Missouri Business Taxes at a Glance
Missouri's individual income tax has been reduced in recent years, and starting with 2025 returns, capital gains are fully subtracted from Missouri income. But Missouri's two largest cities each impose their own earnings tax, counties tax vehicles and business property each year, and local sales tax rates vary widely. BOMCAS helps Missouri individuals and businesses manage these state and local rules.
Individual Income Tax and Capital Gains
Missouri taxes residents on all income and nonresidents on Missouri-source income, using graduated rates with a top rate that has been lowered in recent years. Starting with the 2025 tax year, eligible individuals can subtract 100% of federally reported net capital gains from Missouri adjusted gross income. Capital losses do not create a subtraction.
That change makes Missouri especially favorable for investors, business owners selling a company, and people selling property. We prepare Missouri returns, apply the subtraction, and review how it interacts with other income. Missouri also exempts Social Security benefits and offers deductions for public and private pensions.
Kansas City and St. Louis Earnings Taxes
Kansas City and St. Louis each levy an earnings tax on residents' earnings wherever earned, and on nonresidents' earnings for work done in the city. Businesses in each city also pay tax on net profits from activity there, and St. Louis has a payroll expense tax on employers.
Remote and hybrid work affects the earnings tax. Nonresidents who work part of the year outside the city may be able to claim a refund for those days, with employer certification and good records. Residents owe the tax on all earnings. We prepare earnings tax returns, refund requests, and business net profits returns.
Corporate Income Tax and Pass-Throughs
Corporations doing business in Missouri pay corporate income tax on apportioned income at a relatively low rate. Partnerships and S corporations file Missouri returns and may withhold or file composite returns for nonresident owners. Missouri also offers an elective pass-through entity tax with credits for owners. We file the business returns and compare results with and without the election.
Sales and Use Tax
Missouri's sales tax combines a state rate with city, county, and special district taxes, so combined rates vary widely, even within one metro area. Food is taxed at a reduced state rate. Remote sellers above Missouri's economic nexus threshold must register and collect, and local use tax applies in many jurisdictions.
We register businesses, track rates by location, and file returns.
Personal Property Tax and Vehicle Licensing
Missouri counties tax personal property, including vehicles, and businesses report equipment and inventory each year. Residents generally need proof that personal property taxes were paid to renew vehicle registrations. New residents and new businesses need to file declarations with the county assessor. We help businesses keep fixed asset records for these declarations and track payments.
Cross-Border Work: Kansas and Illinois
Missouri shares metro areas with Kansas and Illinois. Kansas residents working in Kansas City, Missouri, and Illinois residents working in St. Louis pay Missouri nonresident tax on wages earned in Missouri, and the city earnings tax when they work in the city. Missouri residents working in Kansas or Illinois pay tax there and claim a credit. We prepare returns for both states and the city earnings tax.
Farms and Rural Businesses
Agriculture is a large part of Missouri's economy outside the two metro areas. Farm clients need inventory records for grain and livestock, federal farm reporting, and documentation for sales tax exemptions on qualifying machinery, feed, and other inputs. Agricultural land is assessed for property tax based on its productive use. We provide bookkeeping and tax support built around the farm year.
Missouri Retirees and Social Security
Missouri stopped taxing Social Security benefits starting with 2024, and it offers a public pension exemption subject to limits. Retirees moving to the Ozarks or the lake regions should check which other income remains taxable and set up estimated payments where needed.
Payroll With City Earnings Tax
Missouri employers withhold state income tax and, where applicable, Kansas City or St. Louis earnings tax. Employers report unemployment insurance to the Division of Employment Security. We handle payroll runs and state reports and tie both back to the accounting records.
Aerospace, Farms, Logistics, and Ozarks Tourism
- Aerospace and manufacturing in St. Louis: inventory, fixed assets, and earnings tax
- Agriculture: soybeans, corn, and cattle, with farm reporting and exemptions
- Logistics and distribution in Kansas City: apportionment and payroll
- Health care: practices with staff in both cities
- Tourism in Branson and the Lake of the Ozarks: lodging taxes and seasonal staffing
Timing a Move Around a Capital Gain
Because Missouri now subtracts capital gains, people planning to sell a business or appreciated property sometimes ask whether moving to Missouri first changes the result. It can, but the former state may still tax gain from property located there, such as real estate or a business operating there, and it may question a move made shortly before a sale. We review the timing, the source of the gain, and the records needed in both states.
Books by City, County, and Location
Missouri bookkeeping should track wages by work location for city earnings taxes, sales by jurisdiction, and fixed assets by county for personal property declarations. We set up the chart of accounts and monthly close to provide these figures.
Contact BOMCAS About Missouri
Investors applying the capital gains subtraction, employers withholding Kansas City or St. Louis earnings tax, and businesses filing personal property declarations can contact BOMCAS for a remote review. Local pages for Missouri cities and services are planned under this section. Visit the BOMCAS home page or our United States services. This page is general information only.
Talk to BOMCAS About Your Missouri Taxes
Have a question about your Missouri filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.