Kansas lawmakers need to enact tax exemption for small-scale businesses

43 states have enacted laws designed to exempt small businesses from out-of-state taxes that are burdensome to collect. Kansas legislators should do the same.



February 26, 2020 - 9:51 AM

Small businesses in Kansas have a distinct competitive disadvantage, and the Legislature should act in this session to make Kansas tax policy consistent with other states.

Last year’s Wayfair decision from the U.S. Supreme Court said that states can mandate that businesses without a physical presence, like a storefront or warehouse, can collect sales taxes on transactions in the state.

The ruling was designed to get states to be able to collect taxes from major online retailers, like Wayfair and Amazon. The decision said only retailers with a “substantial nexus” presence in a state were subject to the ruling. The original law from South Dakota collected sales taxes only from retailers with more than 200 transactions in the state or more than $100,000 in sales, exempting small businesses from the need to collect out-of-state sales tax from purchasers and pay it to states.

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