Construction businesses must be registered and licensed to do business in Kansas City, Missouri. The first step is to submit a Registration Application (Form RD-100).
Form RD-100 can be submitted electronically on Quick Tax or in person to the Business License Office at City Hall, 1st floor, 414 E. 12th St., Kansas City, Missouri 64106. A Zoning Clearance is required for a construction business located in Kansas City, Missouri.
Construction businesses with more than five employees must also submit a Workers' Compensation Certificate of Insurance from their insurance company with Form RD-100. Construction businesses with five or less employees are exempt from this requirement and must instead submit Form RD-WC.
Once the application is processed, the appropriate tax accounts will be created and you will receive a notice listing your account numbers to reference on returns you file and when communicating with the Revenue Division.
Before you can get a building permit to begin your project you must get a business license. You also need a business license prior to being awarded a bid for a City project.
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To obtain a license, new businesses are required to file
Form RD-105 no more than 60 days after opening in Kansas City, Missouri. A business license must be renewed each year by filing
Form RD-105 prior to March 1. The cost of a license is determined by the amount of gross receipts from the prior calendar year using rate Table B included with the form.
Tips
- Gross receipts are the total amount of revenue from contracts for all work performed in Kansas City, Missouri.
- Construction businesses may deduct from gross receipts amounts paid to sub-contractors licensed by the City of Kansas City, Missouri (see section 40-79 of the Code of Ordinances).
It is strongly recommended that contractors verify that sub-contractors are licensed by the City to avoid becoming liable for extra amounts owed if sub-contractors are found not to be licensed.
Resources
Code of Ordinances,
Chapter 40, Article IForm RD-108/ 108B is a tax return filed annually and is used to pay the 1% earnings tax on the net profits of a business. The return is due by April 15 of each year and is required even if there is a loss. If you file income taxes on a fiscal year basis, the return is due 105 days from the end of your fiscal year.
Extensions of time to file may be requested by submitting Form RD-111. Extension requests are granted to provide an additional six months to file. They are not an extension of time to pay the tax due. A payment of at least 90% of the tax due must be submitted with Form RD-111 to avoid penalty and interest. This request is separate from an extension request submitted to the IRS for federal income tax purposes and should be sent directly to the Revenue Division. The IRS does not send this information to municipalities.
Tips
- Short-term contracts (contracts completed in a single tax year) and all other earned income are apportioned using the regular three-factor formula of property, payroll and gross receipts found in section 1.384 (a)(1) of the Earnings and Profits Tax Regulations (page 39).
- For long-term contracts (contracts that span multiple tax years), construction businesses may use one of two methods to determine the portion of each contract to included on Form RD-108/ 108B.
- Percentage of Completion Method
The portion of the gross contract amount from each contract is included based on the percentage of the project completed at the end of each tax year. See section 1.384 (a)(2)(H)(ii)(I) of the Earnings and Profits Tax Regulations (page 63) for an example.
- Completed Contract Method
Each contract's gross amount is included in the same tax year in which the contract is completed.
To determine the gross receipts on Schedule Y of Form RD-108B, construction businesses must use the same method used to determine whether or not a contract is included in a given tax year.
Resources
Code of Ordinances, Chapter 68, Article VI
Earnings and Profits Tax Regulations
Employers are required to deduct the earnings tax on wages and salaries paid to residents of Kansas City, Missouri and non-residents performing services within Kansas City, Missouri city limits.
In general, taxable earnings are gross compensation less contributions to cafeteria plans and qualified deferred compensation plans, similar to the amount used to calculate Box 1 of Form W-2 for federal income tax purposes. The withholding tax is to be remitted to the City at the same frequency used for state income tax withholding purposes. Remittances can be made electronically on Quick Tax or by using Form RD-130M or Form RD-130QM.
In addition to regular remittances, Form RD-110 is a return that is filed quarterly to report the taxable earnings paid for the quarter. The return is required even if there was no withholding during the quarter. Payments can be made with Form RD-110 for amounts not previously paid through prior remittances. Beginning January 1, 2021, Form RD-110 must be filed electronically. Employers can use Quick Tax or the Bulk Filing Program through a third party payroll provider. Failure to file electronically may result in filing penalties.
After the end of each year, employers are also required to file a reconciliation of annual withholdings to payments remitted on Form RD-113. The return is due by January 31. W-2 information is also required to be submitted at the same time. W-2 information should only be provided for employees who had earnings tax withheld from their compensation. Beginning January 1, 2021, Form RD-113 must be filed electronically. This includes W-2 records. Employers can use Quick Tax or the Bulk Filing Program through a third party payroll provider.
Tips
- Employers that fail to submit Form RD-113 or W-2 records are subject to a penalty. The penalties mirror those charged by the Internal Revenue Service.
- For non-residents, proportional withholding can be done based on the immediate experience of a person in the same position for the preceding year or the average experience of all individuals who have held the same position. For more information see the Earnings and Profits Tax Regulations.
Resources
Code of Ordinances, Chapter 68, Article VI
Earnings and Profits Tax Regulations
Earnings Tax Magnetic Media and Electronic Filing Specifications2025 Due Dates for Construction
January
31 Employer' Quarterly Return of Earnings Withheld (Form RD-110) - 4th Quarter, previous year.
Employer's Annual Reconciliation of Earnings Withheld (Form RD-113)/ previous year W-2 Information
April
30 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -0
1st Quarter
July
31 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -
2nd Quarter)
October
31 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -
3rd Quarter
