Kansas Taxes Retail Sales Paid by Digital Currency

Nov 11th, 2020

The Kansas Department of Revenue ("Department") has announced sales tax requirements for digital currency like bitcoin and cryptocurrencies. In the announcement, Kansas stated that transaction fees for digital currency are not taxable. However, when a customer pays for tangible personal property or a taxable service entirely or in part with digital currency, tax is due unless an exemption applies. Digital currency is a form of consideration that is included in the seller's gross receipts.

Note that sales tax is measured by the fair retail market value of the property or service received and will be calculated using the list price in U.S. dollars, not the value of the digital currency. Also, digital currency is not recognized as legal tender so the Department will not accept digital currency as a form of payment or remittance.