Kansas Attorney General Opinion 2019-008

September 30, 2019
ATTORNEY GENERAL OPINION NO. 2019- 8
The Honorable Susan Wagle
State Senator, 30th District
4 North Sagebrush
Wichita, KS 67230
The Honorable Ron Ryckman
State Representative, 78th District
14234 W. 158th St.
Olathe, KS 66062
Re: 	Taxation—Kansas Compensating Tax—Definitions; Substantial Nexus
Synopsis: 	Kansas has no legally adopted standard by which the Department of
Revenue may comply with the command of K.S.A. 79-3702(h)(1)(F) that the
statute be applied only to those retailers required “to collect and remit tax
under the provisions of the constitution and laws of the United States.” The
Department’s new policy interpreting the scope of K.S.A. 79-3702(h)(1)(F),
as described in Notice 19-04, is of no force or legal effect because it was
not lawfully adopted in compliance with Kansas law. Cited herein: 	K.S.A.
54-106; 77-415; 77-438; 77-621; 79-2974; 79-3602; 79-3603; 79-3606; 79-
3608; 79-3654; 79-3666; 79-3702; 79-3703; 79-3705a; 79-3705c; 79-
3705d; 79-3707; Kan. Const., Art. II, § 1; U.S. Const., Art. I, § 8, cl. 3; U.S.
Const., Amend. XIV.
* 	* 	*
Dear President Wagle and Speaker Ryckman:
As State Senator for the 30 th District and State Representative for the 78 th District,
respectively, you independently ask for our opinion on whether Notice 19-04 1 (the
1 https://www.ksrevenue.org/taxnotices/notice19-04.pdf (accessed August 30, 2019). The Notice was
published in Kansas Register, Vol. 38, No. 33, p. 1017 (August 15, 2019).

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Page 2
“Notice”) regarding sales tax requirements for retailers doing business in Kansas, issued
on August 1, 2019, by the Kansas Department of Revenue (the “Department”), was
lawfully imposed or offends either Kansas law or the United States Constitution.
The Department’s Notice 19-04 states, in pertinent part:
On June 21, 2018, the United States Supreme Court issued its decision in
the case of South Dakota v. Wayfair, Inc. et al. 2 	In its decision, the Court
overturned the requirement established by prior rulings that a remote seller 3
must have a physical presence in the state before the state can require the
remote seller to collect that state’s sales or [compensating] use tax. This
Notice is intended to provide guidance to remote sellers doing business in
Kansas.
The Department relies on K.S.A. 79-3702(h)(1)(F), 4 in light of the holding in Wayfair, as
authority to begin enforcement5 of a policy that every out-of-state retailer, regardless of
physical presence in Kansas, is required to collect and remit sales 6 or compensating use
tax7 (“collect and remit”) on behalf of the State on any taxable sale of tangible personal
property or services delivered into Kansas. 8 	It appears the Department at least since
January 2019 consistently has asserted that, absent contrary action by the Legislature, it
has existing statutory authority post-Wayfair to implement this policy. 9
For the reasons stated below, we conclude the Department’s new interpretation of K.S.A.
79-3702(h)(1)(F) and its associated new enforcement policy, as described in Notice 19-
04, were not a valid exercise by the Department of any authority that may have been
2 585 U.S. ___, 138 S.Ct 2080 (2018).
3 “Remote seller” is not defined in statute but is the term found in K.S.A. 79-3654. This statute enumerates
the legislative findings, including that “remote sellers should not receive preferential tax treatment at the
expense of local ‘main street’ merchants, nor should such vendors be burdened with special, discriminatory
or multiple taxes.” K.S.A. 79-3654(c). The Department offers a definition of “remote seller” in Notice 19-04
by asserting that “[a] retailer who sells tangible personal property and/or services into a state where it does
not have physical presence is commonly referred to as a ‘remote seller.’”
4 See L. 2003, Ch. 159, Sec. 2.
5 Notice 19-04 states that “[t]he Department will not enforce the statutory requirements to collect and remit
on these remote sellers for sales made into Kansas prior to October 1, 2019.”
6 K.S.A. 79-3601 et seq.
7 K.S.A. 79-3701 et seq.
8 Notice 19-04 also asserts a definition of a “marketplace facilitator,” a term not used or defined in statute.
We need not analyze whether the Department, acting through the Notice, has authority to regulate
marketplace facilitators because the plain terms of the Notice impose no legal obligation on any
marketplace facilitator. Rather, the Notice uses hortatory language to implore that marketplace facilitators
“should” contact the Department “concerning entering into a voluntary compliance agreement” with the
Department. Thus, on its face, the portion of the Notice related to a “marketplace facilitator” is of no legal
force or effect.
9 Minutes, House Taxation Committee, January 28, 2019 (“[I]t is the Kansas Department of Revenue’s
position under the Wayfair decision that any remote retailer selling into the state of Kansas is required to
collect and remit sales tax.”).

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delegated to it by the Legislature and thus are a legally insufficient basis to begin requiring
collection and remittance of retail sales or compensating use taxes by out-of-state
retailers with no physical presence in the State. 10 By expressly approving in Wayfair the
South Dakota “safe harbor,” the Supreme Court has provided a categorical standard the
Department may be able to adopt for enforcing the duty in K.S.A. 79-3702(h)(1)(F) for
out-of-state retailers 11 with contacts with Kansas that exceed the safe harbor thresholds
to collect and remit, but the Department has not done so. For out-of-state retailers with
sales less than the safe harbor thresholds approved in Wayfair, the Department may
enforce the duty to collect and remit only if a case-by-case analysis determines that facts
support both the existence of a substantial nexus and the absence of an undue burden
on commerce. We think the categorical rule as implied in the Notice, and as described
more expressly by other comments of the Department, that K.S.A. 79-3702(h)(1)(F)
requires all out-of-state retailers collect and remit is inconsistent with Wayfair, has not
been lawfully adopted and is invalid.
In accordance with the doctrine of constitutional avoidance employed by the courts, we
decline to answer your remaining question on constitutionality because the issue is
resolved on a nonconstitutional basis. 12
We believe some background will be helpful to the understanding of the issues.
Background
U.S. Supreme Court Decision in South Dakota v. Wayfair
Under the Due Process Clause of the Fourteenth Amendment to the United States
Constitution, no state shall “deprive any person of life, liberty, or property, without due
process of law. . . .”13 	In the context of taxation, due process requires some minimum
contact or nexus between the state and the business, person, property or transaction it
seeks to tax. 14 It is well-settled that a business need not have a physical presence in a
state to satisfy the demands of due process. 15
Separate and distinct from the Due Process Clause, the Commerce Clause of the
Constitution gives Congress the enumerated power “[t]o regulate commerce . . . among
the several States. . . .” 16 	The Constitution does not explicitly limit the several States’
10 Out-of-state retailers with a physical presence in Kansas remain obligated to collect and remit sales tax
by separate statutory provisions. See K.S.A. 79-3702(h)(1)(A)-(E).
11 For clarity of expression, unless the context indicates otherwise, this opinion uses the phrase “out-of-
state retailer” to mean an out-of-state retailer with no physical presence in Kansas.
12 See Ashwander v. TVA, 297 U.S. 288, 345-48 (1936); State ex rel. Schmidt v. City of Wichita, 303 Kan.
650, 658 (2016).
13 U.S. Const., Amend. XIV.
14 Miller Bros. Co. v. State of Md., 347 U.S. 340, 345 (1954).
15 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985).
16 U.S. Const., Art. I, § 8, cl. 3.

