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Taxes

Business Formation Fees

Corporate Franchise Taxes

Income Taxes - Corporate

Income Taxes - Individual

Property Taxes

Sales & Use Taxes

Unemployment Insurance

Workers' Compensation

Incentives

Advanced Energy

Enterprise Zones

Financing Programs

Foreign Trade Zones

Income Tax Credits

Int'l Trade Incentives

Life Sciences and R&D

Property Tax Exemptions

Sales & Use Tax Exemptions

Training Programs

Utility Incentives

Venture Capital

Tax & Incentive Profile

Corporate Income Taxes

Both states administer an income tax measured by net income of the corporation. The determination of taxable income begins with net taxable income reported for federal income tax purposes. Both states permit deduction of operating expenses from gross income in arriving at net taxable income.

*Note: For tax years 2009 and 2010, the surcharge shall be in an amount equal to 3.05%, and for tax year 2011, the surcharge shall be in amount equal to 3.0% of the Kansas taxable income in excess of $50,000.

INFORMATION FOR BOTH KANSAS AND MISSOURI IS PRESENTED BELOW.

Kansas

Kansas corporate taxable income is defined as federal taxable income with numerous state adjustments. Kansas does not allow a deduction for federal or state income taxes.

The rate of tax is 4% of net taxable income. In addition, a 3.05% surtax is imposed on income in excess of $50,000. A corporation must make quarterly estimated tax payments if its Kansas income tax liability can reasonably be expected to exceed $500.

For those corporations having facilities both inside and outside Kansas, the net income attributed to the Kansas operation is based upon the percentage of the corporation's business located in Kansas. A business's tax obligation is determined by a three-factor formula that considers the proportion of sales, property, and dollar payroll attributable to the Kansas facility.

Corporations may opt for a two-factor (sales and property) apportionment formula to calculate tax liability if the payroll factor for a taxable year exceeds 200% of the average of the property and sales factors. Also, the state allows net operating losses to be carried forward for each of the 10 years following the tax year of the net operating loss.

Investment funds service companies headquartered in Kansas and employing 100 individuals on a full-time basis are taxed only on their income earned from the administration of funds of Kansas residents.

Alternative accounting methods can be approved by the Secretary of Revenue to effect an equitable allocation and apportionment of a taxpayer's income.

Job creation and investment tax credits are available state-wide to businesses which create new jobs and investment, by locating, expanding, or renovating within the state of Kansas.

The Kansas Department of Revenue can be found on the web at http://www.ksrevenue.org/.

Missouri

Missouri corporate income tax is based on federal taxable income with adjustments for state income taxes, interest from exempt federal obligations, and other less common adjustments.

The tax rate for corporations is 6.25% applied to Missouri taxable income. In addition, Missouri allows 50% of federal income tax payments to be deducted before computing taxable income. Using the deduction, a corporation with a taxable income of $1 million would have a Missouri effective tax rate of only 5.2%. Estimates must be filed and quarterly payments made, if the tax is reasonably expected to exceed $250.

For corporations conducting business both inside and outside Missouri, only income earned in Missouri is taxed. Two allocation options are offered for calculating this income: 1) a single-factor formula based on sales, or 2) a three-factor formula based on property, payroll, and sales. Missouri is the only state that permits companies to choose the formula that results in the lesser corporate income tax liability.

Kansas City, Missouri, imposes a tax at the rate of 1% on net profits earned by all corporations as a result of work done or services performed within its boundaries. Federal and state income taxes are not deductible, but local taxes paid are deductible. Apportionment of earnings, where the company has established places of business both in and out of the city, is made by use of a three-factor formula based on property, payroll, and sales.

A variety of benefits, including an array of income tax credits, are available to companies which create new jobs and new investment within Missouri.

The Missouri Department of Revenue can be found on the web at http://dor.mo.gov/.

DEFINING THE GREATER KC METRO AREA

Kansas City is a Missouri/Kansas bi-state metropolitan area. All statistical references made to Kansas City Metropolitan Statistical Area (MSA) include the counties of Cass, Clay, Clinton, Jackson, Lafayette, Platte and Ray in Missouri, and Johnson, Leavenworth, Miami and Wyandotte counties in Kansas. The greater Kansas City area also includes the adjoining Lawrence, KS, St. Joseph, MO, and Topeka, KS MSAs, as well as the Atchison, KS, Chillicothe, MO, Ottawa, KS, and Warrensburg, MO areas.