Kansas Small Business Taxes: The Employer’s Complete 2023 Guide

Feli Oliveros

This year, US News ranked Kansas as the ninth most affordable state to live in, in large part because of its low cost of living and inexpensive housing. So, it’s little wonder why the Sunflower State is also a great place for entrepreneurs to start a small business. Not only does your budget stretch further, but you can reinvest more of your money into your venture as well. 

Of course, there are many other factors to consider. If you’re thinking about opening shop in Kansas—or if you already have—here’s what you need to know about the state’s business taxes: 

What business taxes do you have to pay in Kansas?

The state taxes your business must pay depends on a number of factors, including your business structure, employer status, and annual revenue. Most small business owners in Kansas only need to pay income tax, sales tax, employer taxes, and any local or industry-related taxes. Unlike many other states, most businesses aren’t subject to a franchise tax.

Kansas personal income tax

Pass-through entities—which include sole proprietorships, partnerships, and limited liability companies (LLCs)—pay income taxes through the personal tax returns of their owners, partners, or members. 

Kansas’s personal income tax rate for 2023 ranges from 3.1% to 5.7%, depending on your earnings. 

How to pay

Kansas personal income tax returns (Form K-40) are due on April 15. Taxpayers can file and pay their Kansas state taxes online using one of many methods. But if you prefer, you can also mail your tax form along with payment voucher Form K-40V to the address below instead: 

Individual Income Tax
Kansas Department of Revenue
PO Box 750260
Topeka, KS 66699-0260

You may also be required to make quarterly estimated tax payments if your tax liability is $500 or more after withholding and credits. 

Payments are due by the 15th day of the fourth, sixth, and ninth months of the current fiscal year and the first month of the following fiscal year. For calendar filers, these due dates are April 15, June 15, September 15, and January 15. 

You can pay your estimated taxes online through the Kansas Department of Revenue Customer Service Center. If you want to pay by mail instead, send your payment along with Form K-40ES to the following address: 

Estimated Tax
Kansas Department of Revenue
PO Box 3506
Topeka, KS 66625-3506

Partnerships and S corporations must file another return (Form K-120S) in addition to the ones their owners file individually. These returns are due by the 15th day of the fourth month after the end of the fiscal year. If your company follows the calendar year, this deadline is April 15. File your return electronically via IRS eFile, or mail it to the address listed on the tax form. 

For more information on how to file Kansas personal income taxes, review the tax form instructions provided by the Department of Revenue. If you’d like to learn more about the partnership and S corporation income tax, visit the Department of Revenue website

Kansas Pass-Through Entity Tax

As a result of the SALT Parity Act passed in 2022, Kansas partnerships, S corporations, and LLCs taxed as S corporations now have the option to pay taxes as entities, rather than passing the tax liability onto the business owners. 

Pass-through entities that take this election pay a tax rate of 5.7%. 

How to pay

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

If you have any questions about the Kansas pass-through entity tax, read this list of frequently asked questions about the SALT Parity Act or contact the Department of Revenue. 

Kansas corporate income tax

All corporations that are incorporated or do business in Kansas are subject to the state’s corporate income tax, which ranges from 4% to 7% in 2023. Additionally, all corporate income over $50,000 is subject to another 3% surtax. 

How to pay

The state of Kansas mandates that corporate income tax returns should be filed no later than one month after the due date for the federal tax return. So, Kansas corporate returns are due by the 15th day of the fifth month after the end of the fiscal year (or May 15 for calendar filers). However, any tax payments should be made by the 15th day of the fourth month after the end of the fiscal year. 

File your corporate tax return (Form K-120) through the Kansas Department of Revenue Customer Service Center. Alternatively, you can send your return by mail to this address: 

Kansas Corporate Tax
Kansas Department of Revenue
PO Box 750260
Topeka, KS 66699-0260

Corporations must make quarterly estimated tax payments using Form K-120ES if their state tax liability for the tax year is expected to exceed $500. These payments are due by the 15th day of the fourth, sixth, ninth, and 12th month of the fiscal year. Submit payments online through the Customer Service Center, or by mail to the address below: 

Corporate Estimated Tax
Kansas Department of Revenue
PO Box 3506
Topeka, KS 66625-3506

To learn more about filing Kansas corporate income tax returns, review the tax form instructions from the Department of Revenue. 

Sales tax

If your business sells physical products or taxable services, you may be required to collect sales tax at the point of purchase and pay it to the Kansas Department of Revenue. More specifically, this tax is levied on:

  • The retail sale, lease, or rental of tangible personal property
  • The installation, application, repair, servicing, alteration, or maintenance of tangible personal property
  • Admissions to entertainment, amusement, or recreation places in the state

The state sales tax rate for the 2023 tax year is 6.5%. 

How to pay

If you haven’t already, create your business’s tax account online through the Kansas Department of Revenue Customer Service Center. From there, you’ll be assigned an identification number and filing frequency based on your sales tax liability.

You’ll use the same online portal to file taxes, using the form provided to you by the system. Note that you should still file a return even if you didn’t collect any taxes for the filing period. 

Sales taxes can also be paid online via the Customer Service Center. If you prefer to pay by mail, the system will provide you with a voucher to print out and send with your payment. 