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power to interfere with interstate commerce; however, the United States Supreme Court
has construed the Commerce Clause to imply a restraint on state action that discriminates
against or excessively burdens interstate commerce.17 	This often is referred to as the
Dormant Commerce Clause. 	Applying that principle to a state’s taxation of an out-of-
state business, the Supreme Court in Complete Auto Transit v. Brady held that a state
may only impose a duty to collect and remit on an interstate business when: 1) the activity
taxed has a substantial nexus to the taxing state; 2) the tax is fairly apportioned; 3) the
tax does not discriminate against interstate commerce; and 4) the tax is fairly related to
the services the state provides the taxpayer. 18 In a line of cases known as Bellas Hess19
and Quill, 20 the Supreme Court had held that Complete Auto’s first prong – the Commerce
Clause requirement for a “substantial nexus” – was satisfied only when the out-of-state
business subject to a duty to collect and remit had a “physical presence” in the taxing
state. In Wayfair, the Supreme Court overruled the “physical presence” line of cases. But
importantly, Wayfair did not overrule the underlying requirement that a substantial nexus
must exist before a state may compel an out-of-state retailer to collect and remit tax.
Thus, Wayfair does not stand for the proposition that states are free to impose a duty to
collect and remit without limitation by the Commerce Clause on any out-of-state retailer
who may conduct a retail sale in Kansas, and the Department’s assertions that Wayfair
“removed any constitutional impediment to the enforcement of the tax collection statute”
find no support in Wayfair itself. 21 Nor does the Department’s assertion that “[u]nder
Wayfair, nexus determinations for sales tax are primarily controlled by the Due Process
Clause of the U.S. Constitution.” 22 Quite to the contrary, the Supreme Court in Wayfair
recognized that “some other principle in the Court’s Commerce Clause doctrine might
invalidate” 23 state efforts to impose a duty to collect and remit on out-of-state retailers and
remanded the case for lower courts to further consider any remaining constitutional
issues. 24 The Supreme Court’s case law interpreting the Commerce Clause continues to
17 See West Lynn Creamery, Inc. v. Healy, 512 U.S 186 (1994).
18 430 U.S. 274, 279 (1977). The Court noted that the second and third parts of the analysis, requiring fair
apportionment and nondiscrimination, prohibit taxes that pass an unfair share of the tax burden onto
interstate commerce. The first and fourth prongs, which require a substantial nexus and a relationship
between the tax and state-provided services, limit the reach of state taxing authority so as to ensure that
state taxation does not unduly burden interstate commerce. See Quill Corp. v. North Dakota, 504 U.S. 298,
313 (1992).
19 National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967).
20 Quill Corp. v. North Dakota, 504 U. S. 298 (1992).
21 The Department made this assertion in a letter from Mark A. Burghart, Secretary of Revenue, to Athena
E. Andaya, Deputy Attorney General, dated September 4, 2019 (“Burghart Letter”), at p. 2. The Department
repeated this assertion in a Memorandum from Mark A. Burghart, Secretary of Revenue, to the Governor’s
Council on Tax Reform dated September 25, 2019 (“Burghart Memorandum”), at p.2.
22 Burghart Letter at p. 7; Burghart Memorandum at p. 5. We acknowledge the possibility that courts
eventually may merge the Due Process and Commerce Clause analyses post-Wayfair, but at this time the
courts have not done so, and it is similarly possible the two requirements will remain doctrinally and
analytically distinct.
23 Wayfair, 585 U.S. ____, 138 S.Ct. at 2099 (emphasis added).
24 On October 31, 2018, the State of South Dakota entered into a settlement agreement and stipulation of
dismissal resolving all issues that had remained in Wayfair. Press Release, Office of South Dakota

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require that Kansas demonstrate a retailer has a “substantial nexus” 25 with the state and
that the collection and remittance of Kansas compensating tax would not impose an
“undue burden” 26 on an out-of-state retailer.
Although it did not decide how those remaining tests are to be applied, the Supreme Court
in Wayfair did provide guidance that must be considered in assessing whether a state
statute may offend the Commerce Clause. First, in observing that the out-of-state
retailers’ nexus with South Dakota was “clearly sufficient,” the Supreme Court found
relevant the “quantity of business” the companies conducted in the state and the fact that
the 	retailers 	are 	“large, 	national 	companies” 	that 	“maintain 	an 	extensive 	virtual
presence.” 27
Second, the U.S. Supreme Court observed, without deciding, that the South Dakota tax
system at issue was designed to prevent “undue burdens upon interstate commerce.”
Relevant to that observation was the South Dakota law’s “safe harbor” 28 that imposes the
duty to collect and remit only on retailers that annually (1) deliver into the state more than
$100,000 of goods or services or (2) engage in 200 or more separate transactions for the
delivery of goods or services into the state.29
Thus, while Wayfair did not expressly hold that a statutory “safe harbor” based on value
of goods or services sold or number of transactions is required by the Commerce Clause,
the Court did rely upon the existence of such a safe harbor in South Dakota’s statute as
persuasive evidence that the statute was “clearly sufficient.” It is reasonable to conclude
that post-Wayfair, out-of-state retailers whose contacts with a taxing state exceed those
approved safe harbor limits may be subject categorically to a duty to collect and remit
without offending the Commerce Clause. Similarly, it is reasonable to conclude that the
likelihood a state offends the Commerce Clause by imposing a duty to collect and remit
on an out-of-state retailer increases the further the retailer’s contacts with the taxing state
depart below the “clearly” sufficient safe harbor thresholds. For example, imposing a
collect-and-remit duty on an out-of-state retailer with 199 annual transactions delivering
$99,000 worth of goods and services into the taxing state is unlikely to offend the
Commerce Clause but the same cannot reasonably be inferred from Wayfair about
Governor, Oct. 31, 2018. https://news.sd.gov/newsitem.aspx?id=23939 (accessed August 31, 2019). The
settlement agreement precluded judicial determination of the open constitutional questions around what
constitutes “substantial nexus.”
25 Wayfair, 138 S.Ct. at 2099.
26 Id.
27 Id.
28 Id. Notably, the five-justice majority in Wayfair did not decide whether a lesser safe harbor, or no safe
harbor at all, would offend the Constitution while the four dissenters criticize the majority for “breezily
disregard[ing] the costs” that even the South Dakota safe harbor will impose on retailers because “[t]he
burden will fall disproportionately on small businesses.” Wayfair, 138 S.Ct. at 2103-04 (Roberts, CJ,
dissenting).
29 Id. The Supreme Court also found relevant that, like Kansas, South Dakota did not impose the duty to
collect and remit taxes on out-of-state retailers retroactively and participates in the Streamlined Sales and
Use Tax Agreement that reduces administrative and compliance costs on out-of-state retailers.

