Instructions For Form St-16 - Kansas Retailers' Sales Tax Return

Mark Parkinson, Governor

Joan Wagnon, Secretary

________________________________________________________________

Notice 10-03

Instructions for Reporting Sales Receipts

on Sales Tax Returns Filed for July 2010

June 15, 2010

I. State Sales Tax Rate Increase. The Kansas state sales and use tax rate will increase

from 5.3% to 6.3% beginning July 1, 2010. A number of local sales and use tax rates also

change on July 1, 2010. Unless the context indicates otherwise, the "July sales tax return"

discussed here is the return for the July 2010 reporting period that is due on or before

August 25, 2010. When this Notice states that the 5.3% or 6.3% state rate is imposed or

was invoiced to a customer, it means the combined state and local sales tax rate that is

imposed or invoiced equals the sum of the 5.3% or 6.3% state rate plus all applicable

local sales tax rates.

II. Transitioning to the 6.3% State Sales Tax Rate. Notice 10-02, as revised on June 3,

2010, contains transition rules that explain how Kansas sales tax applies to customer

invoices for sales and service transactions that started before, and are completed on and

after July 1, 2010. Retailers that follow these rules and correctly program the state and

local rate changes into their accounting software can rely on the gross sales and other

amounts generated by their software when they fill out their July 2010 return. This

assumes that the retailer's accounting software calculated the correct gross sales and other

amounts, such as sales for resale and returned goods, for earlier returns. Once these

amounts are entered on a return, most retailers can complete it in the same way they

completed earlier returns without making any adjustments.

However, some businesses may need to claim additional deductions on their July

sales tax return, and possibly on later returns, to avoid paying more sales tax to Kansas

than they collected from customers. This Notice explains why these retailers need to

claim the additional deductions and how the deductions are calculated and claimed on a

return.

III. Additional Deductions that Some Businesses Can Claim. Businesses that can

claim an additional deduction are ones that report sales receipts on one return from some

sales correctly invoiced to customers at the 5.3% state rate and other sales correctly

invoiced at the 6.3% state rate. These businesses can be retailers that use cash-basis

accounting and providers of taxable services that invoice customers for taxable services

that cover a billing period starting before and ending on or after July 1, 2010.

For charges invoiced for taxable services that will be provided in the future, such as a

charge for a satellite radio subscription or a charge for future cell phone services, the

5.3% state rate applies to an invoice issued before July 1, 2010 for a future billing period

that starts before July 1, 2010. The 6.3% state rate applies to an invoice for a future

billing period that starts on or after July 1, 2010, regardless of when the invoice is issued.

Instructions For Form St-16 - Kansas Retailers' Sales Tax Return - 2005 Page 3