Starting a Business in the Kansas City Metro: Kansas Side vs Missouri Side Taxes and Licenses
Starting a Business in the Kansas City Metro: Kansas Side vs Missouri Side Taxes and Licenses
If you are weighing kansas city ks vs kansas city mo for a new business, you are really choosing between two sets of state and city rules. Kansas City, Kansas and Kansas City, Missouri are different cities in different states. Together they anchor a metro area of 2,270,682 people in the Census Bureau's 2025 figures, and about 41% of that population lives on the Kansas side (our calculation). The state line matters most for local taxes and licenses. Kansas has no city or county earnings tax. Kansas City, Missouri levies a 1% earnings tax on wages earned in the city, including by nonresidents.
This guide covers what Kansas requires statewide, the city rules you will meet on the Kansas side, and what the Missouri side adds. Where a figure is not confirmed here, we tell you which agency to check.
Informational note: This article is general information, not legal or tax advice. Rules and rates change, so confirm every figure with the named agency before you rely on it.
Side-by-Side Comparison
| Item | Kansas side | Missouri side (Kansas City, MO) |
|---|---|---|
| Local earnings tax | None | 1% on wages earned in the city, including by nonresidents |
| Base city sales tax | 8.975% (Prairie Village) to 10.0% (Edwardsville), before special districts | Check with the Missouri Department of Revenue |
| City business license | Varies by city. Kansas City, KS charges an annual occupation tax. Overland Park has no general license. | Required for Kansas City, MO businesses. Check kcmo.gov. |
| Statewide general business license | None | Check with Missouri agencies |
| Entity formation filing | Articles of Organization, $85 | Check with the Missouri Secretary of State |
| Recurring entity filing | Biennial Information Report, $90 | Check with the Missouri Secretary of State |
Any cell that says check is a figure this guide does not state as settled.
The Kansas Statewide Layer
Kansas has no statewide general business license. Registering an entity with the Kansas Secretary of State is a filing, not a license. Registering for Kansas business taxes with the Kansas Department of Revenue (KDOR) is free. Beyond that, licensing works by agency and by trade:
- KDA: food, pesticides and pet animals
- KDHE: home health
- Kansas Office of Early Childhood: child care (moved from KDHE on July 1, 2026)
- KDOR: liquor, cigarettes and dealers
- KCC: motor carriers and oil and gas
- Attorney General: roofing
- KREC: real estate
- Cosmetology and barbering boards, among others
Many owners expect a state license for trades that Kansas does not license statewide. There is no statewide general contractor, electrician, plumber or HVAC license. Cities and counties issue those, so the rules change as you cross from Kansas City, Kansas into Overland Park, Olathe or Shawnee. Kansas has 105 counties and 624 cities. Every incorporated place is legally a city, so there are no towns or villages to look for.
Forming an LLC on the Kansas Side
The formation document for an LLC is the Articles of Organization, Domestic (Kansas) Limited Liability Company (Form DL). The filing fee is $85. The name must contain L.L.C., L.C., LLC, LC, LIMITED LIABILITY COMPANY or LIMITED COMPANY. The Secretary of State checks the name against registered entities. If a similar name is in use, the formation document must be accompanied by a Consent to Use of Similar Business Name (Form CN). If you need time to prepare, Kansas offers a name reservation for $35, which lasts 120 days.
Kansas uses the term resident agent. The resident agent must be an individual, a business registered in Kansas, or the entity itself. The registered office must be a Kansas street address where the resident agent can be regularly present. A PO box will not work. If the resident agent or registered office changes, update the filing.
The recurring filing is the biennial Information Report, not an annual report. For LLCs it is Form ILC, due every two years by April 15, with a $90 fee. A business formed in an even year reports in each later even year. A business formed in an odd year reports in each later odd year. After the due date, a three month delinquency window runs before forfeiture.
Kansas has no state-level DBA filing and no franchise tax. If you operate under a name other than your legal name, check city and county requirements. You can protect the name itself through Secretary of State trademark and service mark registration.
Corporations file Articles of Incorporation, Domestic (Kansas) Corporation (Form AI), for the same $85 fee. They file the biennial Information Report for for-profit corporations (Form IFP), also $90, by April 15 in the odd or even year that matches formation.
How an LLC Is Taxed in Kansas
An LLC is a pass-through entity for Kansas income tax. Members report Kansas income on their individual returns. The rate is 5.2% on Kansas taxable income up to $23,000 for single filers or $46,000 for married filing jointly, and 5.58% above those thresholds. An LLC taxed as a corporation pays the 3.5% corporate normal tax plus a 3% surtax on Kansas taxable income over $50,000. Whether an LLC should elect corporate treatment is a question for a CPA.
