United States: Kansas Enacts Sales And Use Tax Click-Through Nexus And Affiliate Nexus Provisions

On April 16, Kansas Governor Sam Brownback approved legislation that implements click-through nexus and affiliate nexus provisions for purposes of the state's sales and use tax.1 The click-through nexus provision creates a presumption of nexus for out-ofstate retailers that have an agreement to pay a Kansas resident for providing a link to the retailer's Web site. The affiliate nexus provision creates a presumption of nexus for outof- state retailers if a person or affiliate in Kansas performs certain activities for the retailer. Also, the legislation adds sales tax registration requirements for government contractors and amends service fee provisions. Most of the law is effective on July 1, 2013, but the click-through nexus provision is effective 90 days after the date on which the statute is published in the Kansas Register, which effects enactment of the statute.2

Click-Through Nexus

An out-of-state retailer is presumed to be doing business in Kansas if the retailer enters into an agreement with one or more Kansas residents under which the residents, for a commission or other consideration, directly or indirectly refer potential purchasers, whether by a link on an Internet Web site or otherwise, to the retailer.3

This provision only applies if the cumulative gross receipts from sales by the retailer to purchasers in Kansas, who are referred to the retailer by all residents under this type of agreement, exceed $10,000 during the preceding 12 months.4 For purposes of this provision, the 12 months before the effective date of this law are included as part of the preceding 12 months (as a means to ensure that the provision is not further delayed by application of this test).

Rebuttable Presumption

The presumption may be rebutted by submitting proof that the residents with whom the retailer has an agreement did not engage in any activity within Kansas that was significantly associated with the retailer's ability to establish or maintain its market in Kansas during the preceding 12 months.5 The retailer may prove this by submitting written statements from all of the residents with whom the retailer has an agreement that they did not engage in any solicitation in Kansas on behalf of the retailer during the preceding year.6

Affiliate Nexus

An out-of-state retailer is presumed to be doing business in Kansas if any person, other than a common carrier, that has sales tax nexus with Kansas engages in any of the following activities:

  • Sells the same or a substantially similar line of products as the retailer and does so under the same business name or a substantially similar business name;
  • Maintains a distribution house, sales house, warehouse or similar place of business in Kansas that delivers or facilitates the sale or delivery of property sold by the retailer to consumers;
  • Uses trademarks, service marks or trade names in Kansas that are the same or substantially similar to those used by the retailer;
  • Delivers, installs, assembles or performs maintenance services for the retailer's customers within Kansas;
  • Facilitates the retailer's delivery of property to customers in Kansas by allowing the retailer's customers to pick up property sold by the retailer at an office, distribution facility, warehouse, storage place or similar place of business maintained by the person in the state;
  • Has a franchisee or licensee operating under its trade name if the franchisee or the licensee is required to collect Kansas sales tax; or
  • Conducts any other activities in Kansas that are significantly associated with the retailer's ability to establish and maintain a market in the state for the retailer's sales.7

Any affiliated person conducting any of the activities listed above or satisfying the click through nexus provisions has nexus with Kansas sufficient to require the person to collect and remit taxes under the U.S. Constitution and federal laws if the person were making taxable retail sales of tangible personal property or services in Kansas.8 An "affiliated person" means any person that is a member of the same "controlled group of corporations" as defined by IRC Section 1563(a) as the retailer or any other entity that, notwithstanding its form of organization, bears the same ownership relationship to the retailer as a corporation that is a member of the same controlled group of corporations.9

Rebuttable Presumption

The presumptions may be rebutted by demonstrating that the activities of the person or affiliated person in Kansas are not significantly associated with the retailer's ability to establish or maintain the retailer's market in Kansas.10

Government Contractors

Effective July 1, 2013, sales tax registration requirements apply to any person selling or leasing tangible personal property to the state, a state department, a state agency or an agent.11 Prior to the sale or lease, the person and any affiliated person must register with the Kansas Department of Revenue as a retailer and comply with all legal requirements imposed on a retailer, including the requirement to collect and remit sales or use tax on all taxable sales of tangible personal property to customers in Kansas.12

