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STARTING AND OPERATING A BUSINESS IN KANSAS Copyright © 2000, Michael D. Jenkins
CONTENTS OF THIS CHAPTER:
I. INTRODUCTION I. INTRODUCTION Kansas has a fairly typical tax and legal structure under which businesses must operate, but some desirable features such as no property taxes on business inventories (generally), no bulk sales law on the purchase of a business, no required fictitious name registration, and relatively low income tax rates make it an attractive place to do business. Like most states, Kansas imposes an income tax, a franchise tax on corporations, limited partnerships and limited liability companies, a sales and use tax, various excise taxes, with property taxes imposed at the local level. The state has also adopted a limited liability company (LLC) law, and a limited liability partnership (LLP) law, so that businesses operating in Kansas in LLC or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally. At present, the state's economy is relatively robust, in terms of the level of unemployment and other economic measures. For example, in March, 2000, the Kansas unemployment rate was only 3.2%, up from 2.9% a year earlier, and well below the national rate of 4.1%. To view the latest federal Bureau of Labor Statistics unemployment rate data for Kansas or any other state, visit the BLS website. II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS. (a) In General. A business that operates in Kansas can operate as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. In addition, like the federal tax law, the state income tax law also recognizes S corporations, for income tax purposes, and generally allows the income or losses of an S corporation to "flow through" and be taxed or deducted at the shareholder level, rather than taxing the corporation itself as an entity. Kansas also provides for limited liability partnerships, in which no partner is liable for debts of the partnership, in general, as in the case of a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC. Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below. (b) Sole Proprietorships. In general, sole proprietorships in Kansas can be formed with no formalities. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, as well. No separate tax form filing is required, generally, for a sole proprietorship, under the Kansas income tax law. Instead, as with the Schedule C on your federal Form 1040, you simply report the net income or loss from your sole proprietorship on your state personal income tax return. See Section IV(c) for information on the Kansas income tax and filing requirements for individuals. (c) Partnerships. As a rule, general partnerships in Kansas can be formed with no formalities, although it is highly advisable to have a written partnership agreement. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, for any type of partnership, including general or limited partnerships, or limited liability partnerships. A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Kansas law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership with the secretary of state, together with a filing and recording fee of $150. Foreign limited partnerships must also register before being allowed to do business in Kansas, and must pay a registration fee of $150. Both domestic and foreign limited partnerships are also required to file an annual report with the secretary of state and pay an annual franchise tax on capital of between $40 and $20,000. See the discussion of corporations in Section II(d) for details on the franchise tax, which also applies to corporations, LLPs, and LLCs. For information on limited partnership filing requirements,
see the contact information for the offices of the Kansas
Secretary of State, listed in Section VI(a).
Limited liability partnerships (LLPs) are a form of partnership permitted under the laws of Kansas. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal and Kansas state income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. To form an LLP in Kansas, a partnership must a statement of qualification (Form SLP) as an LLP with the secretary of state and pay a filing fee set by the secretary of state, currently $150. Foreign LLPs, those created under the laws of another state, must also register with the secretary of state, on Form SFP, and pay the same filing fee as a domestic LLP. For either a domestic or foreign LLP, the Kansas franchise tax applies to the net capital accounts located in the state as reported on the federal partnership income tax return. The franchise tax is levied at the rate of 0.125% of the LLP's taxable equity (capital accounts) attributable to Kansas, with a maximum franchise tax of $20,000. Every LLP doing business in Kansas, including both domestic and foreign LLPs, must file an annual renewal application and pay the annual franchise tax, plus an annual franchise fee of $40. For more information on LLP registration and reporting requirements, see the contact information for the offices of the secretary of state, listed in Section VI(a). Note that one potential drawback of LLPs, if you will do business in other states besides Kansas, is that some states, like California and New York, only recognize certain types of professional partnerships as LLPs. If yours is not a professional partnership, such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
Partnerships, as entities, are not subject to state income tax in Kansas. Instead, the income or losses of the partnership, as allocated among the partners, must be reported on the personal income tax returns of the individual partners (or on the corporate tax returns of any corporate partners). However, as noted above, franchise tax of up to $20,000 a year applies to limited partnerships and LLPs. Partnerships are required to file an annual tax information return with the state. For details on Kansas partnership tax return filing requirements, see Section IV(c). (d) Corporations. To form a corporation in Kansas, you must file articles of incorporation with the Kansas Secretary of State and pay a fee of $75. A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Kansas, by filing an application for a certificate of authority and paying a single filing fee of $100. For more information on filing articles of incorporation or applying for a certificate of authority to do business in Kansas, see the contact information for the offices of the secretary of state, listed in Section VI(a). In addition, once your corporation is formed, it will be required to file annual reports