When you operate a business in Kansas where you resell goods to others, you will want to get a Kansas resale certificate. This certificate is separate from your seller’s permit (sales and use tax certificate). Keep reading to find out what a resale certificate is and how to get a resale certificate in Kansas.
What Is a Kansas Resale Certificate?
A Kansas resale certificate allows you to purchase goods for your inventory that you intend to resell without paying sales taxes for those items. You may know a resale certificate by other names, such as:
- Kansas Wholesale Certificate
- Kansas Reseller’s Certificate
- Sales Tax Exemption Permit
- Kansas Resale Permit
- Kansas Wholesale License
- Kansas Reseller Number License
- Kansas Reseller’s Permit
Who Needs a Kansas Resale Certificate?
Any business that maintains an inventory of products they sell to their customers should have a Kansas reseller’s certificate. For example, you purchase sporting goods to resell in your sporting goods store. When you purchase the goods from your vendors, you do not have to pay sales taxes on the items purchased.
When one of your customers purchases sporting goods from your store, you collect the sales taxes from them. Then you submit all the sales taxes you have collected to the Kansas Department of Revenue at set intervals, such as monthly or quarterly. The sales taxes you collect are calculated on the price you charge for the items, not the price you paid to your vendors.
What Happens if You Do Not Have a Kansas Resale Certificate?
Suppose you do not have a Kansas reseller’s certificate? Then you would have to pay sales taxes on inventory items you purchased from your vendors. However, because you would also collect sales taxes from your customers, you would essentially be paying taxes twice on resale products.
As such, you could deduct the sales taxes you paid to your vendors when you submit your sales tax payments to the Kansas Department of Revenue—although you would need to keep meticulous records and receipts to support the sales tax payment deductions.
Do Vendors Have to Accept My Resale Certificate In Kansas?
While most vendors and suppliers will gladly deduct sales taxes from your inventory purchases, they are not required to accept it if they so wish. In cases where you pay sales taxes to your suppliers and vendors, the process is similar to not having a resale certificate—you are allowed to deduct sales taxes paid from your sales tax payments.
Can I Use My Kansas Reseller’s Certificate for Out-of-State Purchases?
The majority of states will honor your reseller’s certificate when you purchase inventory items from vendors and suppliers outside of Kansas. Currently, there are ten states that will not honor another state’s wholesale certificates.
For those states, you would need to apply and obtain a resale certificate in that state. For example, Illinois is one such state that requires you to obtain an Illinois wholesale permit to avoid paying sales taxes on items you purchase from vendors and suppliers in Illinois.
Do Service Businesses Need a Resale Certificate in Kansas?
It would depend on the type of service business and whether you sold items to your customers. For instance, if you operated a car wash business, you may still have air fresheners, car accessories, and other such items you resell to your customers. So, in this example, you would want to obtain a resale certificate to avoid paying sales taxes on the items you resold to your customers.
How FastFilings Can Help You Get a Resale Certificate in Kansas
FastFilings makes it simple and easy to obtain a Kansas resale certificate in just a few simple steps:
- Step 1: Fill out our secure online Kansas resale certificate form
- Step 2: Upload any required documentation.
- Step 3: Submit payment.
- Step 4: We file your resale certificate application on the correct application form.
- Step 5: Receive your wholesale certificate quickly within a few business days.
- Step 6: Start using your reseller’s permit to be tax exempt on inventory purchases.
In the event we require additional information to complete your application, we will contact you directly. We can also assist you in obtaining your Kansas seller’s permit, as well as any out-of-state wholesale licenses you require.
Apply for your Kansas reseller’s certificate at FastFilings today! Should you have further questions or require additional assistance, please feel free to reach us by filling out our online contact form.