Kansas City, MO Business License: Gross Receipts, Earnings Tax and Registration

Kansas City, MO Business License: Gross Receipts, Earnings Tax and Registration

If you're starting a business in Kansas City, Missouri, you need a Kansas City business license. This is separate from any state-level requirements. While Missouri has no statewide business license, Kansas City (KCMO) requires local registration and charges an annual license tax based on your prior-year gross receipts. This guide walks you through registration, renewal, and the tax calculations you'll face.

Why Kansas City Has Its Own License Requirement

Missouri has no general state business license. However, Kansas City operates its own licensing system to register and tax local businesses. Your KCMO business license is distinct from your Employer Identification Number (EIN) or any state tax registration. You must handle both: Missouri state taxes and Kansas City local requirements.

Note: If your business is in Kansas-side Kansas City (KCK), you follow Kansas city rules, not Missouri's. This guide covers Missouri-side Kansas City only.

Before You Register: Zoning Clearance

Before you register for your Kansas City business license, get zoning clearance. The city requires this first. Visit the KC Planning and Development Department or apply online through the city's permitting system. They will confirm your proposed location is zoned for your business type. Without zoning clearance, the Revenue Division will not process your license application.

Step 1: Register with Kansas City Revenue Division (Form RD-100)

You have 60 days from the date you open to register. Complete the Registration Statement for Business License (Form RD-100) and file it with the Kansas City Revenue Division. This form asks for:

  • Your business name and structure (sole proprietorship, LLC, corporation, etc.)
  • Business address and mailing address
  • Your Social Security Number or EIN
  • Type of business and industry classification
  • Ownership information
  • Opening date

File in person at the Kansas City Revenue Division, by mail, or through the city's online portal if available. Processing typically takes a few days to a week.

Step 2: Submit Your License Tax Estimate (Form RD-105)

Along with or immediately after your RD-100, submit the Estimated License Tax Statement (Form RD-105). This form forecasts your first-year gross receipts. The city uses this to calculate your initial license tax and set your renewal obligations. Be realistic: if you underestimate, the city can bill you for the difference.

If you don't know your exact income yet, estimate conservatively based on your business plan.

Understanding the Kansas City License Tax

The Kansas City business license tax is not a simple flat fee. It is calculated on your prior-year gross receipts and varies by business type.

Minimum Tax

The minimum license tax is $25 for any business with up to $28,000 in prior-year gross receipts. If you gross less than $28,000, you still pay $25.

Graduated Tax Rates

Above $28,000, your tax is graduated. The city uses two tables:

  • Table A: Retail sales, wholesale, and service businesses
  • Table B: Manufacturing and construction

Each table has different rates at different revenue thresholds. Exact rates should be confirmed with the Revenue Division when you file, as they can change year to year. Do not assume rates from a previous year apply to the current year.

To find your correct rate, ask the Revenue Division directly or check their published rate schedules on the Revenue Division website.

Your Kansas City License is Valid for One Calendar Year

Once issued, your Kansas City business license is valid through December 31 of that calendar year. Your license expires at year-end, even if you just opened in November. Plan accordingly when budgeting for license costs.

Step 3: Renew Your License by the Last Day of February

To keep your license active, renew it by the last day of February each year. If you renew on time, you pay only the license tax owed. If you renew late, penalties begin March 1.

The renewal process is straightforward: file a new license tax calculation based on your prior calendar-year gross receipts. If your gross receipts increased, your tax may increase. If they declined, your tax decreases (but not below the $25 minimum).

File your renewal as soon as you close your books for the prior year. Don't wait until the last week of February.

The Kansas City Earnings Tax (1% on Profits)

In addition to the license tax, Kansas City imposes a 1% earnings or profits tax on business income earned within the city. This applies to your net profit after expenses, not gross receipts.

The earnings tax is filed on Form RD-108 and is due April 15 each year. This tax was renewed by Kansas City voters on April 7, 2026, so it remains in effect.