Sales Tax on the Kansas Side
The Kansas state sales tax rate is 6.5%. Local cities, counties and special districts add their own rates on top. Base city rates for the metro, before special districts, are below (KDOR Publication 1700, effective October 1, 2026):
| City | Base sales tax rate |
|---|---|
| Prairie Village | 8.975% |
| Kansas City, KS | 9.125% |
| Overland Park | 9.35% |
| Olathe | 9.475% |
| Shawnee | 9.60% |
| Edwardsville | 10.0% |
| Wichita (for comparison) | 7.5% |
The spread across Johnson and Wyandotte County cities is roughly one percentage point on base rates alone, and special districts can widen it further. Register for your sales tax permit through KDOR at ksrevenue.gov/busregistration.html, and confirm the total rate for your exact address with KDOR before you set up your point of sale.
City Rules on the Kansas Side
Each city sets business rules on top of state law. Two examples in the metro:
- Kansas City, Kansas charges an annual occupation tax on businesses. Confirm the current amount and whether it applies to your trade with the city.
- Overland Park has no general business license. Specific trades may still need a permit or license.
Olathe, Shawnee and other cities each have their own rules. Call the city clerk or the planning and building office before you sign a lease, because some permits attach to the location, not the owner.
What the Missouri Side Adds
- Earnings tax. Kansas City, Missouri levies a 1% earnings tax on wages earned in the city, including by nonresidents. Voters renewed it in April 2026. Those results are unofficial, so check the KCMO finance page for the final status.
- City business license. A business on the Missouri side needs a Kansas City, Missouri business license. Check kcmo.gov for the application and fee.
- State taxes and licenses. This guide does not state Missouri tax or license rates beyond the earnings tax. Confirm them with the Missouri Department of Revenue.
The earnings tax is the one that catches Kansas-based owners. It applies to wages earned in the city, not only to wages of residents. A Kansas company whose staff do work inside Kansas City, Missouri should ask KCMO finance whether withholding applies to those wages. Do not assume the employee's home address settles the question.
Choosing a Side
Location is a tax decision as much as a real estate decision. Weigh these factors before you sign anything:
- Where your employees will live and work. The KCMO earnings tax follows wages earned in the city.
- Where your customers are and how you will sell. Sales tax rates on the Kansas side vary by city and special district.
- Your trade. A contractor on the Kansas side answers to the city or county, and a food business answers to KDA plus its city. Confirm the rules for your trade on each side.
- Whether permits, bids or a lease require a Missouri address.
Steps for a Kansas-Side Business
- Confirm the exact city for your address, then check that city's business license and trade permits.
- Reserve your name for $35 if you need time, or file directly.
- File the Articles of Organization ($85) through the Secretary of State's online filing portal or by paper. Online filings process within minutes.
- Appoint a resident agent with a Kansas street address.
- Register with KDOR at no cost. If you sell taxable goods, obtain a sales tax permit and confirm the rate for your address.
- Obtain any agency license your trade requires from KDA, KDHE, the Kansas Office of Early Childhood, KDOR, KCC, the Attorney General, KREC or the relevant board.
- Get city or county permits for construction, signage or occupancy.
- Calendar the $90 biennial Information Report, due April 15 every other year.
Common Mistakes
- Treating the two Kansas Citys as one tax area. They sit in different states under different tax systems.
- Applying Missouri earnings tax rules to a Kansas-side business without checking where the wages are earned.
- Assuming Kansas requires a statewide contractor license. The city or county issues it instead.
- Calendaring an annual report. Kansas uses a biennial Information Report.
- Looking for a state DBA filing. Kansas has none.
Official Resources
- Kansas Secretary of State business services: https://sos.ks.gov/business/business.html
- Business entity search: https://www.sos.ks.gov/eforms/BusinessEntity/Search.aspx
- Secretary of State online filing (Customer Login): https://www.sos.ks.gov/eforms/user_login.aspx?frm=BS
- Kansas Department of Revenue business page: https://www.ksrevenue.gov/business.html
- Kansas sales tax registration: https://www.ksrevenue.gov/busregistration.html
- Kansas Small Business Development Center: https://www.kansassbdc.net/
- SBA Wichita district office: https://www.sba.gov/district/wichita
- Kansas City, Missouri: https://kcmo.gov
When to Get Professional Help
A business that operates or employs people in both states has tax, payroll and licensing questions on each side. Talk with a CPA about withholding and income tax, and with an attorney about the entity structure and any local licensing questions. The Kansas Small Business Development Center can help you organize the decision before you meet with them.
Disclaimer: This article is informational only and is not legal or tax advice. Confirm all fees, rates and deadlines with the agency named before you act.