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imposing the duty on a retailer with only a single annual transaction delivering $10 worth
of goods and services into the state. Whether there is a categorical bright line that the
Commerce Clause permits to be drawn somewhere between those extremes – in other
words, whether a lesser or different safe harbor than that approved by the Supreme Court
in Wayfair is constitutionally permissible – remains an open question.
Kansas Sales Tax Law
Under Kansas law, the burden of collecting the retail sales tax and remitting the revenue
to the taxing authority, unless exempted,30 is borne by the retailer.31
Kansas adopted a compensating use tax to permit the State to impose a tax on the in-
state consumer or user for the use, storage, or other consumption in the state of tangible
personal property not subject to the sales tax. The taxing scheme is structured to require
that a compensating use tax be levied 32 and then paid by the consumer or user to the
retailer. If it is not collected by the retailer, then the consumer or user is required to file a
tax return and pay the compensating use tax directly to the State. 33 Kansas has attempted
to impose the requirement to collect and remit the compensating use tax on the out-of-
state retailer to increase the effectiveness of the tax,34 but that attempt is subject to the
same constitutional restrictions that apply to imposing the requirement to collect and remit
sales tax on out-of-state retailers.
Notably, the Legislature has not enacted any statute that on its face necessarily attempts
to require imposition of the collection of the sales or use tax on all out-of-state retailers.
Rather, the Legislature enacted K.S.A. 79-3702(h)(1)(F), upon which the Department now
relies. That statute provides that, under the Kansas Compensating Tax Act, 35 the duty to
collect and remit the tax applies to “any retailer who has any other contact with this state
that would allow this state to require the retailer to collect and remit under the provisions
of the constitution and laws of the United States.”36
On its face, that statutory provision grants to the Department authority to impose the
obligations to collect and remit only to the extent the U.S. Constitution permits application
of the Kansas Compensating Tax Act to out-of-state retailers. But the statute establishes
no standard for determining which out-of-state retailers those are. Prior to Wayfair, the
constitutional standard – and thus the scope of K.S.A. 79-3702(h)(1)(F) – had been
definitively provided by Supreme Court case law; the statute did not impose a duty on
retailers that lacked a physical presence in Kansas because doing so would be
unconstitutional. As discussed above, by overruling the physical presence requirement,
30 K.S.A. 79-3606.
31 K.S.A. 79-3603; 79-3608.
32 K.S.A. 79-3703.
33 K.S.A. 79-3705a. K.S.A. 79-3705c imposes the corresponding requirement on the retailer doing business
in this state to collect the compensating use tax from consumers and users.
34 See K.S.A. 79-3702(h)(1); 79-3705c.
35 K.S.A. 79-3701 et seq.
36 K.S.A. 79-3702(h)(1)(F) (emphasis added). See also K.S.A. 79-3705c.

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Wayfair 	enlarged 	the 	universe 	of 	out-of-state 	retailers 	to 	which 	Kansas 	may
constitutionally apply its taxing power, but Wayfair did not eliminate all limitations imposed
by the Commerce Clause. Rather, Kansas remains limited at least by the requirements
that a retailer have a “substantial nexus” with Kansas and that imposing a duty to collect
and remit Kansas tax on an out-of-state retailer not cause an “undue burden” on interstate
commerce. We also know, as discussed above, the Supreme Court in its Commerce
Clause analysis found relevant the “safe harbor” that was present in the South Dakota
statute but is absent from the Kansas statute and from the enforcement policy announced
in Notice 19-04. Whatever the Constitution may say about retailers below the safe harbor
thresholds, the Supreme Court made clear that as a categorical rule the Commerce
Clause is not offended by states imposing a duty to collect and remit on out-of-state
retailers whose contacts with the taxing state exceed the safe harbor thresholds approved
as “clearly sufficient” in Wayfair.
Kansas Administrative Law
Because K.S.A. 79-3702(h)(1)(F) tethers the scope of the Kansas statute to “the
provisions of the constitution . . . of the United States,” it is necessary to interpret the U.S.
Constitution in order to know the meaning of the state statute. 37 Ordinarily, we rely on
courts for definitive interpretations of the U.S. Constitution. But we have found no post-
Wayfair cases in Kansas or elsewhere that determine whether Wayfair allows a state to
eliminate all safe harbor provisions or to establish lesser or different safe harbor
thresholds than those approved in Wayfair without running afoul of the Commerce
Clause. We suspect this is because few states other than Kansas have attempted to do
so; rather, most other states have adopted a safe harbor modeled generally on what the
Supreme Court approved in Wayfair. 38 We did, however, find one other state’s appellate
court, when confronted with a similar issue, avoided the constitutional question by
interpreting a statute nearly identical to K.S.A. 79-3702(h)(1)(F) to not extend the state’s
authority to tax to encompass all out-of-state retailers.39 That underscores that both
statutory and constitutional interpretation are necessary post-Wayfair to determine the
scope of a state’s authority to impose duties to collect and remit on out-of-state retailers.
Absent judicial determination to the contrary, acts of the Legislature are presumed to be
constitutional, 40 and when two or more constructions of a statute are possible, but one
would offend the Constitution while another would not, Kansas courts will avoid the
interpretation that leads to unconstitutional results. 41 This well-established principle
37 The Department’s assertion that post-Wayfair “[t]here is nothing more to be added or interpreted
statutorily or constitutionally” is incorrect. Burghart Letter at p. 12; Burghart Memorandum at p. 9.
38 See Kansas Only State Making Small Businesses Pay Remote Sales Tax, Bloomberg Tax, Aug. 1, 2019
(available 	at 	https://news.bloombergtax.com/daily-tax-report-state/kansas-only-state-making-small-
businesses-pay-remote-sales-tax) (accessed September 21, 2019).
39 See Alabama Department of Revenue v. Scholastic Book Clubs, Inc., __ So.3d __, 2018 WL 4266694
(Sept. 7, 2018).
40 Hilburn v. Enerpipe Ltd., ___ Kan. ___, 442 P.3d 509, 528 (2019).
41 See Dillon Real Estate Co., Inc. v. City of Topeka, 284 Kan. 662, 669 (2007).

