Kansas Sales Tax Payment Plan & Resolution
Checklist
If you operate a business or are self-employed in Kansas, sales tax collection and payment are legal requirements. Sales tax is money you collect from customers on behalf of the state and must remit to the Kansas Department of Revenue according to a set schedule. When sales tax obligations fall behind (whether due to missed payments, incomplete filings, or accumulating debt), the state issues notices and may pursue collection actions.
Understanding how Kansas handles sales tax payment plans and resolutions is essential, as prompt action can prevent penalties, interest charges, and enforcement actions such as liens or business license suspensions. This checklist explains what happens when sales tax payment issues arise and the steps to resolve them.
What This Issue Means
Sales tax payment issues occur when a business fails to remit collected sales tax on time, underpays the amount owed, or does not file required sales tax returns. This can happen for a single reporting period or accumulate across multiple months or quarters.
When the state identifies a shortfall or missed payment, it typically sends a notice explaining the amount due and any penalties or interest added.
A Kansas sales tax payment plan is an agreement with the Kansas Department of
Revenue that allows a business to pay an outstanding tax debt in installments rather than in one lump sum. This is an administrative arrangement, not a legal settlement or forgiveness. The business agrees to make regular payments in accordance with a schedule set by the state.
Why the State Issued This or Requires This
Kansas law requires all businesses that collect sales tax to remit it based on their filing
frequency. The amount of sales tax collected typically determines the filing frequency
annual filing for amounts collected of $0 to $1,000, quarterly filing for $1,000.01 to
$5,000, and monthly filing for amounts exceeding $5,000. When payments are late or incomplete, the Department of Revenue sends notices to inform the business of the debt and provide an opportunity to pay.
A payment plan request may be issued because the business has contacted the state asking for relief, or the state may offer one during collection proceedings. Common
triggers include cash flow problems, administrative errors, or a pattern of late payments.
The state uses payment plans as a collection tool to recover tax debt while keeping businesses operational.
What Happens If This Is Ignored
If a sales tax payment notice is ignored and no action is taken, the state typically escalates its collection efforts. The Department of Revenue may add additional penalties and interest, send follow-up notices, or refer the debt to its collection division.
In some cases, the state may seek a tax lien against business assets or personal property, file a claim in court, or pursue suspension of the business's sales tax permit or other licenses.
The longer a debt remains unpaid or unaddressed, the more costly it becomes due to compounding interest and penalties. Ignoring official notices also signals non-cooperation, which may limit the state's willingness to work out a payment arrangement.
What This Does NOT Mean
Receiving a notice about unpaid sales tax does not mean the business will automatically lose its license or face criminal charges. A payment plan offer does not mean the tax debt is forgiven or reduced; only the payment schedule changes. Being contacted by the state does not mean a lien has already been filed or that legal action is imminent, though these steps may follow if the issue remains unresolved.
An outstanding sales tax debt does not prevent a business from operating immediately, though continued non-payment may eventually trigger permit suspension or other enforcement measures.
Understanding Kansas Sales Tax Payment Plan Fees and
Terms
Kansas charges a $25 payment plan administration fee on all approved payment plans exceeding 90 days. This fee has been in effect since July 1, 2013. Additionally, penalties and interest continue to accrue throughout the life of the agreement on any unpaid tax.
Any refunds or other monies due to the taxpayer will be applied to the liability, even if the taxpayer has made all installment payments on time. In some cases where the payment plan exceeds six months, a tax warrant may be filed with the district court to
protect the state's interest. A tax warrant will also be filed if the statute of limitations is due to expire during the term of the payment plan.
Checklist: What to Do After Receiving a Sales Tax Notice
or Identifying a Payment Issue
Step One: Locate and Review the Notice
Find any official notice from the Kansas Department of Revenue regarding unpaid sales tax. Read the notice thoroughly, including the amount owed, the period covered, and any deadlines listed. Note whether the notice is a demand for payment, a final notice, or something else.
Step Two: Verify the Amount and Period
Gather your business records, including sales tax returns filed and payments made.
Compare what the notice says you owe to what your records show. If the amount or period seems incorrect, note the discrepancy.
Step Three: Contact the Kansas Department of Revenue
Call the Department of Revenue's main line or the Taxpayer Assistance Division.
Provide your business name, sales tax permit number, and the notice number if shown.
Ask for clarification on the debt, the period it covers, and the available options.
Document the date, time, and name of the person you spoke with.
Step Four: Ask About Payment Plan Eligibility
Inquire whether a payment plan is available for your specific debt. Ask what the process is for requesting or establishing a plan. Find out whether the state requires upfront documentation, financial statements, or other information.
Be prepared to discuss the $25 administration fee that applies to payment plans exceeding 90 days.
Step Five: Gather Financial Information (if Requested)
If the state requests financial information to evaluate a payment plan, collect the relevant documents. This may include recent bank statements, business income records, or a list of current obligations. Do not provide information not explicitly requested.
