Taxes + Incentives
A Market Defined by Choice and Flexibility
Kansas City’s position across Kansas and Missouri creates a uniquely flexible business environment with twice the incentive and tax options of most regions. This dual-state landscape empowers companies to choose the combination of programs and costs that delivers the greatest competitive advantage.
Business Incentives
Resources Designed to Help Your Business Grow
Explore the programs below. Each has its own eligibility criteria, so reach out when you’re ready to see which incentives fit your goals.
Capital
Industrial Revenue Bonds (IRBs)
Industrial Revenue Bonds allow cities or counties to finance up to 100% of a company’s land, building and equipment needs at highly competitive rates. Businesses benefit from flexible terms, potential tax-exempt financing and significant savings through property tax abatements and exemptions on sales tax for construction materials and equipment. Learn More
Tax Increment Financing (TIF)
TIF enables communities to finance redevelopment by capturing the increase in property or sales tax generated by a new project. These future revenues are used to fund eligible improvements, reducing a company’s upfront development expenses. Learn More
Sales Tax and Revenue (STAR) Bonds
STAR Bonds let Kansas municipalities finance major commercial, entertainment or tourism developments by using future sales tax revenue generated within the project district. This tool helps developers cover large infrastructure or attraction-related costs without raising new taxes. Learn More
Missouri BUILD Program
The BUILD program supports large, high-impact projects through bond financing tied to investment and job creation commitments. Companies benefit from refundable state tax credits that cover the annual bond debt service for 10–15 years, significantly reducing capital costs. Learn More
Municipal Bond Programs
Cities and counties in Missouri can issue revenue or general obligation bonds to finance industrial facilities, which can then be leased or sold to companies. When structured as municipal IRBs, projects may qualify for tax-exempt financing and substantial property tax relief on bond-funded buildings and equipment.
Tax Increment Financing (TIF)
TIF helps fund redevelopment by directing the growth in property or sales tax revenue back into eligible site improvements. This reduces upfront development costs and helps support new industrial, commercial or mixed-use investment. Learn More
Tax Credits
Promoting Employment Across Kansas (PEAK)
PEAK allows qualifying companies to retain a significant portion of employee payroll withholding taxes when they create new, at or above-median-wage jobs in Kansas. Depending on job creation and wage levels, companies can retain up to 95% of withholding tax for up to 5 to 10 years, offering substantial savings when expanding or relocating to the state. Learn More
High Performance Incentive Program (HPIP)
HPIP rewards companies that pay above-average wages and invest in their operations with a 10% investment tax credit, sales tax exemptions and training credits. Businesses benefit from lower capital costs and priority access to other Kansas assistance programs. Learn More
Child Day Care Assistance Tax Credits
Companies that establish or operate child care facilities for employees can receive tax credits covering up to 50% of first-year costs and 30% of ongoing expenses. These credits help businesses support working families and reduce barriers to employee retention. Learn More
Research & Development (R&D) Tax Credits
Kansas offers a tax credit of up to 10% of qualified R&D expenditures that exceed a business’s historical average. The credit is used in 25% increments over time, lowering the cost of innovation and product development. Learn More
Other Kansas Tax Credit Programs
Additional credits support investments in angel investors, venture capital, community service, alternative fuel, aviation, historic preservation, telecommunications infrastructure, employer health contributions and accessibility improvements. These programs offset costs for specialized projects while supporting community, economic and workforce development across the state.
Missouri Works
Missouri Works allows eligible companies to retain withholding taxes and access refundable or discretionary tax credits when they create new, competitive-wage jobs. Benefits vary by project type and location but can significantly reduce labor-related costs for expanding or relocating businesses. Learn More
Missouri Development Finance Board Tax Credit Programs
Businesses contributing to approved development funds or nonprofit-led projects can earn tax credits worth 50% of their contribution. These credits help finance loans, infrastructure and job-creating projects, and they can be transferred, sold or carried forward for up to five years. Learn More
Other Missouri Tax Credit Programs
Missouri also offers tax credits programs including: Research Expense Tax Credit Program, Brownfield Remediation Program, New Markets Tax Credit Program, Neighborhood Assistance Program, Historic Preservation Tax Credit Program, and the Community Bank Investment Tax Credit Program.