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logically flows from the oath each legislator takes to uphold the U.S. Constitution 42 in
carrying out the fundamental purpose of the Legislature, which is to exercise the
legislative power of this state. 43 In each statutory enactment, the Legislature must “reach
its own independent conclusion . . . regarding the constitutionality of a statute.”44 In this
case, the Legislature has enacted no post-Wayfair law providing fresh guidance on its
assessment of the scope of K.S.A. 79-3702(h)(1)(F).45
When neither the courts nor the Legislature has provided clear instruction on how statutes
are to be interpreted, it may by necessity fall to an administrative agency to determine
how the agency is to administer the statute. But in doing so, administrative agencies have
only such power as is delegated to them by the Legislature within “a broad outline” that
then “authorize[s] the administrative agency to fill in the details.” 46 When the Legislature
delegates the administrative power to administer a law, the scope of that delegation is
limited “based on the standards included in the delegation.” 47 In the past, Kansas courts
have afforded deference to the statutory interpretations of administrative agencies, but
the Kansas Supreme Court more recently has made quite clear that our courts no longer
do so. 48 Moreover, and pertinent here, it is well-established that Kansas administrative
agencies “may not rule on constitutional questions,” 49 although courts typically have made
that observation in the context of controversies involving agencies’ adjudicative function
and it is not entirely clear how the principle applies to an agency exercising rule and
regulation authority.
Courts generally construe statutes, including those delegating authority to administrative
agencies, in a manner to “avoid doubtful constitutional questions” because “it is to be
presumed that state laws will be construed in that way by the state courts.”50 In applying
that principle, the Kansas Supreme Court has consistently explained that “[i]f there is any
reasonable way to construe [a] statute as constitutionally valid, th[e] court has the
authority and duty to do so.”51 Of course, permitting a Department interpretation or
application of K.S.A. 79-3702(h)(1)(F) that offends the Constitution would have the effect
of invalidating the statute itself as applied by the Department interpretation; thus, it seems
42 See K.S.A. 54-106.
43 Kan.Const., Art.2, § 1.
44 State ex rel. Morrison v. Sebelius, 285 Kan. 875, 899 (2008).
45 During its 2019 session, the Legislature twice approved and sent to the Governor legislation that included
adopting a “safe harbor” similar to that in South Dakota’s statutes. Both were vetoed and neither became
law. See 2019 SB 22 and 2019 HB 2033.
46 Citizens’ Util. Ratepayer Bd. v. State Corp. Com’n of State of Kan., 264 Kan. 363, 401 (1998) (quotation
marks and citation omitted).
47 State ex rel. Tomasic v. Unified Government of Wyandotte County/Kansas City, Kan., 264 Kan. 293, 303-
04 (1998).
48 Douglas v. Ad Astra Info. Sys., L.L.C., 296 Kan. 552, 559 (2013) (“To be crystal clear, we unequivocally
declare here that the doctrine of operative construction . . . has been abandoned, abrogated, disallowed,
disapproved, ousted, overruled, and permanently relegated to the history books where it will never again
affect the outcome of an appeal.”).
49 Villa v. Kansas Health Policy Authority, 296 Kan. 315, 319-20 (2013).
50 Fox v. Washington, 236 U.S. 273, 277 (1915).
51 Hodes & Nauser, MDs, P.A. v. Schmidt, ___ Kan. ___, 440 P.3d 461, 499 (2019).

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to us likely that any court reviewing the Department’s actions would be reluctant to
embrace an agency interpretation of its authority under that statute that would present a
“doubtful constitutional question[ ]” as to Kansas’ exercise of its power to impose duties
on out-of-state retailers to collect and remit post-Wayfair. Put another way, we think given
the paucity of judicial interpretation of the Commerce Clause post-Wayfair, courts would
find suspect Department efforts to vigorously test constitutional limits by agency action
absent clear Legislative authority.
Issuance of Notice 19-04
Against the background above, the Department on August 1, 2019, issued Notice 19-04
“to provide guidance to remote sellers doing business in Kansas.” On the key material
matter at issue – the extent to which out-of-state retailers with no physical presence in
Kansas must comply with Kansas requirements to collect and remit – the Notice is
curiously ambiguous. It strongly implies that the Department intends to enforce the duty
against all out-of-state retailers, but it never says so expressly. Rather, it merely parrots
the tautological provision in K.S.A. 79-3702(h)(1)(F), which it rephrases as “Kansas
imposes its sales and use tax collection requirements to the fullest extent permitted by
law.” It then uses statements such as “Kansas can, and does, require on-line and other
remote sellers with no physical presence in Kansas to collect and remit” tax and “[r]emote
sellers who are not already registered with the Kansas Department of Revenue must” do
so. 52 But the Notice never squarely asserts that “all” out-of-state sellers must comply with
those duties, and to that extent it provides little useful guidance. 53
Analysis
Notice 19-04 is of No Legal Force or Effect
We are uncertain what statutory authority the Department intended to exercise in issuing
the Notice; the Notice itself does not cite any source of authority, and we are unable to
independently identify any statutory authority that authorizes the Department to establish
by Notice a standard54 for applying K.S.A. 79-3702(h)(1)(F) post-Wayfair by determining
what “the provisions of the constitution” would “allow this state to require” of out-of-state
retailers. 55
52 See Notice 19-04.
53 Although the Notice is ambiguous, the Department’s descriptions and advocacy for its new policy of
interpreting K.S.A. 79-3702(h)(1)(F) to make all out-of-state retailers subject to duties to collect and remit
has been explicit. See generally Burghart Letter; Burghart Memorandum.
54 In effect, the establishment of this standard is a legislative function. See generally Evelyn R. Sinaiko, Due
Process Rights of Participation in Administrative Rulemaking, 63 Cal.L.Rev.886 (1975); Id. at 893
(“Although legislatures may delegate to agencies the power to determine basic issues of policy within a
broad statutory framework, this does not mean that they may also delegate their immunity from procedural
requirements. While under traditional analysis procedural due process restrictions do not apply to
legislatures, the different characteristics of administrative agencies should compel a different result in the
administrative context.”).
55 K.S.A. 79-3702(h)(1)(F).

