If you want to start and run a Kansas limited liability company (LLC), you'll need to prepare and file various documents with the state. This article covers the most important ongoing reporting and state tax filing requirements for Kansas LLCs.
The State of Kansas requires you to file an annual report for your LLC. You can file your annual report online at the Kansas Business Center or on paper using Form LC-50. The annual report is due on the 15th day of the fourth month after your tax closing month. For example, if your tax year is the same as the calendar year, the annual report is due by April 15. You can file the report as early as January 1. The current filing fees are $50 for online filings and $55 for paper filings.
State Business Tax
When it comes to income taxes, most LLCs are so-called pass-through tax entities. In other words, the responsibility for paying federal income taxes passes through the LLC itself and falls on the individual LLC members. By default, LLCs themselves do not pay income taxes, only their members do. Some states do impose a separate tax or fee on LLCs for the privilege of doing business in the state. Kansas, though, is not one of those states. (Years ago there was a franchise tax that could apply to LLCs but it has since been repealed.)
However, in some cases, the owners of an LLC choose to have their business treated like a corporation for tax purposes. This choice is made by filing IRS Form 2553 with the IRS. (See the IRS website for the form.) Unlike the default pass-through tax situation, when an LLC elects to be taxed as a corporation, the company itself must file a separate tax return. The State of Kansas, like almost every other state, taxes corporation income. Kansas's corporation tax rate is a flat 4% of federal taxable income (with state-specific adjustments) plus a 3% surtax on taxable income above $50,000. The tax is payable to the state's Department of Revenue (DOR). Use the state's corporation income tax return (Form K-120) to pay the tax. For more details, check Nolo’s article, 50-State Guide to Business Income Tax, or the DOR website.
Does your LLC have employees? If so, you'll need to pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not covered here. (But note that federal employer tax obligations start with obtaining a federal employer identification number (EIN).) However, Kansas employers also must pay taxes to the state.
First, you'll need to withhold and pay employee income taxes to the DOR. Begin by registering your business with the DOR either online (at the Business Center website) or on paper (Form CR-16, Kansas Business Tax Application). Once you've registered, you'll need to file withholding taxes on a periodic basis (for example semi-monthly, monthly, or quarterly) using Form KW-5. You'll also need to use Form KW-3 each year to reconcile your LLC's tax withholding. For more information, including regarding online filings, check the DOR website.
In addition, you'll probably need to register to pay state unemployment insurance (UI) taxes. These taxes are handled through the Kansas's Department of Labor (DOL). You can register for these taxes online or on paper (Form K-CNS 010, Employer Status Report). Then, each quarter, use Forms K-CNS 100 and K-CNS 101 to report on wages and pay the UI taxes. For more information, including regarding online filings, check the DOL website.
If your LLC will sell goods to customers in Kansas, you will need to collect and pay sales tax. This means you'll have to register for this purpose with Department of Revenue and then make periodic sales tax payments for goods sold. You can register online or mail in Form CR-16. After you've registered, you'll be sent a seller's permit. Then, on a periodic basis (for example monthly), you must submit sales tax returns to the DOR. You can do this on paper(Form ST-16 or ST-36) or online (at the KSWebTax website). For more information, check the DOR website.
If you will be doing business in states other than Kansas, you may need to register your LLC in some or all of those states. Whether you're required to register will depend on the specific states involved: each state has its own rules for what constitutes doing business and whether registration is necessary. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the Internet) will be considered doing business for registration purposes. Registration usually involves obtaining a certificate of authority or similar document.
For more information on the requirements for forming and operating an LLC in Kansas, see Nolo’s article, 50-State Guide to Forming an LLC, and other articles on LLCs in the LLC section of the Nolo website.