Kansas use tax is a 6.5% state tax, plus any local rates, that you owe on tangible personal property you buy from an out-of-state seller and then use, store, or consume in Kansas when no Kansas sales tax was collected at the time of purchase.1Kansas Legislature. Kansas Statutes 79-3703 – Compensating Use Tax Imposed; Rate It applies to individuals and businesses alike, and it exists so that out-of-state purchases carry the same tax burden as items bought from a Kansas store.
When You Owe Kansas Use Tax
The trigger is simple. Did you pay Kansas sales tax when you bought the item? If not, and you used, stored, or consumed it in Kansas, you likely owe use tax on it. The statute reaches any transaction that would have been subject to Kansas sales tax if it had happened entirely inside the state.
Typical situations that create a use tax bill:
- Ordering electronics, clothing, or furniture online from a seller that doesn’t collect Kansas tax.
- Driving across the state line to buy equipment or supplies where no Kansas tax was charged.
- Buying office supplies, machinery, or inventory from out-of-state wholesalers.
Many large retailers and online marketplaces already collect Kansas tax at checkout because they meet the state’s economic nexus threshold of $100,000 in cumulative gross receipts from Kansas sales in the current or prior calendar year.2Kansas Department of Revenue. Pub. KS-1510 Sales Tax and Compensating Use Tax When a remote seller collects the tax, your obligation is satisfied and you don’t self-report. You’re most likely to owe use tax on purchases from smaller out-of-state vendors that haven’t crossed that threshold.
How Much You Owe
Kansas uses destination-based sourcing, so the rate is set by the address where you receive the goods, not where the seller is located. Your combined rate is 6.5% state plus any city, county, or special district tax at the delivery address.3Kansas Department of Revenue. Destination-Based Sourcing Rules for Sales and Compensating Use Tax Combined rates vary considerably across the state, so check the Department of Revenue’s rate lookup for your address before calculating.
Shipping and Delivery Charges
Since July 1, 2023, delivery charges that are separately stated on your invoice are excluded from the taxable price. If the seller rolls shipping into the item price without breaking it out, the entire amount including delivery is taxable.4Kansas Department of Revenue. Notice 23-02 Delivery Fees Charged by a Retailer Pull up the receipt and look for a separate shipping line before you do the math.
Credit for Tax Paid to Another State
You don’t pay twice on the same purchase. If you already paid sales or use tax to another state at a rate equal to or greater than your Kansas combined rate, nothing more is due to Kansas.5Kansas Office of Revisor of Statutes. Kansas Code 79-3704 – Exemptions If the other state’s rate was lower, you owe Kansas the difference. Paid 5% elsewhere and your Kansas combined rate is 9%? You owe 4%.
Groceries
Kansas eliminated the state sales tax on food and food ingredients as of January 1, 2025, dropping the state rate on groceries to 0%. Local taxes on food may still apply.6Kansas Department of Revenue. Pub. KS-1223 Food Sales Tax Rate Reduction The same reduced rate carries over to use tax on groceries bought out of state.
What’s Exempt
Use tax follows sales tax on exemptions. If a purchase would have been exempt from Kansas sales tax, it’s also exempt from use tax.7Kansas Office of Revisor of Statutes. Kansas Code 79-3606 – Exemptions The categories most people run into:
- Prescription drugs dispensed under a prescription from a licensed practitioner.
- Raw materials and components that become part of a finished product manufactured for retail sale, plus property consumed directly in the production process.
- Farm and aquaculture machinery, equipment, and replacement parts, and animals and fowl used primarily in agriculture or food production.
The statute’s full exemption list is long, covering certain nonprofit purchases and specific industrial machinery. Publication KS-1510 walks through the categories if you’re unsure.
One thing use tax doesn’t handle: private vehicle sales. Buying a car from a private seller is generally taxed through the county treasurer when you apply for a title or registration, not through use tax self-reporting. Immediate family transfers, true gifts, and certain corporate reorganization transfers are exceptions, and “immediate family” means direct ancestors and descendants and their spouses, so a sale between siblings doesn’t qualify.8Legal Information Institute. Kansas Administrative Regulations 92-19-30 – Motor Vehicles or Trailers; Isolated or Occasional Sale
How to File
The form you use depends on whether you’re reporting as an individual or as a business.
Individuals
Individual residents report use tax on Form K-40, the Kansas individual income tax return, which has a dedicated line for it.9Kansas Department of Revenue. Individual Income Tax Forms Add up the purchase price of all taxable out-of-state purchases for the year, apply your combined local rate, subtract any credit for tax paid to other states, and report the balance. It gets folded into your income tax liability, shrinking a refund or adding to a balance due. The deadline is the same as your income tax return, typically April 15.
Businesses
Businesses and other entities that regularly make out-of-state purchases file Form CT-10U, the Consumers’ Compensating Use Tax Return.10Kansas Department of Revenue. Consumers’ Compensating Use Returns are due by the 25th of the month following the end of your reporting period.11Kansas Department of Revenue. Consumers’ Compensating Use Tax Form CT-10U Filing frequency depends on prior-year tax owed:12Kansas Department of Revenue. Frequently Asked Questions About Sales
- Up to $1,000: annual return due January 25.
- $1,000.01 to $5,000: quarterly returns due April 25, July 25, October 25, and January 25.
- Over $5,000: monthly returns due by the 25th of the following month.
How to Pay
The Kansas Customer Service Center is the Department of Revenue’s online portal for filing returns and paying by ACH debit. Create an account and you can file sales, use, and other business tax returns in one place and view your filing history.13Kansas Department of Revenue. Customer Service Center ACH credit is also available if you’d rather instruct your bank to push funds to the state.
Credit card payments go through third-party vendors, not the Customer Service Center directly. The vendor charges a convenience fee based on your payment amount, and the fee is disclosed before you authorize.14Kansas Department of Revenue. Frequently Asked Questions About Credit Card Payments
To pay by mail, send the completed form with a check or money order to the Kansas Department of Revenue at PO Box 3506, Topeka, KS 66625-3506.15Kansas Department of Revenue. Business Mailing Addresses Write your tax account number on the check and include the payment voucher so the payment posts correctly.
Penalties and Interest if You File Late
Missing a deadline adds up fast. Late filing or late payment of consumers’ compensating use tax accrues a penalty of 1% per month on the unpaid balance, up to 24%. If the underpayment turns up through a field audit, the penalty is capped at 10%.16Kansas Department of Revenue. Penalty and Interest
Interest runs on top of the penalty. The 2026 rate is 8% annually, about 0.67% per month or fraction of a month. A forgotten use tax bill left alone for two years can nearly double between penalty and interest combined.
Records to Keep
Hold onto invoices, receipts, and shipping confirmations for every out-of-state purchase. The records should show the purchase date, vendor name, item cost, and any sales tax already paid. In an audit, this is your proof that you reported the purchase correctly or that it was exempt. Keeping records for at least three to four years beyond the filing date is a reasonable practice.