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While it is not entirely clear, we think K.S.A. 79-2974 is the statutory authority for the
Notice. That statute requires the Department to publish its “administrative rulings,” which
“shall include revenue notices, revenue rulings, information guides, policy directives,
private letter rulings, written final determinations of the secretary or the designee of the
secretary and directives of the division of property valuation or its director.”56 Notice 19-
04 appears on the Department’s website under the heading “Tax Notices” and is
published in the Kansas Register under “Notices.” 57 	In both places, the category is
distinguished from “Revenue Rulings.” 58 	Therefore, by the process of elimination the
Notice appears to be a “revenue notice” within the meaning of K.S.A. 79-2974. We have
found no other reference in the Kansas statutes or case law to any authority for the
Department to issue a “Tax Notice.”59
Revenue notices under K.S.A. 79-2974 have traditionally been used by the Department
merely to inform the public about actions taken by others that affect the rights and duties
of taxpayers, not as an instrument by which the Department itself takes such substantive
actions. 60 For example, the other notices that were published on the same day regard
statutory changes made by the Legislature during the 2019 legislative session that
affected the duty of taxpayers. 61 The only other notice published so far this year likewise
regards 2019 statutory amendments pertaining to duties of taxpayers. 62 	The same is
consistently true for notices published in recent prior years. 63 Unlike the other notices,
Notice 19-04 includes the statement that it “is intended to provide guidance” 64 and, as
56 K.S.A. 79-2974.
57 https://www.ksrevenue.org/prnewtaxnotices.html (accessed September 17, 2019); Kansas Register, Vol.
38, No. 33, p. 1017 (August 15, 2019).
58 See fn. 57. K.A.R. 92-19-58 defines revenue rulings.
59 Although the Secretary of Revenue is authorized under K.S.A. 79-3666 to “provide sellers with as much
advance notice as practicable of any rate changes, legislative change in the tax base and amendments to
sales and use tax rules and regulations,” the provision does not authorize Notice 19-04. Notice 19-04 does
not address any of these subjects.
60 Even notices that involve substantive action taken by the Department merely describe actions taken
based on separate authority granted to the Department; they do not purport themselves to be the source
of authority for the Department’s action. See, e.g., Notice 18-05 (extending filing date for 2017 corporate
income tax returns).
61 Notice 19-02 (exempt sales of gold or silver coins and palladium, platinum, gold, or silver bullion); Notice
19-03 (motors fuel update 2019 H.B. 2035).
62 Kansas Register, Vol. 38, No. 19, p. 491 (May 9, 2019) (Notice 19-01 (tax imposed on CMB by retail
liquor stores)).
63 See https://www.ksrevenue.org/prpriortaxnotices.html (accessed September 23, 2019) for notices issued
in calendar years 2013 through 2018.
64 The Rules and Regulations Filing Act, in both K.S.A. 77-415 and K.S.A. 77-438, authorizes agency
publication of certain “guidance” without otherwise complying with the procedures for adoption of rules and
regulations. But guidance documents “lack[ ] the force of law,” K.S.A. 77-438(a)(2)(B), and although an
agency may “provide guidance” to the public, “no such guidance or information may give rise to any legal
right or duty,” nor may it be “treated as authority for any standard, requirement or policy reflected therein.”
K.S.A. 77-415(b)(2)(D). Thus, the Notice cannot draw authority for interpreting the U.S. Constitution to
establish the standard required by K.S.A. 79-3702(h)(1)(F) nor for the Department’s proposed policy for
applying that statute post-Wayfair as guidance issued pursuant to the Rules and Regulations Filing Act.

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discussed above, it does not merely provide notice of substantive action taken either by
another entity or separately by the Department but instead declares how the Department
itself intends to interpret the U.S. Constitution and K.S.A. 79-3702(h)(1)(F) post-Wayfair
to establish a substantive standard that imposes a duty to collect and remit on all out-of-
state retailers. Nothing in K.S.A. 79-2974 provides authority for that sort of substantive
action by the Department to change the duties and responsibilities of taxpayers (much
less declare an agency’s own interpretation of the U.S. Constitution) through issuance of
a revenue notice.
In any event, the Department itself acknowledges that the Notice has no legal effect:
The Department did not change any agency policy by virtue of Notice 19-
04. . . . Rather, Notice 19-04 was issuing public notice of a change in the
existing state of the law that occurred completely outside of anything the
Department did, or any change of position or policy on the part of the
Department. . . . [T]he Department was providing information to the public
describing a statutory requirement that became the law after Wayfair. The
Department makes no claim that Notice 19-04 gives rise to any legal right
or duty or is itself authoritative. 65
We agree with the conclusion that the Notice itself is not authoritative but think the Notice
on its face in fact attempts to accomplish more than “issu[e] public notice of a change in
the existing state of the law”; rather, it also announces a change in the Department’s
interpretation of K.S.A. 79-3702(h)(1)(F) and a change in the Department’s policy for
enforcing that statute.
The Department’s New Policy for Enforcing K.S.A. 79-3702(h)(1)(F) Without a Safe
Harbor as Announced in the Notice is Inconsistent with Wayfair
By issuance of the Notice, the Department has in effect announced its intention to begin
enforcing K.S.A. 79-3702(h)(1)(F) on and after October 1, 2019, in a manner that requires
all out-of-state retailers with sales in Kansas to collect and remit Kansas tax. We think
that exceeds the authority the Legislature has granted the Department under that statute.
K.S.A. 79-3702(h)(1)(F) grants the Department authority to require out-of-state retailers
with no physical presence in Kansas to collect and remit only to the extent allowed “under
the provisions of the constitution . . . of the United States.” States’ authority “under the
provisions of the constitution” changed after Wayfair, but as discussed above, some
See also generally Brian Knight, Regulation by Guidance and Due Process: A Response by the Department
of 	Justice, 	The 	Bridge, 	George 	Mason 	University 	Mercatus 	Center, 	February 	8, 	2018,
https://www.mercatus.org/bridge/commentary/regulation-guidance-and-due-process-response
department-justice (accessed September 20, 2019) (discussing due process limitations on use of guidance
documents to effect substantive regulation).
65 Letter from Mark A. Burghart, Secretary of Revenue, to Athena E. Andaya, Deputy Attorney General,
dated September 4, 2019.

