What About Sales Tax?


Sales tax is a tax on retail sales paid by the ultimate consumer. If you sell things at retail to consumers, the state, city and county have entrusted you to collect this tax and send it to the state. It does not cost you anything but the time and bookkeeping required to collect and file it.


Kansas and probably most states require that the sales tax be a separate item on the invoice or sales receipt so that the consumer will know how much tax they are paying.


If you sell taxable items at retail you will need a state sales tax number and set up an account with your state’s department of revenue. What is taxable and the tax rates vary with each jurisdiction, sometimes right down to the street level, so make sure you know the rules where your business is located.


Generally there is sales tax on each item only once. That means if you collect sales tax on something when you sell it, you are exempt from paying sales tax when you buy it for resale.


Additionally, some organizations are exempt from paying sales tax on most or all items. Sales tax exempt organizations include schools, hospitals and churches among others. If you sell at retail, you are responsible for keeping track and having documentation on which ones of your customers are tax exempt.


You then pay the sales tax collected directly to the state either monthly or quarterly, depending upon the amount collected.