and pay an annual franchise tax, at the rate of 0.125% of the taxable shareholder equity attributable to Kansas, payable to the secretary of state. The maximum annual franchise tax is $20,000 ($5,000 prior to 2004). Limited partnerships, LLPs, and LLCs are also subject to this tax. The annual report and franchise tax payment are due at the same time as the corporation's annual income tax return, plus an annual $40 franchise fee. Failure to file the annual report on a timely basis could result in suspension or revocation of your corporation's charter. In addition to paying federal income taxes on its income, a corporation that does business in Kansas must also file corporate income tax returns with the state. See Section IV(c) for a discussion of state corporate income tax rates and corporate tax return filing requirements. For tax forms and more information on corporate income and franchise taxes in Kansas, see the contact information for the offices of the Kansas Department of Revenue (for income taxes) and the Kansas Secretary of State (franchise tax), both of which are listed in Section VI(a). UPDATE NOTE: PER RIA NEWSLETTER, 10.18.04, FEES FOR FILING, INDEXING CORP. DOCUMENTS, SUCH AS FOR INCREASING OR DECREASING CAPITAL, WILL NOW BE SET BY THE SEC. OF STATE, AT UP TO $150 (PREVIOUSLY SET AT $20). (e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns. Kansas recognizes S corporations for income tax purposes, and treats them in a manner similar to the federal tax treatment. However, S corporations are subject to the Kansas franchise tax like other business corporations, as described in Section II(d). (f) Limited Liability Companies. Kansas, like every state in the U.S., has adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Kansas may also choose to operate in the form of an LLC. In most states, LLCs are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes. See Section IV(c) for a discussion of the income tax treatment of LLCs under Kansas tax laws. To form an LLC under the laws of Kansas, one or more persons must file articles of organization with the secretary of state, which must be accompanied by filing fees of $150. Formerly, an LLC in Kansas was required to have at least two members. However, since July 1, 1998, Kansas law was changed to permit the creation of 1-member LLCs. Foreign LLCs, those formed under the laws of another state, must submit a registration application, before they may do business in Kansas, the secretary of state and paying a registration and recording fee of $150. In addition to initial filing fees, an LLC formed in Kansas must subsequently file annual reports with the secretary of state and annual franchise tax, ranging from $40 to $20,000 with each such annual report. A foreign LLC is also required to file an annual report and pay the same annual franchise tax. For more information on filing articles of organization for an LLC, see the contact information for the offices of the secretary of state, listed in Section VI(a). III. BUSINESS ACQUISITIONS (a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired. You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal and state income tax laws, and other state tax laws, such as sales/use tax or property tax laws. Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below. (b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public. Kansas is one of the states that has repealed its bulk sale laws, so you no longer have to be concerned with this requirement when buying a business in Kansas. (c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires. In Kansas, you should require the seller to obtain an unemployment tax release from the Department of Human Resources, showing the amount of unemployment tax, if any, that must be withheld from the purchase price. You should also obtain a sales tax release before closing. Contact the Kansas Department of Revenue regarding the sales tax liability of the seller and how to protect your business from being liable for any such unpaid sales or use tax of the seller. (d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. To obtain the seller's favorable experience rating as a successor employer, you will need to apply on a timely basis to the Division of Employment Security of the Kansas Department of Human Resources, requesting that you be treated as a successor employer. IV. KANSAS TAXES AND OTHER GENERAL REQUIREMENTS. (b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or county. Before you open your business, contact your local city or county hall and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees. However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. In addition, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and any construction or improvements to an existing structure will usually require a building permit. If you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business, on a regular basis. State governments have also traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Kansas has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing. For information on state licensing and business registration requirements in Kansas, the state's Department of Commerce and Housing has set up a First Stop Clearinghouse office in Topeka to help you find your way through the maze of business licenses, permits, taxes and regulations you must deal with under Kansas laws. See the contact information for the First Stop Clearinghouse listed in Section VI(a). (c) Income and Franchise Taxes. Kansas has both an individual income tax and a corporate income tax, as well as a franchise tax on corporations, limited partnerships, and LLCs. The Kansas individual income tax is imposed at a maximum tax rate of 6.45% in 1999 and later years. Individual taxpayers generally pay state income tax on their business earnings from a sole proprietorship, or on their share of the earnings of a pass-through entity, such as a partnership, S corporation, or LLC. The Kansas personal income tax return is Form 40, which must be filed with the Division of Taxation of the Kansas Department of Revenue by April 15th each year for a calendar year taxpayer. Partnerships, or entities taxable as partnerships, such as LLCs, are not subject to state income taxation in Kansas, but must file an information return with the Department of Revenue each year, showing each partner's share of taxable income, losses, and credits, on Form 65. Limited partnerships, LLPs and LLCs are all subject to the Kansas franchise tax on capital, which ranges from $40 to $20,000 a year (previously $5,000, for tax years that