During the 2009 session, the Kansas legislature enacted Senate Substitute for House Bill 2365 (HB 2365). The bill became law in late May 2009. A Section of this bill shortens the statute of limitations period for filing sales and use tax refund claims from three years to one year from the due date of the return. The one-year refund period applies to all sales and use tax refund claims that are filed on or after June 15, 2009.  Refund claims that were filed before June 15, 2009 are still subject to the original three-year statute of limitations.  Refund claims filed after expiration of the statute of limitations are time-barred and will not be processed.  We have provided a short description of four common scenarios to help you interrupt the law better.

Claims for sales and use tax refunds and credits that are submitted to the department:

All claims that are filed and postmarked after June 15, 2009 are subject to the one-year statute of limitations.  The statute of limitations starts to run from the statutory due date of the return for the reporting period that contained the tax underpayment or overpayment.  This means that if a taxpayer is a monthly filer and files a refund claim that is postmarked on or before September 25, 2010, the refund claim will be considered timely for any overpayments that were reported on the taxpayer's August 2009 return (due on September 25, 2009) or later returns.

A taxpayer may not file an amended sales or use tax return after June 15, 2009 that reduces the amount of tax that was reported for any reporting period that is outside the one-year statute of limitation. For any such return, a refund or credit claim is time-barred.

Sales and use tax refunds and credits that are discovered or claimed during a field audit:

The statute of limitations on sales and use tax assessments remains at three years from the date the return is filed for the tax period in question and is unchanged by this legislation.

The manner in which the Department of Revenue will allow sales and use tax refunds and credits identified during the course of a field audit have been questioned in regard to the one year limitation verse three year window of audit. After some discussions, the Department of Revenue will allow overpayments of sales and use tax made during the audit period to offset any tax assessment, not to exceed the amount of such assessment.  To receive a refund of any over payment from the audit, the taxpayer under audit must file a refund claim pursuant within the one-year statute of limitations.

Refund claims submitted to retailers by consumers:

A claim for a sales or use tax refund or credit that is filed by a consumer with the retailer and postmarked after June 15, 2009 are subject to the one-year statute of limitations and claims seeking refunds on transactions reported on returns due prior to the one-year limitations period are therefore time-barred. Transactions barred by the one-year statute of limitations will not generate a credit for the retailer or consumer. For a refund claim that a customer submits to a retailer within the one-year statute of limitations, a credit will be allowed to the retailer if the tax is correctly refunded or credited by the retailer to the customer.

Claims for bad debt deductions and returned goods:

All claims for bad-debt deductions and returned goods that are filed after June 15, 2009 will be subject to the one-year statute of limitations.  Deductions are measured from the due date of the sales tax return for the reporting period in which the bad debt could have first been written off for federal income tax purposes.  A claim made to the department for goods that are returned to a retailer after June 15, 2009 shall be subject to the one-year statute of limitation.

If you feel would like more detail regarding this update or any other sales and use tax issues please me at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .