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Sales Tax and Compensating Use Tax Welcome to the Kansas business community! This publication has been prepared by ODOR (Kansas Department of Revenue) to assist you in understanding how the Kansas
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What is sales tax and compensating?
Sales tax is a tax levied on the sale of goods and services. Compensating tax is a tax imposed on goods purchased from out-of-state sellers who have not collected sales tax.
Who is required to file sales tax and compensating?
Businesses and individuals engaged in selling goods or services are usually required to file sales tax returns and pay the sales tax. Individuals who purchase goods from out-of-state sellers may also be required to file compensating tax returns.
How to fill out sales tax and compensating?
To fill out sales tax returns, businesses need to report their taxable sales and calculate the amount of sales tax owed. For compensating tax, individuals need to report their out-of-state purchases and calculate the compensating tax due.
What is the purpose of sales tax and compensating?
The purpose of sales tax is to generate revenue for the government and fund public services. Compensating tax ensures that out-of-state purchases are subject to tax and create a level playing field for in-state sellers.
What information must be reported on sales tax and compensating?
On sales tax returns, businesses must report their taxable sales, tax collected, and any exemptions or deductions. On compensating tax returns, individuals must report their out-of-state purchases and calculate the compensating tax due.
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