began before January 1, 2004). General partnerships, not registered as LLPs, are not subject to this tax. All "pass-through" entities, including LLCs, LLPs, general and limited partnerships and S corporations, effective since July 1, 2003, are required to withhold Kansas income tax on taxable income (whether or not distributed) that is allocable to nonresident owners -- members, partners or shareholders. Tax must be withheld at the highest Kansas income tax rate, currently 6.45%, and is reported to the Division of Taxation on Form KW-7/KW-7S, and to the nonresident owner on Form K-19. Individual taxpayers doing business as sole proprietors, or who are partners in partnerships, or members of LLCs, are required to make payments of estimated Kansas individual income taxes, if their net tax liability (not covered by withholding) exceeds $500 (previously $200). Estimated tax payments are due in four installments, on the 15th day of the 4th, 6th, and 9th months of the taxable year, and the 15th day of the first month of the following year. To avoid penalties for underpayment of estimated tax, you must either pay in 90% of the current year's tax, or 100% of the previous year's tax, as shown on the tax return. The Kansas corporate income tax rate, on corporations other than S corporations, is 4% on the first $50,000 of taxable income, and 7.35% on income over $50,000. The state corporation income tax return is Form 120, which must be filed with the Division of Taxation of the Kansas Department of Revenue by the 15th day of the fourth month following the end of the taxable year, or by April 15th in the case of a corporation whose taxable year is the calendar year. Corporations are required to make estimated tax payments of their state corporate income tax in advance, if their tax liability for the year equals or exceeds $500. Estimated tax payments are due in advance, in four equal installments, on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year. Penalties will be imposed for failure to make the required estimated tax payments on a timely basis. However, if the preceding year was a full year of 12 months, the current year payments need only be equal to 100% of the prior year's tax liability, if less. In Kansas, a limited liability company (LLC) is taxed in the same manner as a partnership, for income tax purposes, thus avoiding the possible double taxation of income that can occur with a corporation. Like a corporation or a limited partnership, LLCs are subject to a state franchise tax, payable to the secretary of state each year, ranging from $20 to $2,500. Kansas state law now permits one-member LLCs, effective since July 1, 1998. (d) Sales and Use Tax. Kansas imposes a general sales tax on retail sales of tangible personal property and certain types of services, including dry cleaners, laundries, car washes, cable and other subscriber radio and TV services. The statewide portion of the sales tax applies at the rate of 5.3. The tax rate was scheduled to drop to 5%, but the 5.3% rate has now been made permanent. Local governments are allowed to adopt local sales taxes, at varying tax rates of up to 2%. Sellers of tangible personal property or taxable services are required to register as sellers and to collect and pay over the state and local sales and use taxes to the Division of Taxation of the Department of Revenue. There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer. Effective July 1, 2002, the former exemption for the sale of custom computer software programs was eliminated, as was the exemption for the charges for modification of computer software that was developed for a single end user. However, this exemption was restored, effective January 1, 2005. A shadow tax, the use tax, is also imposed at the same rate as the sales tax. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Kansas. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold. Before making any taxable sales, you will need to register with the Department of Revenue on Form BT/rg-16, Business Tax Application, to obtain a state registration number and a sales and use tax Certificate of Registration. No fee is charged to register for the sales and use tax. For more information on Kansas sales and use tax registration and compliance, see contact information for the offices of the Division of Taxation of the Kansas Department of Revenue in Section VI(a). (e) Real and Personal Property Taxes. In Kansas, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due. Kansas also imposes personal property taxes on tangible personal property. However, certain kinds of business personal property, such as mercantile and manufacturing inventories, are exempt from personal property tax in Kansas. Every business must submit a list of its tangible personal property as of January 1 each year to the county tax appraiser and assessor. The report is generally due by March 1, or by April 1 for a corporation. As a practical matter, the state of Kansas no longer imposes a personal property tax on intangible personal property. However, cities and counties are allowed by state law to impose local intangible property taxes on the gross earnings derived from certain intangible property, such as stocks, bonds, notes, and debentures. (f) Other Business Taxes. Kansas imposes a number of other taxes on businesses, including:
(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group." In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name. Kansas does not require any type of filing for a business that uses an assumed or fictitious name. However, if your business is incorporated, you may reserve the corporate name with the secretary of state upon filing and paying a small fee. You may also reserve the names of LLCs and limited partnerships. V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES (a) Employer Registration and Withholding. If you have any employees, you will already be withholding federal income tax and FICA taxes from their wages. Since Kansas imposes a state income tax on the income of individuals, you will need to also withhold Kansas income tax from the wages of your employees. Before you begin to pay wages, you must register as an employer with the Kansas Department of Revenue, on Form BT/rg-16, Business Tax Application. This form can also serve as your sales tax registration, if you are a seller of tangible personal property or taxable services. For more information on Kansas income tax withholding and
registration requirements for employers, see the contact
information for the offices of the Department of Revenue,
listed in Section VI(a).
