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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Form 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 Specifications2024 Due Dates for Construction
January
15 Martin Luther King Jr. Day - City Offices closed
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
Convention & Tourism Tax (Form RD-107) - December/ 4th
Quarter, previous year, monthly/ quarterly filers
February
19 Presidents Day - City Offices closed
29 Business License (Form RD-105)
Convention & Tourism Tax (Forms RD-106, RD-107) - January, monthly filers
April
1 Convention & Tourism Tax (Form RD-107) - February, monthly filers
15 Profits Earnings Tax (Form RD-108/ 108B) and Extension
(Form RD-111), calendar filers
30 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -0
1st Quarter
Convention & Tourism Tax (Forms RD-106, RD-107) - March, monthly/quarterly filers
May
27 Memorial Day - City Offices closed
31 Convention & Tourism Tax (Forms RD-106, RD-107) - April, monthly filers
June
19 Juneteenth (observed) - City Offices closed
July
1 Convention & Tourism Tax (Forms RD-106, RD-107) - May/ 2nd Quarter, monthly/ quarterly filers
4 Independence Day - City Offices closed
31 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -
2nd Quarter)
Convention & Tourism Tax (Forms RD-106, RD-107) - June, monthly filers
September
2 Labor Day - City Offices closed
3 Convention & Tourism Tax (Forms RD-106, RD-107) - July, monthly filers
30 Convention & Tourism Tax (Forms RD-106, RD-107) - August, monthly filers
October
31 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -
3rd Quarter
Convention & Tourism Tax (Forms RD-106, RD-107) - September/ 3rd Quarter, monthly/ quarterly filers
November
11 Veterans Day - City Offices closed
28 Thanksgiving Day - City Offices closed
29 Thanksgiving Holiday - City Offices closed
December
2 Convention & Tourism Tax (Forms RD-106, RD-107) - October, monthly filers
25 Christmas Day - City Offices closed
31 Convention & Tourism Tax (Forms RD-106, RD-107) - November, monthly filers