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Commerce Clause restrictions remain – namely, a requirement for “substantial nexus”
and an avoidance of “undue burden” on interstate commerce.
Thus, it is clear that post-Wayfair, K.S.A. 79-3702(h)(1)(F) applies to more out-of-state
retailers than it did before, but the Wayfair decision itself provides no reasonable basis to
conclude it applies without limitation to every out-of-state retailer that ever sells anything
into Kansas. Thus, K.S.A. 79-3702(h)(1)(F) still limits the Department’s authority to
require out-of-state retailers to collect and remit. The critical question post-Wayfair is:
what is the new statutory limit?
The Notice addresses that question by describing the Department’s new interpretation of
K.S.A. 79-3702(h)(1)(F) and explains how the Department intends to implement that
statute post-Wayfair. In the Notice, the Department announces it will assert a definition of
“remote seller,” a term not defined in state statute or elsewhere in rule and regulation.66
The Notice then announces the Department’s intention to begin “enforc[ing] the statutory
requirement to collect and remit on remote sellers for sales made into Kansas” on and
after October 1, 2019; asserts a requirement for remote sellers, who have not previously
been required to register in Kansas, to do so on and after October 1, 2019, and sets forth
a process for doing so; and asserts a requirement for remote sellers to collect and remit
sales and use tax.67 Importantly, as discussed above, the Department implies in the
Notice (and has expressly asserted in the Burghart Letter and the Burghart Memorandum)
that it interprets K.S.A. 79-3702(h)(1)(F) to authorize or require the Department to apply
these expanded duties categorically to all out-of-state retailers.
To the extent the Department may determine case-by-case that a particular out-of-state
retailer has “substantial nexus” with Kansas and may be required to collect and remit
without imposing an “undue burden,” we agree with the Department that K.S.A. 79-
3702(h)(1)(F) is a “self-executing statute” 68 that may be enforced in individual cases. This
case-by-case approach is analogous to the manner in which courts require analysis of
whether the Due Process Clause allows Kansas to assert through its long-arm statute
personal jurisdiction over a particular out-of-state resident. 69
But the Department’s proposal to determine categorically that all out-of-state retailers are
now required to collect and remit is quite different. The statute is not self-executing in the
categorical manner the Notice proposes because, as discussed above, the statute’s plain
terms do not disclose its scope post-Wayfair. Thus, the establishment of a category of
66 The Department’s regulations, which have not been altered to reflect the terminology in Notice 19-04, do
not use the term “remote seller,” but instead rely on the term “out-of-state retailer,” which may or may not
have the same meaning. See K.A.R. 92-19-61a(f); K.A.R. 92-20-7; see also fn.3.
67 Notice 19-04.
68 Burghart Letter at p. 14; Burghart Memorandum at 10.
69 See e.g., Volt Delta Resource, Inc. v. Devine, 241 Kan. 775, 777-80 (1987) (plaintiff has burden to show
existence of personal jurisdiction over particular defendant). The long-arm statute is another statutory
provision through which the Legislature attempts to tether a statute’s scope to the meaning of the U.S.
Constitution. See K.S.A. 60-308(b)(1)(L) and (b)(2).

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out-of-state retailers to whom the statute will be determined to apply post-Wayfair is at
the very least an act of administering the statute.70 The Legislature has authorized the
Department to administer the Compensating Use Tax Act – but only by adopting rules
and regulations. 71
Under the Rules and Regulations Filing Act, “‘[r]ule and regulation,’ ‘rule,’ and ‘regulation’
means a standard, requirement or other policy of general application that has the force
and effect of law, including amendments or revocations thereof, issued or adopted by a
state agency to implement or interpret legislation.” 72 Although the Department correctly
suggests the Notice “is not a regulation with the force of law,” we have no doubt the
Department’s 	new 	underlying 	policy 	of 	implementing 	or 	interpreting 	K.S.A. 	79-
3702(h)(1)(F) to apply categorically to all out-of-state retailers is intended to have the
force of law. Put another way, we find no reason to think the Department intends
compliance with its new interpretation of the statute to be optional for out-of-state retailers.
The Department’s new post-Wayfair policy of interpreting the scope of K.S.A. 79-
3702(h)(1)(F) constitutes a “requirement or other policy of general application” that has
“the force and effect of law” that is “issued” by the Department “to . . . interpret legislation,”
specifically K.S.A. 79-3702(h)(1)(F). Thus, the new policy is an exercise of the authority
granted by the Legislature to the Department to administer the Kansas Compensating
Tax Act by rule and regulation, and the new policy applying a duty to collect and remit
categorically to all out-of-state retailers may only be accomplished through a “rule and
regulation” that must comply with the Rules and Regulations Filing Act.
This conclusion is consistent with plain statutory language. The Legislature expressly
provided that the “secretary of revenue shall administer and enforce” the Kansas
Compensating Tax Act.73 The Legislature expressly provided how the secretary may
satisfy that duty to “administer” the statute: “The secretary shall adopt rules and
regulations for the administration of this act.”74 Nowhere in the Kansas Compensating
Tax Act did the Legislature provide other mechanisms, such as publication of a Notice or
adoption of a policy without any procedural requirements, by which the secretary is to
“administer” the statute, much less in the substantive manner contemplated by the new
policy described in Notice 19-04.
This conclusion also is consistent with Kansas case law. In Bruns v. Kansas State Bd. Of
Technical Professions, 75 the Kansas Supreme Court invalidated an internal agency policy
70 We assume, without deciding, that establishing categorical enforcement is an administrative act the
Department may accomplish by adopting rules and regulations. We note, however, it instead may be an
exercise of legislative power, and if so, generally may not be delegated by the Legislature to an
administrative agency.
71 K.S.A. 79-3707(a).
72 K.S.A. 77-415(c)(4).
73 K.S.A. 79-3707(a).
74 Id. (emphasis added).
75 255 Kan. 728 (1994).