If you need additional information about the Kansas sales tax, visit the  or review this list of frequently asked questions

Withholding tax

Companies with employees who live or perform work in Kansas must withhold taxes from each of these employees’ wages and pay them to the state. 

Use the wage bracket tables and percentage formula provided by the Department of Revenue to determine your withholding tax liability. 

How to pay

Once you hire your first employees, you must register your business with the Kansas Department of Revenue before you can pay them their first wages. Register online through the Customer Service Center, or mail in a business tax application (Form CR-16) to this address: 

Kansas Department of Revenue
PO Box 3506
Topeka, KS 66625-3506

Employers submit a KW-5 deposit report and pay withholding taxes through the Customer Service Center on an annual, quarterly, monthly, semi-monthly, or quad-monthly basis. 

Filing frequencies are assigned based on the size of your payroll. The filing frequency for new employers is determined by your estimated tax amount stated on your business tax application. Keep in mind that you must file deposit reports even if you didn’t withhold any taxes for the filing period.

All employers are also required to file an annual withholding tax return (Form KW-3) with the Department of Revenue by the last day of January after the end of the tax year. Send this tax form, along with Forms W-2 and 1099, to the address below:

Withholding Tax
Kansas Department of Revenue
PO Box 3506
Topeka, Kansas 66601-3506

For more information on Kansas’s withholding taxes, including filing frequency thresholds and due dates, read this tax guide from the Department of Revenue. 

Unemployment insurance tax

Certain employers in the state of Kansas must pay state unemployment insurance (UI) taxes to cover benefits for qualifying workers who leave the company. The Kansas Department of Labor determines whether an employer must pay these taxes based on factors like the nature of the business, the number of employees, and the amount of wages paid to employees.

Established employers pay a tax rate ranging from 0.17% to 6.4% of the first $14,000 of each employee’s earnings. New construction employers are assigned a 6% tax rate, while all new non-construction employers pay a 2.7% tax. 

How to pay

To determine whether your business must pay unemployment taxes, you must first register with the Kansas Department of Labor through the Kansas Employer online portal

After you create an account for your business, select “File a KCNS 010 Status Report to register your business for Unemployment Tax” on the next page and create an unemployment tax account. The state will use the information you provide here to determine whether you need to pay unemployment taxes. Note that new employers are required to do this within 15 days of hiring their first employee. 

Employers that are required to pay UI taxes must file a Quarterly Wage Report and Unemployment Tax Return every quarter by the end of the month after the tax period ends. Companies with 50 or more employees must file and pay online via KansasEmployer. Those with fewer than 50 employees will be sent a paper version of the form that must be mailed to the Department of Labor by the filing deadline. However, all employers are encouraged to file electronically. 

For more information on filing Kansas unemployment taxes, get in touch with the Department of Labor or review these frequently asked UI tax questions.

Other industry-related and local taxes

In addition to the taxes charged by the state, municipalities in Kansas can choose to levy their own taxes on businesses in their jurisdictions. You might find your business responsible for local income tax, personal property tax, or sales tax, for instance. Local sales tax rates range from 1% to 3%, for an average combined state and local sales tax rate of 8.66%. 

Some businesses may also pay additional taxes because of the industry they’re in or the products and services they sell. For example, companies that handle food or food ingredients pay a 4% food tax. Other industry-specific state taxes include: 

  • Drug Tax Stamps
  • Dry Cleaning Environmental Surcharge/Solvent Fee
  • Liquor Drink Tax
  • Mineral Tax
  • Motor Fuel Tax
  • Tire Excise

Keep in mind that this isn’t an exhaustive list, so check with your tax advisor or accountant to make sure you’re on top of all your state business tax obligations.

Kansas business tax breakdown by business type

Now that you know what business taxes you can expect to pay in Kansas, here we’ve included a breakdown of federal and Kansas state taxes by business entity. You can review them at a glance, as needed. Keep in mind that pass-through entities pay federal income taxes through the personal tax returns of their owners or members. 

Business typeState income taxesSales and use taxWithholding taxUnemployment insurance taxFederal income taxes
C corporationYesYes, if applicableYes, if you hire employeesYes, if you hire employeesYes
S corporationYesYes, if applicableYes, if you hire employeesYes, if you hire employeesYes (pass-through)
LLC with C corp electionYesYes, if applicableYes, if you hire employeesYes, if you hire employeesYes
LLCYesYes, if applicableYes, if you hire employeesYes, if you hire employeesYes (pass-through)
Partnership YesYes, if applicableYes, if you hire employeesYes, if you hire employeesYes (pass-through)
Sole proprietorshipYesYes, if applicableYes, if you hire employeesYes, if you hire employeesYes, by way of individual income tax

File your Kansas small business taxes with Gusto

As a business owner, your days may be filled with an endless amount of tasks and not enough time to get through them all. But with Gusto’s powerful payroll software at your fingertips, you’ll get more done in less time by setting up your account to run payroll and file payroll taxes automatically. 

Ready to try it out for yourself? Create an account today, or get in touch with our team if you have any questions. 

Feli Oliveros Feli Oliveros is a freelance finance and business writer with experience covering personal and small business finance. In 2015 she graduated from UCLA, where she earned her bachelor’s degree in English and minored in Anthropology.
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