Tax credits available range from 25% to 70% of contributions to qualified projects. Effectively, such programs enable businesses to redirect their tax dollars to help finance local job creation, growth of the tax base, elimination of blight, and a variety of other purposes. Some programs allow credits to be used in ensuing tax periods or to be sold or transferred to other taxpayers.
Tax Exemptions
Property Tax Exemptions
Exemption of Property for Economic Development Purposes
Cities and counties may grant up to a 10-year property tax exemption on new or expanding facilities used for manufacturing, R&D or interstate commerce warehousing. This incentive lowers operating costs for businesses creating new jobs or locating new operations in the community. Learn More
Machinery & Equipment Personal Property Tax Exemption
Qualified commercial and industrial machinery and equipment—whether newly purchased, leased or moved into Kansas—is fully exempt from state and local property taxes. This applies to assets used in manufacturing, warehousing and general commercial operations, reducing upfront investment costs. Learn More
Industrial Revenue Bond (IRB) Property Tax Exemption
Property financed through IRBs may receive up to 10 years of property tax exemption, with local governments able to negotiate payments in lieu of taxes. This tool helps companies lower project costs while accessing competitive financing. Learn More
Inventory Exemption
All merchant and manufacturer inventory is exempt from property taxation. This eliminates ongoing tax burdens on goods, raw materials and finished products. Learn More
Sales and Use Tax Exemptions
Kansas offers multiple sales and use tax exemptions to reduce upfront project and operating costs. Eligible purchases may include labor for original construction, remodeling costs, furnishings, and equipment for qualified projects, new machinery and equipment for manufacturing and distribution, ingredient and component materials, items consumed in production, interstate telephone or transmission services (WATTS), or property financed through IRBs. Learn More
Property Tax Exemptions
Enhanced Enterprise Zone (EEZ)
EEZ incentives allow eligible investment in equipment, furniture, fixtures, land and building improvements to qualify for property tax abatement. Authorized projects benefit from reduced long-term operating costs while supporting targeted economic growth areas. Learn More
Inventory Exemption
Manufacturers’, retailers’, wholesalers’ and distributors’ inventories—including raw materials, in-process goods and finished goods—are exempt from all state and local property taxes. This eliminates inventory-related carrying costs for Missouri businesses. Learn More
Chapter 100 Bonds (Property Tax Abatement)
Chapter 100 enables cities and counties to issue development bonds and offer real and personal property tax abatements, plus sales tax exemptions on construction materials and equipment. Local governments determine the specific term and abatement level, making it a flexible tool for reducing project costs. Learn More
Sales and Use Tax Exemptions
Manufacturing Machinery, Equipment & Energy Exemption
Missouri exempts machinery, equipment, and energy directly used in manufacturing from state sales tax and local use tax, lowering production costs. Manufacturers’ inventories are also exempt from inventory taxes, reducing expenses tied to storing goods and materials. Learn More
Chapter 100 Bonds (Sales Tax Exemptions)
Projects financed through Chapter 100 may receive sales tax exemptions on construction materials and tangible personal property. These exemptions further reduce the total cost of building or expanding a facility. Learn More
Utility Programs
Economic Development Riders for Utilities
Utility providers across the Kansas City region offer economic development incentives that reduce energy costs for qualifying businesses. These programs—designed for both large industrial users anywhere in the region and smaller customers in the urban core—provide discounted natural gas and electricity rates based on a company’s projected load or demand.
Eligible businesses may receive a five-year decreasing (or in some cases increasing) discount schedule, often amounting to the equivalent of one free year of service. Specific cost-saving estimates and program details are available directly from each utility or through the Kansas City Area Development Council.