(b) Unemployment and Other State Payroll Taxes. If your business employs one or more individuals in each of 20 weeks during any calendar year or if your payroll amounts to $1,500 in any calendar quarter, or if you acquire nearly all of the assets of a Kansas business already subject to unemployment tax, you, as an employer will be required to pay state unemployment tax based on the amount of such wages paid. Employers subject to the Kansas unemployment tax are required to register with the Unemployment Tax Office of the Kansas Department of Human Resources. You must register on Form K-CNS 010, Status Determination Report, within 15 days after your first employee begins work for you, to determine if you are an employer, for unemployment tax purposes. You should also request from that agency a copy of their free publication, The Handbook for Employers. New employers are required to pay tax at a rate of 2.0% (plus an additional amount depending on the industry) in 2000 on the first $8,000 of wages paid to each employee. After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you have terminated who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. Note that all existing experienced-rated employers, except those with negative reserve balances, were given a 0% tax rate in 1999 and several preceding years, and new employers only paid a 1% rate. However, this moratorium has ended in 2000. All state unemployment taxes are imposed upon you as the employer, and, under Kansas law, cannot be charged to your employees or withheld from their wages. For more information on your Kansas unemployment tax obligations as an employer, see the contact information for the offices of Unemployment Tax Office of the Kansas Department of Human Resources, listed in Section VI(a). (c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state. In Kansas, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor or a partner in a partnership is generally not considered an employee, and some family members may be excluded from coverage. Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job-related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees. Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance. As an employer, you must notify injured employees of their benefits and post a notice in the workplace informing your employees of their workers' compensation coverage. For more detailed information regarding your obligations as an employer under the Kansas workers' compensation laws, contact your insurance carrier or see the contact information for the offices of the Division of Workers' Compensation of the Kansas Department of Human Resources, listed in Section VI(a). (d) State Wage and Hour Laws. Some employees of certain small firms not engaged in interstate commerce are not covered by the federal minimum wage and overtime laws. However, even if few or none of your employees are covered by the federal wage-hour laws, because your firm does less than $500,000 a year in gross sales and the employees in question are not deemed to "...engage in (interstate) commerce...," they will still generally be subject to the Kansas wage-hour laws, which provide for a state minimum hourly wage that is currently $2.65, the lowest minimum wage rate in the nation. Kansas also requires that employers pay time-and-a-half for overtime, defined as any hours worked in excess of 46 hours a week. Note that, as under federal wage-hour laws, certain classes of executive, administrative, and professional employees are exempted from the Kansas wage-hour rules. Besides the federal wage-hour posters that you must display in the workplace, you must also display a state wage-hour poster, which you can obtain from the Employment Standards Division of the Kansas Department of Human Resources. In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Kansas. Work permits are required for employing children under the age of 16 who are not enrolled in or attending school, and can be obtained from the superintendent of schools or a district judge in the county of residence of the child. (e) State Occupational Safety and Health Laws. Employers in Kansas must comply with state and federal job safety laws designed to prevent injuries resulting from unsafe or unhealthy conditions in the workplace. The Industrial Safety and Health Section of the Kansas Department of Human Resources offers free OSHA consultations in Kansas, but does not enforce safety laws, as Kansas leaves that function to the federal OSHA agency. Note that while you may obtain a free safety consultation from federal OSHA experts, they must and will cite you for any violations they discover at your workplace. This is not the case with state safety inspections. If you request a safety consultation from the Industrial Safety and Health Section and they detect violations, they will not cite you if you promptly correct the unsafe conditions. For information on your job safety and health obligations as an employer, and required posters, contact the nearest office of the U.S. Department of Labor -- OSHA. For possible on-site safety consultations, see the contact information for the Industrial Safety