Understand Local Tax Standards
What are tax requirements?
Businesses operating in Kansas City are subject to a number of tax obligations and other requirements at the city, county, state, and federal levels.
Why do I need to learn about taxes?
By knowing beforehand which tax obligations and other governmental requirements are necessary for your business to operate, you can plan in advance to ensure that your business meets these obligations.
How can I be sure I am meeting local tax requirements?
The KCMO Department of Revenue has developed Tax Guides for specific industries.
City Tax Regulations
The Revenue Division administers several taxes and licenses, including:
- Earnings Tax (for individuals and businesses)
- Business License (for businesses only)
- Arena Fee (for hotels/motels and rental car businesses)
- Convention and Tourism Tax (food service businesses and hotels/motels)
- Special Assessments
- Utility Taxes and Cable Franchise Fees
- Withholdings (for local employees; this differs from state withholdings)
You should file returns in accordance with the schedule for each tax type.
Obtain a Missouri Sales Tax and/or Withholding Tax License
What are Missouri Sales Tax and Withholding Tax Licenses?
A Missouri Sales Tax is a free license required for all retail and food businesses in Missouri. A Withholding Tax License is a free license required for all businesses with employees in Missouri.
Why do I need to learn about these tax licenses?
If your business is making sales of tangible personal property or taxable services (including telephone services and fees paid into places of amusement including but not limited to yoga and fitness centers), you must obtain the Sales Tax license.
You should obtain a Withholding Tax license if your business is responsible for filing and paying corporate and/or franchise tax or if it has employees and is required to remit withholding tax.
- Employees are wager earners who receive a W-2.
- Owner's draw and individuals who receive 1099s are not considered employees.
Businesses selling batteries and/or new tires should also register to collect taxes and remit to the Missouri Department of Revenue. There are separate required licenses for any business wanting to operate as a motor fuel supplier, permissive supplier, distributor, and terminal operator or transporter, and for any business wanting to operate as a cigarette or other tobacco product wholesaler.
How do I obtain these tax licenses?
Register with the Missouri Department of Revenue. You will need a Missouri Tax ID before you obtain a business license. After you have completed your online registration, you will receive a confirmation number and additional information about your registration. Keep the confirmation number for your records. Allow 2-3 business days for processing.
Note: A Missouri Tax ID may also be referred to as
- Sales Tax
- Vendor’s Use Tax
- Consumer’s Use Tax
- Withholding Tax
- Unemployment Tax
- Tire and Lead Acid Battery Fee
- Corporate Income Tax