailers in Oklahoma collecting and remitting the Kansas Retailers'

Compensating Use Tax (1% of Kansas tax timely remitted with a maximum cap of $2500 per month) remains in
effect.

                                         Taxpayer Assistance

Additional copies of this notice, forms or publications are available from our web site, www.ksrevenue.org.

If you have questions about income tax, please contact:

                                     Taxpayer Assistance Center
                                    Kansas Department of Revenue
                                    915 SW Harrison St., 1st Floor
                                      Topeka, KS 66612-1588
                                        Phone: 785-368-8222
                                         Fax: 785-291-3614

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