and Health Section of the Kansas Department of Human Resources, Division of Workers Compensation, listed in Section VI(a). (f) Other Miscellaneous State Labor Laws. Other Kansas labor laws you need to be aware of, as an employer, include the following: (1) Wage payments to terminated employees. The Kansas Wage Payment Act requires wages to be paid to employees at least once a month, and no later than 15 days after the end of the period in which the wages were earned. An employee who quits or is discharged must be paid any final wages by the next regular payday through the regular payment channels, or, if mailing of the payment is requested, the payment must be postmarked no later than the next such payday. (2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues. Kansas has a right-to-work law, which makes it an attractive place to do business for employers. (3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Kansas, and display a poster informing employees of their rights. You can obtain this poster from the Kansas Human Rights Commission, at the address listed in Section VI(a). (4) Reporting new hires. Under federal welfare reform laws, employers in all states are now required to report newly-hired (or rehired) employees to a designated state agency (the Department of Human Resources, New Hire Directory, for Kansas employers) within 20 days after the date of hire. VI. STATE SOURCES OF HELP AND INFORMATION (a) Key State Agencies Contact Information. Kansas, as many states have done in recent years, has set up a "one-stop" center to help your new or existing businesses to obtain all necessary state licenses and permits from a single office, without your having to go from agency to agency to meet all the legal and regulatory licensing requirements. The First Stop Clearinghouse, part of the Kansas Department of Commerce and Housing, can help you with a wide range of licensing, permitting, tax and regulatory issues in Kansas. This office also publishes the inexpensive booklet, Steps to Success: A Guide to Starting a Business in Kansas. The address for this agency is:
You can register your business with the state for Kansas income tax, sales and use tax, employer withholding, and various other state taxes on a single form, obtained from the Department of Revenue, Form BT/rg-16. Its address is listed below. Addresses and other contact information for other key Kansas state government agencies mentioned in this book are listed below for your convenience. SECRETARY OF STATE. Contact the office of the secretary of state for information on:
STATE SALES TAX. Obtain your sales and use tax Certificate of Registration and information on the Kansas sales and use tax law from the Kansas Department of Revenue, at the address listed above for that agency. STATE UNEMPLOYMENT TAX. Contact the Unemployment Tax Office of the Division of Employment Security, Kansas Department of Human Resources to determine whether you are an employer subject to payment of state unemployment taxes, at the address listed above for that agency. WORKERS' COMPENSATION INSURANCE. If you employ workers for whom you must supply workers' compensation coverage, contact the following agency for further information:
(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Kansas to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you.
(c) Internet Sites. If you have access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Kansas. Since new sites are appearing constantly, you might also want to search for other Kansas government Web sites by using one of the popular Internet search engines, such as Excite! or Yahoo. To start your Internet search for Kansas government information, you may want to begin with the following Internet sites: State of Kansas Home Page: Kansas Department of Revenue Web site, which offers state tax forms and information: Kansas Secretary of State, Corporate Division, listing of various corporate, limited partnership, and LLC filing fees: Kansas First Stop Clearinghouse one-stop site for information on Kansas business and government: Center for Entrepreneurship at Wichita State University:(d) Financing Sources. For information and help on locating financing for your small business, contact the nearest U.S. Small Business Administration office in Kansas, or contact the First Stop Clearinghouse of the Kansas Department of Commerce and Housing, at the address listed in Section VI(a) for that agency. Also, for information about the Certified Development Companies (CDCs) in Kansas that provide SBA-supported and other loans to small businesses in the state, contact:
The address of the main SBA Office in Kansas is:
(e) Other Sources of Help. The Center for Entrepreneurship is a nationally-recognized center, at Wichita State University, which provides a number of services to small businesses, including educational courses and workshops as well as acting as a referral for individual business needs. They also publish the helpful Resource Book for Business Startups. Contact them at:
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Copyright © 2000 Michael D. Jenkins
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