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because it fell within the definition of “rule and regulation” but was not issued in
compliance 	with 	the 	rules 	and 	regulations 	filing 	act. 76 	And 	in 	American 	Trust
Administrators, Inc. v. Sebelius, 77 our Supreme Court invalidated a Department of
Insurance “bulletin,” similar to the “Notice” at issue here, that was issued without
complying with the procedures in the Rules and Regulations Filing Act because not even
“a widely distributed bulletin is a valid substitute for a properly promulgated rule or
regulation.” 78
Nor can use of the Notice, rather than adoption of a rule or regulation, be explained by
arguing that the tax statute itself, K.S.A. 79-3702(h)(1)(F), and not the Notice, imposes
the obligations on retailers and the Notice merely describes those obligations. First, an
identical argument was expressly rejected by the Kansas Supreme Court in American
Trust Administrators, Inc., because, like here, it was “clear the rule or regulation . . . will
govern how the [agency will proceed], not the statutes.”79 Second, contrary to the
Department’s public statements80 and the text of the Notice, the statute, as discussed
above, does not necessarily require all “remote sellers who are not already registered” to
“register and begin collecting and remitting Kansas sales and/or use tax.”81 Rather, the
statute imposes those obligations only on retailers who have “any . . . contact with this
state that would allow this state to require the retailer to collect and remit under the
provisions of the constitution . . . of the United States.”82
But the Notice neither provides analysis nor cites any authority for its implicit assertion
that the U.S. Constitution – and thus K.S.A. 79-3702(h)(1)(F) – allows Kansas to require
all out-of-state retailers to collect and remit Kansas compensating tax on all taxable
Kansas sales. 83 Of course, these concerns necessarily would have been addressed
through the statutorily required process by which rules and regulations are adopted, but
by 	avoiding 	those 	procedural 	requirements, 	the 	Department 	has 	prevented 	any
opportunity for public or other external analysis of whether the Department’s proposed
categorical standard for extending the duty to collect and remit to all out-of-state retailers
76 Id. at 733-34.
77 273 Kan. 694 (2002).
78 Id. at 704.
79 Id.
80 The director of research and analysis for the state Department of Revenue, is quoted by Bloomberg Tax
on August 1, 2019 as stating that “the department ‘does not believe it needs a de minimis threshold’ based
on its state law (K.S.A. 79-3702) defining retailers doing business in a state. ‘If the legislature wants to, they
can go ahead and put it in there, but based on the law we have, we believe we have the ability to collect
taxes on all transactions,’ [the director] said. For example, if a retailer had a single transaction for $10 to a
buyer in the state, that retailer would have to get licensed and remit sales taxes on that singular sale, she
said.” 	https://news.bloombergtax.com/daily-tax-report-state/kansas-only-state-making-small-businesses-
pay-remote-sales-tax (accessed September 16, 2019). See also, Burghart Letter; Burghart Memorandum.
81 Notice 19-04.
82 K.S.A. 79-3702(h)(1)(F) (emphasis added).
83 The Department cites no Kansas case law in the Notice, and we are aware of none that is pertinent.
Kansas case law interpreting “substantial nexus” is unhelpful because it is based on pre-Wayfair analysis.
See, e.g., In re Appeal of Intercard, Inc., 270 Kan. 346, 364 (2000) (applying “physical presence” analysis).

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post-Wayfair satisfies the “substantial nexus” and “undue burden” standards of the
Constitution. 84
Our conclusion is buttressed by the procedural history that led to issuance of the Notice.
The United States Supreme Court decided Wayfair on June 21, 2018; yet for 13 months
– until issuance of the Notice on August 1, 2019 – the Department did not seek to enforce
Kansas sales and compensating use tax laws against out-of-state sellers, even though it
now asserts the statute obligates it to do so. Instead, as discussed above, it provided
analysis and support to legislative attempts to create a “safe harbor.” Only after the
Legislature and the Governor failed to reach agreement on establishing a categorical
standard for determining “substantial nexus” and “undue burden” post-Wayfair – for
example, a safe harbor – in statute did the Department decide it would wait no longer and
instead declared its own categorical standard (with no safe harbor). But just as courts
may not “add vital omissions to a statute if the legislature failed to enact the change as
intended under any reasonable interpretation of the language used, regardless of the
legislature’s intention,” 85 so too with state agencies. The extent to which executive branch
agencies may adopt substantive standards that interpret the scope and meaning of
statutes is a power granted here to the Department by the Legislature, if at all, only
through exercise of rule and regulation authority.86
Our conclusion also is consistent with how the Department previously has exercised its
authority to apply the Kansas compensating use tax to out-of-state retailers. For example,
the Department previously adopted K.A.R. 92-20-7, which defines how out-of-state
retailers are to be deemed “to be doing business in this state” for purposes of collecting
and remitting compensating use taxes. Although that regulation, which remains in effect,
sets forth the manner in which the Department administers the compensating use tax as
applied to out-of-state retailers, it is silent on the meaning or application of K.S.A. 79-
3702(h)(1)(F).87
Because the Department’s new policy for interpreting and implementing K.S.A. 79-
3702(h)(1)(F) as reflected in the Notice and in the Burghart Letter and Burghart
Memorandum is a “rule and regulation” as defined by the Rules and Regulations Filing
Act, it must comply with the procedural requirements of that act, including being open for
public hearing and comment, 88 analysis by economic impact statement, review by the
director of the budget, approval by the secretary of administration and attorney general,
and filing with the secretary of state. 89 But neither the Notice nor any other publication by
84 We note that the Department has provided an after-the-fact explanation of its reasoning in adopting the
Notice. See Burghart Letter; Burghart Memorandum.
85 Fort Hays State University v. Fort Hays State University Chapter, American Assoc. of University
Professors, 290 Kan. 446, 464-65 (2010).
86 The Legislature has expressly delegated to the Secretary of Revenue rule and regulation authority to
administer the Kansas Compensating Tax Act. See K.S.A. 79-3707.
87 See K.A.R. 92-20-7(a).
88 K.S.A. 77-421.
89 K.S.A. 77-420.

