Profits Tax Form RD-108/108B
Business License Office 1118 Oak St. Kansas City, MO 64106 Phone: 816-513-1135 Email: business.license@kcmo.org
Restaurants 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 1118 Oak Street, Kansas City, Missouri 64106. A Zoning Clearance is required. Other clearances and permits may be requested. Restaurants are required to send the Health Department a Food Establishment Permit Application. The application must be completed and submitted at least 30 days prior to a restaurant’s planned opening or transfer of ownership. Once the permit application has been filed, the Health Department will conduct a pre-opening inspection. The City charges fees for processing applications and issuing food establishment permits. The Health Department will create an inspection schedule for established restaurants, with intervals that average six months. More frequent inspections may be made at the department’s discretion. Restaurants must have a license to serve alcoholic beverages. Forms for acquiring a license are available from the Neighborhoods & Housing Services Department, Regulated Industries Division. 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.
Convention & Tourism Tax Form RD-107 or Form RD-137
Revenue Division City Hall, 2nd floor 414 E. 12th St. Kansas City, MO 64106 Phone: 816-513-1120 Email: revenue@kcmo.org
Forms
Getting Started
Tax Guide for
Restaurants
Business License Form RD-105
Earnings Tax Form RD-130M or 130QM Quarterly: Form RD-110 Annually: Form RD-113
Tips With the exception of prepared food, sales from a “gift shop” or non-food items sold like mugs and t-shirts are subject to being reported on the business license.
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.
Business License
Profits Tax
A business license is required for restaurants that sell items in addition to food. These charges should be reported on Form RD-105. 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 A included with the form. Sales of prepared food should not be reported on your business license but are instead subject to the Convention and Tourism Tax and should be reported on Form RD-107. Sales of prepackaged food, prepared off-site and not regularly sold with prepared food items, are reported on your business license.
Convention & Tourism
Form RD-107 is the tax return used to file and pay the tax of 2% on prepared food items. This includes alcoholic beverages. The tax should be added to customers' bills in a similar manner as sales tax. Form RD-107 should be filed with the same frequency used for remitting state sales tax. Remittances can be made electronically on Quick Tax or by using Form RD-137.
Tips “Preparation” is an expansive definition and includes heating of food, mixing and combining two or more food ingredients or repackaging food into serving-sized portions. Heating of food by the customer does not make the item subject to tax unless other food items are prepared on the premises. Some items are not subject to tax regardless if they are “prepared” or not (if those are the only “prepared” items sold). These items can be found in section 1.551-3 (B)(5)(a) – (f) of the Convention & Tourism Tax Regulations (page 11). If you sell “prepared” food items that are not included in this list then both the other “prepared” items and those listed are subject to the tax. Prepackaged food or drinks regularly sold with prepared food items are subject to tax. Two percent (2%) of the tax due may be retained by the taxpayer if the tax is paid by the due date.
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.
Earnings Tax Withholding
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. When an employee receives tips, the employer might not have the chance to withhold federal, state, or local taxes on the tip income. In some situations, the regular pay of an employee is not sufficient for the employer to withhold all local taxes due on the regular pay and tip income. The amount of regular pay and tip income is still taxable. Employees are responsible for filing Form RD-109 annually to report the difference between the total amount of wages and tips received and the amount of tax withheld through payroll withholding. 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 Form RD-113. The return is due by January 31 and is a reconciliation of annual withholdings to payments remitted. 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.