|KRIS W. KOBACH
Secretary of State
STATE OF KANSAS
Memorial Hall, 1st Floor
120 SW 10th Avenue
Topeka, KS 66612-1594
Franchise Tax and Fee Information
1. What is the franchise tax and where do I pay it?
The franchise tax is a payment for the privilege of doing business in Kansas. Business entities filing for a tax year end of December 31, 2004 and later must pay the franchise tax to the Department of Revenue under the new law: Business entities authorized to do business in Kansas by the Secretary of State, with $100,000 or more taxable equity in Kansas, shall pay .125% of that net equity, with a maximum tax payment of $20,000.
Prior to January 2005, this tax was paid along with the franchise fee to the Secretary of State at the time of filing the annual report. Starting in January 2005, the franchise tax must be paid to the Department of Revenue when filing the Franchise Tax Return, Form K-150. The franchise tax is due on the fifteenth day of the fourth month following the tax closing month.
The franchise tax can be filed and paid online starting February 2005, at www.ksrevenue.org/franchisetax.htm. You may also file with the Department of Revenue a paper Franchise Tax Return, Form K-150, available from the departmentís forms order line: (785) 296-4937 or at the Web site www.ksrevenue.org/franchisetax.htm. Please call (785) 368-8222 if you have questions about the franchise tax.
2. What is the franchise fee and where do I pay it?
The franchise fee is a filing fee paid to the Secretary of State at the time of filing the annual report. The flat fee is $55 for all for-profit entities. Not-for-profit entities pay a flat fee of $40. This fee and the annual report are due on the fifteenth day of the fourth month following the tax closing month.
The franchise fee and annual report may be paid and filed electronically. Annual report forms also may be printed and mailed to:
Kansas Secretary of State
Kris W. Kobach
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612-1594
The franchise fee and annual report must be received, complete and correct, by the Secretary of State on or before the forfeiture date, or the business will be forfeited.
3. When are franchise tax and franchise fee payments due?
The franchise tax and franchise fee payments are each due on the 15th of the fourth month following the tax closing month. The tax closing month is selected at the time of filing the Articles of Formation.
4. What happens if I pay my franchise tax after the due date?
The Department of Revenue will assess penalties and interest for late payment of the franchise tax.
5. What happens if I pay my franchise fee after the due date?
The business will have a delinquent status if the franchise fee and annual report are not received before the due date. If the franchise fee and annual report are not received before the forfeiture date (3 months after the due date), the business will be forfeited. If the business chooses to continue operations in Kansas, it must reinstate, by filing the annual report and a reinstatement form, and pay all penalty and filing fees.
6. Can I pay the franchise tax and fee together?
No. Under the new law, the franchise tax must be paid with the K-150 to the Department of Revenue. The franchise fee must be paid with the annual report to the Secretary of State. Your business will be forfeited if the complete and correct annual report form and franchise fee are not received by the Secretary of State by the forfeiture date.
7. What if I am filing a report for a tax year end prior to December 31, 2004?
Your filing will fall under the old law. Please see our review of the old and new law. Under the old law, you pay the tax and fee to the Secretary of State. The minimum amount is $55 and the maximum amount is $5015. Please use the Franchise Tax Computation Worksheet to compute the amount due.
8. What is the advantage of filing the franchise fee electronically?
If you file electronically your filing can be immediate and complete. For-profit entities pay a reduced fee of $50. Not-for-profit entities pay a flat fee of $42.
9. Why do not-for-profit entities pay more to file electronically than they pay for a paper filing?
Not-for-profit entities pay a flat fee of $40 for paper filings and $42 for electronic filings. Not-for-profit fees have been reduced to the minimum fee required by law, $40. This minimum fee does not cover transaction fees that the Secretary of State must pay to provide electronic filings, therefore $2 must be added to not-for-profit filings. The Secretary of State conducts regular fee studies to evaluate and restructure fees, and will review these and other fees in the future. The Secretary of State encourages entities to file electronically and will continue to direct fees and processes that make electronic filing cost-effective and more efficient for business entities.
10. Am I being double taxed under the new law?
No. Under the new law you pay a flat filing fee to the Secretary of State, and a tax based on net worth, if your business entityís net worth is $100,000 or more to the Department of Revenue.
11. Do I file my annual report on the new forms even if I am filing under the old franchise tax law?
Yes. New annual report forms are required for all filings - even if you are filing under the old franchise tax law. A tax computation worksheet is provided with paper forms. If you file under the new franchise tax law, you do not need to complete the tax computation worksheet.
12. I am confused by this new law and am unsure how to file. What can I do?
File your annual report electronically. The electronic filing system will guide your filing to the appropriate old or new law requirements.
Please contact our Customer Service Center (785) 296-4564 if you have questions about the franchise tax and fee law.