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which the Department may have adopted its new policy implementing and interpreting the
statute complied with those procedures, and thus the Notice 	is “void” and “ha[s] no
force”90 and the new interpretation has not been lawfully adopted.
Conclusion
Following the U.S. Supreme Court’s decision in Wayfair that physical presence is not
required as demonstration of the “substantial nexus” required by the Commerce Clause,
it must be determined how the remaining Commerce Clause requirements of “substantial
nexus” and avoiding “undue burden” on interstate commerce apply to the legislative
command 	in 	K.S.A. 	79-3702(h)(1)(F) 	that 	the 	Department 	enforce 	the 	Kansas
Compensating Tax Act only as allowed by “the provisions of the constitution . . . of the
United States.” The Department’s assertions that the statute is “self-executing” 91 may well
be correct as applied to an individual out-of-state retailer, but are beside the point; the
pertinent issue is how to determine what the Constitution allows and, thus, how to interpret
the scope of the statute to apply to categories of out-of-state retailers as the Department
proposes. The Department’s further assertion that “[t]here is no constitutional requirement
that a collect and remit statutory provision contain a de minimis threshold for out-of-state
retailers” 92 finds no support in Wayfair, in any subsequent judicial decisions, in the text of
K.S.A. 79-3702(h)(1)(F), or in the unsuccessful attempts by the Legislature to enact post-
Wayfair legislation.
Absent 	judicial 	or 	legislative 	direction, 	the 	Department 	has 	no 	more 	authority 	in
administering and enforcing K.S.A. 79-3702(h)(1)(F) than what is delegated to it by the
Legislature. The only such delegation that might authorize substantive Department action
of the sort it has taken here – action that purports to interpret the U.S. Constitution for the
purpose of interpreting and declaring the scope of that statute post-Wayfair – is the
delegation to the Department’s secretary of the authority to “adopt rules and regulations
for the administration” of K.S.A. 79-3702(h)(1)(F).93 But the Department did not attempt
to exercise the rule-and-regulation authority the Legislature delegated to it, opting instead
merely to declare its categorical view that “Kansas can, and does, require on-line and
other remote sellers with no physical presence in Kansas to collect and remit”94 and that
“[t]here is no constitutional requirement that a collect and remit statutory provision contain
a de minimis threshold for out-of-state retailers.”95 Those extra-procedural declarations,
upon 	which 	the 	Department’s 	entire 	proposed 	new 	course 	for 	interpreting 	and
implementing the statute rests, seem to us “unreasonable, arbitrary or capricious.” 96
90 American Trust Administrators, Inc., 273 Kan. at 702-05.
91 Burghart Letter at p. 14; Burghart Memorandum at p. 10.
92 Id.
93 K.S.A. 79-3707(a).
94 Notice 19-04.
95 Burghart Letter at p. 14; Burghart Memorandum at p. 10.
96 See K.S.A. 77-621(c)(8).

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We need not and do not decide the ultimate question of the extent to which, post-Wayfair,
the Commerce Clause allows Kansas to impose on out-of-state retailers a duty to register
with the Department and to collect and remit sales and compensating use tax. Our role in
doing so would arise as part of the statutory rule-and-regulation procedure. We observe
here, however, that the Supreme Court has made at least this much clear:
1. 	imposing a duty to collect and remit on out-of-state retailers whose contacts
exceed the safe harbor thresholds approved in Wayfair seems categorically
permissible under the Commerce Clause; 97
2. 	imposing a duty to collect and remit on out-of-state retailers whose contacts fall
below or outside of the approved safe harbor thresholds may or may not be
permissible under the Commerce Clause. To determine whether Kansas may
enforce that duty against such a retailer requires an analysis of the “substantial
nexus” and “undue burden” tests as applied to the facts of each case; and
3. 	Wayfair cannot fairly be read to have eliminated all Commerce Clause limits on
Kansas’ authority to impose a duty to collect and remit on out-of-state retailers.
Thus, it is prudent to conclude that Kansas may not enforce that duty on out-of-
state retailers that have only de minimis contacts with Kansas. What constitutes
de minimis contacts has not been determined at this time.
The Department has chosen to draw a constitutional (and thus statutory) line that allows
imposing the duty to collect and remit on all out-of-state retailers. That is the most
extreme, and the least legally defensible, manner of proceeding. But whatever the merits
of the Department’s chosen path, the very act of deciding where that statutory line is to
be drawn – in other words, interpreting what the Constitution and thus what K.S.A. 79-
97 The Department dismisses the possibility it might have adopted the Wayfair-approved safe harbor
thresholds by rule and regulation as “arbitrarily applying a rule of its own devising not embodied in the
statute,” see Burghart Letter at p. 13, but that is not necessarily so. K.S.A. 79-3702(h)(1)(F) grants the
Department authority to impose a duty to collect and remit on “any retailer who has any other contact with
this state that would allow this state to require the retailer to collect and remit tax under the provisions of
the constitution and laws of the United States,” and the U.S. Supreme Court in Wayfair explained that
retailers that exceed the approved safe harbor thresholds categorically have contacts sufficient so as not
to offend the Commerce Clause, and the Legislature granted the Department authority to “adopt rules and
regulations for the administration” of K.S.A. 79-3702(h)(1)(F). See K.S.A. 79-3707(a). We think that, unlike
the Department’s attempt to require all out-of-state retailers to collect and remit, there would be nothing
“arbitrar[y]” about the Department properly adopting a rule or regulation that “administ[ers]” K.S.A. 79-
3702(h)(1)(F) by incorporating the Wayfair safe harbor thresholds that the Supreme Court has expressly
recognized satisfy “the provisions of the constitution . . . of the United States;” to the contrary, by reading
K.S.A. 79-3702(h)(1)(F) together with K.S.A. 79-3707(a), it appears the Legislature has specifically
authorized the Department to do so. Notably, that is what occurred in California, where the California
Department of Tax and Fee Administration administratively adopted the Wayfair safe harbor thresholds,
and the California Legislature later superseded those thresholds by statute. See California establishes
revised economic nexus standard, Grant Thornton Tax Services Alert (May 15, 2019) (available at
https://www.grantthornton.com/library/alerts/tax/2019/SALT/A-E/CA-establishes-revised-economic-nexus-
standard-05-15.aspx) (accessed September 29, 2019).

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3702(h)(1)(F) allow post-Wayfair – is an exercise in adopting a policy that sets a standard
for implementation and enforcement of the law. The Legislature has required that if the
Department sets such a standard, it do so by adopting rules and regulations. But the
Department chose a different course that finds no authority in statute. Because the
Department has not lawfully adopted such a standard, nor has any Kansas court or the
Legislature adopted such a standard, no such standard defining the scope of K.S.A. 79-
3702(h)(1)(F) exists nor can any be reasonably discerned (other than perhaps the safe
harbor approved by the Supreme Court in Wayfair or on the facts of individual cases).
The Notice does not describe a valid exercise by the Department of any authority
delegated to it by the Legislature to administer and enforce K.S.A. 79-3702(h)(1)(F) and
neither the Notice nor the Department’s new policy of interpreting that statute is of any
force or legal effect.
Sincerely,
Derek Schmidt
Kansas Attorney General
Athena E. Andaya
Deputy Attorney General
Richard D. Smith
Assistant Attorney General
DS:AEA:RDS:sb