How the earnings tax works:

  • Calculate your net profit for the year (income minus allowable business expenses)
  • Apply the 1% rate to that net profit
  • If you are a pass-through entity (sole proprietorship, LLC, S-corp), owners report and pay their share of KC earnings tax on their personal tax return or business return
  • If you are a C-corporation, the corporation pays the tax

Keep meticulous records of your expenses so you can deduct them properly when calculating your net profit. Many business owners overlook deductions and overpay this tax.

Sales Tax: State and Local Rates

If your business sells tangible goods or taxable services, you must charge sales tax. Missouri's state sales tax rate is 4.225%. Kansas City adds a local sales tax on top of this. The combined rate in Kansas City is higher than the state rate alone.

To find the exact combined sales tax rate for your Kansas City location, visit the Missouri Department of Revenue or use their sales tax rate finder. Rates can vary by neighborhood in Kansas City if there are special districts, so confirm the rate for your exact address.

You must register for a sales tax license with the Missouri Department of Revenue before you start making taxable sales. This is separate from your Kansas City business license. After you register, you'll collect sales tax from customers and remit it to Missouri, which distributes the local portion to Kansas City.

Health Department Permits and Other Licenses

Depending on your business type, you may need additional permits:

  • Food service, restaurants, or food manufacturing: Health permit from the Kansas City Health Department
  • Childcare: State license from the Missouri DESE Office of Childhood
  • Liquor sales: City liquor license from the Kansas City Regulated Industries Division, plus a state license from the Division of Alcohol and Tobacco Control
  • Barber, cosmetology, or other regulated professions: State license from Missouri

The Kansas City BizCare office can point you to specific license requirements for your industry. Contact them for a quick consultation.

Materials You'll Need to Register

  • Completed Form RD-100 (Registration Statement)
  • Completed Form RD-105 (Estimated License Tax Statement)
  • Proof of zoning clearance from KC Planning and Development
  • Your Social Security Number or Employer Identification Number (EIN)
  • Business address and mailing address
  • Proof of ownership (articles of organization, articles of incorporation, or sole proprietorship documentation)

Tips to Avoid Common Mistakes

  • Don't skip zoning clearance. The Revenue Division will reject your application if you haven't confirmed zoning first. Get this in writing from Planning and Development.
  • Register within 60 days. Late registration incurs penalties and interest. Mark your calendar now.
  • Renew by the last day of February, not March 1. Penalties start March 1. Submit early.
  • Report accurate gross receipts. If you later amend your gross receipts for a prior year, the city may adjust your license tax and assess penalties. Be honest on your first filing.
  • Track expenses for the earnings tax. Many owners pay more than they owe because they miss deductible expenses. Keep organized records from day one.
  • Don't confuse the license tax with the earnings tax. These are two separate taxes. The license tax is on gross receipts; the earnings tax is on net profit. You owe both.
  • Remember the $25 minimum. Even if you make almost no income, you pay at least $25 in license tax. Budget for this if you anticipate a slow start.

Expected Timeline

Here's roughly what to expect:

  • Before opening: Get zoning clearance (1 to 2 weeks, depending on processing).
  • Opening date: File RD-100 and RD-105 within 60 days.
  • Within 1 week: Receive your license tax calculation and business license (if approved).
  • Before your first taxable sale: Register for a Missouri sales tax license with the Department of Revenue.
  • April 15 of the following year: File your earnings tax return (Form RD-108).
  • By the last day of February of the following year: Renew your license by filing updated gross receipts and paying the new license tax.

Important Disclaimer

This article is informational only and does not constitute legal or tax advice. Kansas City business licensing, tax codes, and forms can change. Rules differ by business structure and industry. Before you file, confirm current requirements and rates with the Kansas City Revenue Division, the Missouri Department of Revenue, or a qualified attorney or CPA. Tax and legal rules are complex; professional guidance is worth the cost to avoid costly mistakes later.

Where to Get Help

Keep exploring: related Missouri guides