The Kansas Department of Revenue has issued an amendment that allows delivery charges/ fees to be excluded from sales that are subject to sales tax. The notice that was effective on July 1, 2023, changing the definition of “sales or selling price" to the Bill K.S.A 79-3602 determined that delivery charges should not be subject to Kansas sales tax if listed separately on an invoice.
Prior to July 1, 2023, all delivery charges and shipping fees were included in the sales price of consumer purchased products, and therefore these delivery charges were subject to the Kansas sales tax rates. “Delivery charges” are defined by the Kansas Department of Taxation as charges by the seller of personal property or services for preparation and delivery to a destination by the purchaser including but not limited to, transportation, shipping, postage, handling, crating, and packing. These charges should not include delivery of direct mail if separately stated on the billing document.
To qualify for the exclusion of these costs for delivery and shipping fees from the taxable sales amount, delivery charges must be separately stated on the invoice and must clearly be identified. Any charges that aren’t properly listed
Record Maintaining & Reporting
It is very important for business owners to understand the requirement of record keeping when delivery charges are excluded from the gross sales used to calculate the sales tax liabilities. This Bill does not issue a requirement that invoices, sales receipts or purchases orders are required to split the costs associated with delivery charges, however, these charges must be separately stated on invoices in order to be excluded from the sales tax calculation.
The Kansas Department of Revenue emphasizes that delivery charges must be both reasonable and provable which makes the separation of these fees on the sales documents a must! There is no documentation required when submitting the standard sales tax filings and making payments, but retailers must keep records of all delivery costs and always make them available to the Director of Taxation or any authorized representative upon request.
This change that went into effect on July 1, 2023 will apply to both state and local taxes, including the special districts within cities, counties, and subdivisions. You can find the current rates on the Kansas Department of Revenue website at:
If you have any questions, feel free to contact our office at 913-451-0056.