Kansas offers a vibrant environment for business with over 273,000 small businesses, employing roughly 49% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Kansas is crucial. This guide provides an overview of the various taxes small businesses in Kansas must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Kansas
Business owners in Kansas may be subject to various taxes depending on their business structure, activities, and revenue. Below is a breakdown of the main types of taxes.
Corporate Income Tax
Applicable Entities: C corporations, entities with C corp elections
Tax Rate: 4% plus a 3% surtax on all corporate income over $50,000
Filing Requirements: File Form K-120 by the 15th day of the fifth month after the tax year ends. (Any tax payments are due by the 15th day of the fourth month after the end of the tax year.)
Estimated Payments: Required if liability exceeds $500. Payments are due quarterly by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
SALT Parity Act Tax
Applicable Entities: Businesses treated as a partnership or S corporations at the federal level
Tax Rate: 5.58%
Filing Requirements: File Form K-120Sby the 15th day of the fifth month after the tax year ends. (Any tax payments are due by the 15th day of the fourth month after the end of the tax year.)
Estimated Payments: Required if liability exceeds $500. Payments are due quarterly by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Compensating Use Tax
Applicable Activities: Retail sales, certain services, certain admission fees
Tax Rate: 6.5% (local rates may apply)
Filing Requirements: File online annually, quarterly, or monthly based on sales volume.
Withholding Tax
Unemployment Insurance Tax
Applicable Entities: Employers with one or more employees who work for any portion of a day in 20 different weeks in a calendar year or that have gross payroll for any calendar quarter of $1,500 or more
Tax Rate: Varies based on the business’s experience rating
Wage Base: $14,000
Filing Requirements: File quarterly reports (Form K-CNS 100) by the last day of the month following the quarter.
Personal Property Tax
Applicable Entities: Businesses using nonexempt personal property
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by March 15.
How to File and Pay Kansas Business Taxes
Business taxes in Kansas can be filed and paid through various methods:
Online Filing and Payment: Use the Kansas Tax Payment Portal for electronic submissions and payments.
Mail: Send forms and payments to the address indicated (where applicable).
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Income Tax Returns: Due by the 15th day of the fifth month after the tax year ends. (Any tax payments are due by the 15th day of the fourth month after the end of the tax year.)
Estimated Tax Payments: Due quarterly by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Use Tax Returns: Due annually, quarterly, or monthly based on sales volume.
Withholding Tax Returns: Due annually, quarterly, monthly, semi-monthly, or quad-monthly based on withholding amounts.
Unemployment Insurance Reports: Due quarterly by the last day of the month following the quarter.
Tax Credits and Incentives
Kansas offers several tax credits and incentives for small businesses, including:
Promoting Employment Across Kansas (PEAK): Available to businesses that create a certain number of new jobs (the minimum number depends on the area) by locating, relocating, or expanding a business in Kansas. Qualified businesses can retain or be refunded 95% of the payroll withholding tax on qualified employees for up to seven years.
Job Expansion and Investment Credit: Available to businesses that invest in qualified business facilities and create at least two new jobs as a direct result. The credit equals $100 per new employee and $100 for each $100,000 of qualified investment; it’s limited to 50% of the tax on the qualified business facility income.
High Performance Incentive Program: Available to qualified businesses that pay above-average wages and commit to providing their workers with skills development. The program provides a 10% income tax credit on eligible capital investment, a sales tax exemption, and a training tax credit of up to $50,000.
Research and Development Tax Credit: This credit is available to businesses that make research and development expenditures in Kansas. It is 10% of the difference between the actual qualified research and development expenses for the year and the average of the actual expenditures made during the year and the two previous tax years.
Kansas’s business tax breakdown by business type
Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | SALT Parity Act election tax | Corporate income tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the SALT Parity Act election | Yes, if it makes the election | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the SALT Parity Act election | Depends on how it’s structured and if it makes the election | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the SALT Parity Act election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Kansas small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
Kansas Small Business Taxes: The Employer’s 2024 Guide
Kansas offers a vibrant environment for business with over 258,000 small businesses, employing half of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Kansas is crucial. This guide provides an overview of the various taxes small businesses in Kansas must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Kansas
Business owners in Kansas may be subject to various taxes depending on their business structure, activities, and revenue. Below is a breakdown of the main types of taxes.
