Kansas levies a 6.5 percent sales and use tax rate on tangible personal property and services (retail sales). Companies that want to take the pass-through entity election must do so on the K120S return every tax year. If your business elects to be taxed as a pass-through entity, you must make quarterly estimated payments in the same way that corporations do (by mailing in Form K-120ES). Alternatively, you can pay online through the Kansas Tax Payment Portal.
The Kansas Department of Revenue (DOR) is in charge of collecting sales and use taxes.
Business Formation and Compliance
Kansas Business Taxes for LLCs. All of our business formation packages include a FREE business tax consultation. Sanctions and penalties exist for not paying taxes for a small business in Kansas. The specific sanctions and penalties can vary depending on the amount owed and the time the taxes remain unpaid.
Understanding Sales and Local Taxes
Cities in Kansas can charge extra taxes on local businesses. You might pay local income tax, property tax, or sales tax. Local sales taxes range from 1% to 3%. With state sales tax, total rates range from 7.5% to 9.6%. Some businesses pay more taxes based on their industry or products. Food companies pay a 4% food tax. Other state industry taxes exist too.
The state corporate income tax has a maximum 7% rate over two brackets. Kansas also has a business income tax levied on gross taxable income of most incorporated firms and corporations in the state. This business income tax is like the personal income tax, using a bracketed system.
LLCs in Kansas enjoy small business tax benefits. An LLC’s profits go directly to owners, who report this on personal returns. This differs from Kansas corporations facing double taxation on profits and dividends.
Kansas corporate tax rates apply income taxes to net earnings of corporations operating in the state, similar to personal income taxes. Firms, like people filing income taxes, must submit yearly returns. Owners can deduct items like goods, equipment, and employee wages. A 4 percent tax is charged on federal taxable income, with 3 percent surtaxes over $50,000.
Tax Responsibilities for LLCs
Do LLC pay taxes in Kansas?
Kansas levies a 6.5 percent sales and use tax rate on goods and services. The statewide sales tax for businesses is 6.5%. Companies wanting to take the pass-through entity election must do so yearly on the Kansas return. If electing to pay taxes this way, you must make quarterly payments, either online through the Kansas Tax Payment Portal or by mailing Form K-120ES.
LLCs in Kansas enjoy tax benefits. An LLC’s profits go directly to owners, reporting income on returns. This differs from corporations facing double taxation on profits and dividends.
Regardless of your LLC’s size, you must pay Kansas taxes. LLCs don’t pay federal taxes, but pass profits onto owners’ returns. You must pay self-employment tax on all member income. The current rate is 15.3% in Kansas. Every LLC also pays: 6.5% sales tax; 3.10% to 5.70% income tax; and federal taxes. Some Kansas cities or counties also charge sales tax up to 10.5% across the state. For LLCs with incomes up to $50,000, there is a 4% flat rate. Over $50,000 an additional 3% tax applies.
LLCs are taxed based on members. A single-member LLC is taxed like a sole proprietorship. Multi-member LLCs are taxed as partnerships. All are pass-through entities by default, with income and losses reporting to members who file personal taxes. The Department and IRS also permit LLCs to have corporation tax status.
The 2022 SALT Parity Act lets partnerships, S corporations, and some LLCs pay 5.7% tax as entities, rather than passing liability to owners. To take this election, act yearly on the tax return. If elected, make quarterly estimated payments like corporations, by form or online portal.
Kansas income tax ranges from 3.10% to 5.70%, based on taxable income. Over $30,000 the rate is 5.70%. The sales tax rate is 6.50%, applying to most goods and some services.
LLC fees include the 15.3% self-employment tax on member income and 6.5% sales tax. Single-member LLCs also pay income tax from 3.10% to 5.70%. Over $50,000 pay an extra 3% tax. LLC costs $165 to file in Kansas. Expedited processing is available. Federal taxes also apply. Staying current on taxes lets small firms calculate accurately and avoid penalties.