Tax Collection Agreements with State

Effective July 1, 2013, any agreement between a retailer and the state's executive branch or any other state agency or department that the retailer is not required to collect sales and use tax in Kansas despite the presence of a warehouse, distribution center or fulfillment center that is owned or operated by the retailer or an affiliated person is void, unless specifically approved by the legislature.13

Service Fees

A taxpayer entering into an installment payment plan with the Department to pay off a delinquent tax liability is assessed a service fee of $25 (previously, $10) if the time period exceeds 90 days.14 A taxpayer requesting a full or partial abatement of tax liability is assessed a service fee of $50.15


Kansas is the latest state to follow the trend of enacting click-through nexus and affiliate nexus provisions that are designed to improve sales and use tax collections.16 Although the sales tax nexus legislation being enacted by many states is similar, the legislation in each state differs slightly from the legislation in other states, resulting in a significant burden on companies that have no physical presence in these states, but have tangential contacts with these states through affiliates or associates.

The click-through statute enacted by Kansas is relatively similar to the New York statute. The New York State Court of Appeals, the state's highest court, recently held that New York's click-through nexus statute does not facially violate the U.S. Constitution under either the Commerce or Due Process Clauses.17

The affiliate nexus provision is not limited to out-of-state retailers that have a common ownership relationship with an entity in Kansas. Nexus is established if a "person" in Kansas engages in any of the listed activities for the retailer. There is no requirement that the "person" be a member of the same controlled group of corporations as the retailer. Along with the various states that have proposed or enacted sales tax nexus laws, the Marketplace Fairness Act is currently being considered by the U.S. Senate.18 The Act would allow states to require remote sellers to collect and remit sales tax to jurisdictions in which their customers are located. States would be given the authority to compel the collection of sales tax provided they simplify their sales tax laws. Online retailers with outof- state sales of no more than $1 million a year would be exempt. Presumably, if this federal legislation is enacted and states make the simplifying changes to their sales tax statutes, the need to enact click-through nexus or affiliate nexus legislation to compel remote sellers to collect sales tax will wane.


1 S.B. 83, Laws 2013.

2 Note that this legislation was published in the Kansas Register on April 25, 2013. Thus, the click-through nexus provision will be effective July 24, 2013.

3 KAN. STAT. ANN. § 79-3702(h)(2)(C). The click-through nexus provision applies to sales made and uses occurring on or after the effective date and without regard to the date the parties entered into the agreement.

4 Id.

5 Id.

6 Id. The statements must be provided and obtained in good faith.

7 KAN. STAT. ANN. § 79-3702(h)(2)(A). Note that the legislation repeals existing nexus presumptions where: (i) the retailer holds a substantial ownership interest in, or is owned in whole or substantial part by, a retailer maintaining a sales location in Kansas and the retailer sells the same or a substantially similar line of products as the related Kansas retailer and does so under the same or a substantially similar business name, or the Kansas facilities or employees of the related Kansas retailer are used to advertise, promote or facilitate sales; or (ii) the retailer holds a substantial ownership interest in, or is owned in whole or in substantial part by, a business that maintains a distribution house, sales house, warehouse or similar place of business in Kansas that delivers property sold by the retailer to consumers.

8 KAN. STAT. ANN. § 79-3702(h)(2)(B).

9 KAN. STAT. ANN. § 79-3702(j).

10 KAN. STAT. ANN. § 79-3702(h)(2)(D).

11 S.B. 83, § 9(a).

12 Note that the new statute uses the same definition of "affiliated person" that is used by the sales tax nexus statute above. S.B. 83, § 9(c).

13 S.B. 83, § 9(b).

14 KAN. STAT. ANN. § 75-5162(a).

15 KAN. STAT. ANN. § 75-5162(b).

16 The following states have enacted click-through nexus laws: Arkansas, California, Connecticut, Georgia, Illinois, New York, North Carolina, Rhode Island and Vermont (contingent on 15 or more states enacting click-through nexus legislation).

17 Overstock.com, Inc. v. New York State Department of Taxation and Finance, New York State Court of Appeals, Nos. 33 and 34, March 28, 2013. For a discussion of this case, see GT SALT Alert: New York State Court of Appeals Holds Click-Through Nexus Statute Is Facially Constitutional.

18 S. 743, originally introduced as S. 336 on Feb. 14, 2013.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.