Corporate Income Tax
Applicable Entities: C corporations, entities with C corp elections
Tax Rate: 3.5% plus a 3% surtax on all corporate income over $50,000
Filing Requirements: File Form K-120 by the 15th day of the fifth month after the tax year ends. (Any tax payments are due by the 15th day of the fourth month after the end of the tax year.)
Estimated Payments: Required if liability exceeds $500. Payments are due quarterly by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
SALT Parity Act Tax
Applicable Entities: Businesses treated as a partnership or S corporations at the federal level
Tax Rate: 5.58%
Filing Requirements: File Form K-120Sby the 15th day of the fifth month after the tax year ends. (Any tax payments are due by the 15th day of the fourth month after the end of the tax year.)
Estimated Payments: Required if liability exceeds $500. Payments are due quarterly by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Compensating Use Tax
Applicable Activities: Retail sales, certain services, certain admission fees
Tax Rate: 6.5% (local rates may apply)
Filing Requirements: File online annually, quarterly, or monthly based on sales volume.
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: Varies (note that individual income tax rates for 2024 changed mid-year)
Filing Requirements: File Form KW-5 and make payments online annually, quarterly, monthly, semi-monthly, or quad-monthly based on withholding amounts. File Form KW-3 online annually by January 31.
Unemployment Insurance Tax
Applicable Entities: Employers with one or more employees who work for any portion of a day in 20 different weeks in a calendar year or that have gross payroll for any calendar quarter of $1,500 or more
Tax Rate: Varies based on business’s experience rating
Wage Base: $14,000
Filing Requirements: File quarterly reports (Form K-CNS 100) by the last day of the month following the quarter.
Personal Property Tax
Applicable Entities: Businesses using nonexempt personal property
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by March 15.
How to File and Pay Kansas Business Taxes
Business taxes in Kansas can be filed and paid through various methods:
Online Filing and Payment: Use the Kansas Tax Payment Portal for electronic submissions and payments.
Mail: Send forms and payments to the address indicated (where applicable).
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Income Tax Returns: Due by the 15th day of the fifth month after the tax year ends. (Any tax payments are due by the 15th day of the fourth month after the end of the tax year.)
Estimated Tax Payments: Due quarterly by the 15th day of the fourth, sixth, ninth, and 12th months of the tax year.
Sales and Use Tax Returns: Due annually, quarterly, or monthly based on sales volume.
Withholding Tax Returns: Due annually, quarterly, monthly, semi-monthly, or quad-monthly based on withholding amounts.
Unemployment Insurance Reports: Due quarterly by the last day of the month following the quarter.
Tax Credits and Incentives
Kansas offers several tax credits and incentives for small businesses, including:
Promoting Employment Across Kansas (PEAK): Available to businesses that create a certain number of new jobs (the minimum number depends on the area) by locating, relocating, or expanding a business in Kansas. Qualified businesses can retain or be refunded 95% of the payroll withholding tax on qualified employees for up to seven years.
Job Expansion and Investment Credit: Available to businesses that invest in qualified business facilities and create at least two new jobs as a direct result. The credit equals $100 per new employee and $100 for each $100,000 of qualified investment; it’s limited to 50% of the tax on the qualified business facility income.
High Performance Incentive Program: Available to qualified businesses that pay above-average wages and commit to providing their workers with skills development. The program provides a 10% income tax credit on eligible capital investment, a sales tax exemption, and a training tax credit of up to $50,000.
Research and Development Tax Credit: This credit is available to businesses that make research and development expenditures in Kansas. It is 10% of the difference between the actual qualified research and development expenses for the year and the average of the actual expenditures made during the year and the two previous tax years.
Kansas’s business tax breakdown by business type
Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | SALT Parity Act election tax | Corporate income tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the SALT Parity Act election | Yes, if it makes the election | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the SALT Parity Act election | Depends on how it’s structured and if it makes the election | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the SALT Parity Act election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Kansas small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