Step Six: Submit Your Kansas Sales Tax Payment Plan Request
Follow the state's instructions for requesting a payment plan. According to the Kansas
Department of Revenue guidance, requests can be made using Form CM-16 (for businesses) or Form CM-15 (for individuals). Forms can be faxed to the Collections
Department or emailed to the designated address.
Include your permit number, the amount owed, the period in question, and how much you can pay monthly. Keep a copy of any submission for your records.
Step Seven: Wait for State Response
The state will review your request and determine whether a plan can be offered. If approved, you will receive written confirmation of the payment plan terms, including the monthly amount, payment due date, and the $25 administration fee (if the plan exceeds
90 days). If not approved, the state will explain why and may outline other options or next steps.
You should receive a payment plan confirmation by mail within 14 days of the state processing your request.
Step Eight: Make Payments According to the Plan
Once a plan is in place, make payments on the agreed schedule. Pay on or before the due date each month. Ensure payments are sent to the address specified in the plan agreement.
Keep records of each payment made. Payment options include check, money order, electronic check through the Kansas payment portal, or credit card.
Step Nine: File All Current Sales Tax Returns On Time
During the payment plan period, continue to file and pay sales tax for current periods on schedule. Taxpayers who are granted a payment plan must file and pay all current and future taxes and estimated payments when due. Falling behind on new obligations while paying down past debt may jeopardize the plan and result in immediate enforcement action.
Step Ten: Monitor the Plan
Keep the payment plan agreement in a safe place. Track your payments and confirm that the state is crediting them correctly. Contact the state if a payment goes missing or if you cannot make a scheduled payment.
Any additional debts not included in the agreement or missed payments will constitute a default under the contract.
Step Eleven: Notify the State of Changes
If your business circumstances change significantly (such as closure, sale, or a significant change in income), contact the Department of Revenue. If you cannot make a scheduled payment, reach out to the state before the due date to discuss options.
Step Twelve: Confirm Completion
Once all payments are made, request written confirmation from the state that the debt is satisfied. Keep this confirmation with your tax records.
What Happens After This Is Completed
After a Kansas sales tax payment plan is established, the state monitors compliance with the terms. Assuming payments are made on schedule, the state takes no additional collection action while the plan is active. Once all payments are made in full, the state considers the tax debt resolved and closes the account.
If a payment is missed or the plan is violated, the state may terminate the agreement and resume collection efforts, potentially including liens, levies, or permit suspensions.
Follow-up notices or communications may come if there are any issues with payments or timing.
Common Mistakes to Avoid
Missing payment deadlines can result in termination of the plan. Payments must be made on or before the date specified in the payment plan. Set a reminder before each payment is due.
Failing to file current returns while in a payment plan is a standard error. A payment plan addresses past debt only; sales tax for current reporting periods must still be filed and paid on schedule.
Failing to respond to communications from the state during the plan period can cause problems. If the state sends notices, letters, or calls, respond promptly.
Changing payment amounts without state approval may violate the plan. If your financial situation changes, contact the state to discuss an adjustment to your plan.
Not keeping records of payments leaves you without proof if a payment is lost or misapplied. Maintain documentation of each payment, including the date it was sent or received.
Closing the business without notifying the state can create complications. If the company closes or transfers ownership, inform the Department of Revenue immediately.
Assuming penalties or interest are waived is incorrect. A payment plan does not reduce or forgive penalties and interest; these charges continue to accrue and are included in what is owed.
Frequently Asked Questions
How much does a Kansas sales tax payment plan cost?
Kansas charges a $25 payment plan administration fee on all approved payment plans exceeding 90 days. Additionally, interest and penalties on the original tax debt continue to accrue while the plan is active. The total amount owed will be higher than the original tax amount due to these additional charges.
Can I request a more extended payment plan if I cannot afford the monthly payment?
Payment plan terms may be negotiable depending on the size of the debt and the business's financial situation. Contact the state to discuss options if the proposed amount is unaffordable. The state's ability to adjust terms is not guaranteed.
Will a sales tax debt appear on my personal credit report?
A sales tax debt is a business obligation. Whether it appears on personal credit reports depends on your business structure and whether the debt is reported to credit bureaus.
Contact the state for clarification specific to your situation.
What happens if I miss one payment on the plan?
A single missed payment may trigger a notice from the state, but it does not automatically terminate the plan. Contact the Department of Revenue immediately to explain and arrange a catch-up. Repeated or ignored missed payments are more likely to result in plan cancellation and the resumption of collection action.
Can I pay off the plan early without a penalty?
Early payment of a tax debt is permitted. Paying off a plan early typically reduces total interest paid. Confirm with the state that early payoff is acceptable, and there are no penalties for doing so.
Facing State Tax Enforcement Action?
If you’ve received a notice related to sales tax or payroll tax enforcement and are unsure how to respond, our team can help you understand your options and next steps.
We help with
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
20+ years experience • Same-day reviews available
