The City of Kansas City defines a short-term rental (STR) as any dwelling unit offered, provided, or operated as lodging accommodations to guests in exchange for remuneration for a period of thirty (30) or fewer consecutive days, unless the rental meets the definition of "lodging" or "bed and breakfast." Typically these properties are advertised on apps like Airbnb and VRBO.
Short-term rentals (STRs) must be registered for all appropriate taxes to do business in Kansas City, Missouri. This is in addition to obtaining an STR permit. The STR permit needs to be obtained from Neighborhood Services Department after setting up all tax accounts and obtaining a tax clearance. For more information, please visit: https://www.kcmo.gov/Home/Components/News/News/2033/16
To get the appropriate tax accounts set up, submit a Registration Application (Form RD-100) to the Business License Office, Finance Department. Form RD-100 can be submitted electronically on Quick Tax (www.kcmo.gov/quicktax) or in person to the Business License Office at City Hall, 1st floor, 414 E. 12th St., Kansas City, Missouri 64106. 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.You must also request a tax clearance, which will need to be provided to the Neighborhoods Department when applying for your permit.
The registration for the STR permit is available with the Neighborhood Services Department as of June 15, 2023, at 635 Woodland Ave, Suite 2101. Kansas City, MO 64106.
Please contact the Neighborhood Services Department at (816) 513-3226 or str@kcmo.org. For additional information, please visit: https://www.kcmo.gov/programs-initiatives/str
Effective August 1, 2023, a tax of 7.5% is imposed on the sale or charges of sleeping rooms and for the services accompanying the use of the room paid by transient guests situated within the city limits of Kansas City, MO.
Form RD-306 is used by STRs to file and pay the 7.5% tax on the amount charged for sleeping rooms. The tax applies to all sales or charges paid by transient guests for a sleeping room and its furnishings and for the services accompanying the use of the room. It includes the use of all items and services that are connected with, or incidental, to the rental of the sleeping rooms.
Rooms rented to non-transient guests are not included in the tax. A non-transient guest is a person who occupies a room in a short-term rental facility for more than 30 consecutive days during any calendar quarter.
The tax should be separately stated on a customer's bill, similar to sales tax. Form RD-306 must be filed quarterly. Remittances can be made electronically on Quick Tax (www.kcmo.gov/quicktax). Form RD-306 must be filed electronically.
Tips
- Charges for a room rented by a business (i.e., an airline or corporation) may not be deducted from gross receipts as "non-transient" (businesses do not qualify as "permanent guests").
- Lodging Fees charged to the customer are subject to the 7.5% STR tax rate on rooms.
- The only guests – other than "non-transient" guests – that are exempt from the STR are employees of the federal government on official business.
- Cancellation charges are not subject to STR tax.
- Sleeping rooms that rent for less than $20 per day or less than $85 per week and shelters for the homeless operated by not-for-profit organizations are not required to comply with STR regulations.
- Two percent (2%) of the tax due may be retained by the taxpayer if the tax is filed and paid by the due date.
Resources
Code of Ordinances, Chapter 68, Article IX
Form RD-306 is also used by short-term rentals to file and pay the Occupancy Fee of $3.00 on occupied rooms. This fee is generally passed on to customers. If added to customer bills, the fee should be separately stated, similar to the sales tax, and becomes part of the short-term rental's gross receipts and subject to the STR tax of 7.5%.
Please be advised that the STR Occupancy Fee of $3.00, per occupied room, is in lieu of the current business license requirement based on gross receipts (Form RD-105).
Any non-transient guest who occupies a room in an STR facility for more than 30 consecutive days during any calendar quarter is exempt from the STR Tax and the STR Occupancy Fee. Non-transient guests need to obtain a regular business license by filing form RD-105 and follow the guidelines outlined under Tax Guide for Rental Businesses.
Resources
Code of Ordinances, Chapter 40, Article II
Form RD-108/108B is a tax return used by businesses 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.
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, MO and non-residents performing services within Kansas City, MO 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 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
- Remittance due dates are published annually.
- 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.
Resources
Code of Ordinances, Chapter 68, Article VI
Earnings and Profits Tax Regulations
Earnings Tax Magnetic Media and Electronic Filing Specifications
2024 Due Dates for Short-term rentals
January
31 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -
4th Quarter (previous year)
31 Employer's Annual Reconciliation of Earnings Withheld
(Form RD-113)/(previous year) W-2 Information
31 Short-term Rental Fees Quarterly Return (Form RD-306) 4th Quarter (previous year)
April
15 Profits Earnings Tax (Form RD-108/108B) and Extension
(Form RD-111), calendar filers
30 Short-term Rental Fees Quarterly Return (Form RD-306) 1st Quarter
30 Employer's Quarterly Return of Earnings Withheld (Form RD-110) -
1st Quarter
July
31 Short-term Rental Fees Quarterly Return (Form RD-306)
2nd Quarter 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
31 Short-term Rental Fees Quarterly Return (Form RD-306) - 3rd Quarter