Workforce Development
Kansas Industrial Training (KIT)
KIT provides financial assistance to companies creating new jobs, helping offset the cost of training new employees. Eligible businesses—primarily in manufacturing, distribution or regional/national service—can use funds for instructor wages, training materials, travel, curriculum development and other training-related expenses. Learn More
Kansas Industrial Retraining (KIR)
KIR supports companies needing to retrain existing employees on new technologies, equipment or production processes. The program offers direct financial assistance to reduce retraining costs, helping Kansas employers maintain a skilled, up-to-date workforce. Learn More
Missouri One Start
Missouri One Start delivers customized workforce solutions—including recruitment support and tailored pre- and post-employment training—to meet each company’s specific needs. Training can be provided on-site, in classrooms or through the statewide One Start network, helping businesses build and scale a qualified workforce quickly and efficiently. Learn More
International Trade
World Trade Center – Kansas City
The World Trade Center, sponsored by the Greater Kansas City Chamber of Commerce, helps companies expand globally through international business services, market insights and export development programs. Its resources and guidance support regional businesses looking to grow their presence in foreign markets. Learn More
Foreign Trade Zones (FTZ 15 & 17)
Kansas City’s Foreign Trade Zones—one of the largest inland FTZ operations in the U.S.—offer companies the ability to store, assemble, manufacture,or process goods in a secure, duty-advantaged environment. Businesses benefit from delayed, reduced or eliminated customs duties; indefinite storage time; lower duty rates on finished goods; and the ability to destroy or export merchandise without duty.
Kansas City’s FTZ program, administered by the Greater Kansas City Foreign Trade Zone, Inc., also operates under the Alternative Site Framework (ASF), allowing businesses of all sizes to access FTZ benefits more quickly through streamlined applications and faster approvals.
Kansas Department of Commerce International Trade Services
Supports businesses looking to expand internationally and attracts foreign investment to the state through trade promotion and investment recruitment, with representatives in Brazil, China, Europe, India, Japan, Korea, Mexico and Taiwan. Learn More
Kansas Global Business Expansion Program (K-GLOBE)
K-GLOBE program assists Kansas headquarter companies in boosting their export business through exhibiting products at foreign trade shows and conducting export-related marketing activities. Eligible businesses may receive reimbursement for 50% of eligible direct expenses up $10,000 every fiscal year regardless of previous program award history. Learn More
International Trade and Investment Group
Helps Missouri companies increase exports and attract foreign investment by providing trade counseling, global market research, trade missions, trade show support, agent/distribution searches and other international business resources, with offices in China, Europe, Japan, Mexico and Taiwan. Learn More
Taxes
Your Guide to a Two-State Tax Environment
Review the tax structures that shape doing business in the Kansas City region. Regulations differ across Kansas and Missouri, and we’re here to help you determine how each one impacts your operations.
Business Formation Fee
Kansas charges different filing fees depending on the type of business formation. Domestic for-profit corporations pay $160-$165. Annual reports and amendments require separate filing fees, and many filings can be completed electronically.
Missouri domestic corporations pay a base fee of $50 for the first $30,000 of authorized shares, plus additional tech and certificate fees, with extra charges for higher share amounts. Foreign corporations pay $155 for a certificate of authority, and all corporations pay an annual registration fee of $45 ($20 online).
Corporate Franchise Tax
The state of Kansas has no corporate franchise tax.
The state of Missouri has no corporate franchise tax.
Corporate Income Tax
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.
Corporate Income Tax Rates
| Kansas | 4% of net taxable income. In addition, income in excess of $50,000 is subject to a 3.0% surtax. |
| Missouri | 4% of net taxable income earned in the state. (Note that Missouri allows 50% of federal income tax payments to be deducted before computing taxable income.) |
Kansas – State Corporate Income Tax
Kansas bases corporate taxable income on federal taxable income with state-specific adjustments. The standard tax rate is 4%, with a 3% surtax on income over $50,000. Corporations with operations both inside and outside Kansas apportion income using a formula based on sales, property and payroll, with the option to use a two-factor formula under certain conditions.
Kansas allows net operating losses to be carried forward for nine years, and investment funds service companies headquartered in Kansas are taxed only on income from Kansas residents’ funds. Businesses creating jobs or investing in the state may qualify for tax credits. Corporations must make quarterly estimated payments if their liability exceeds $500.
Missouri – State Corporate Income Tax
Missouri calculates corporate income tax on federal taxable income with certain state adjustments. The tax rate is 4%, and companies can deduct 50% of federal income tax payments when computing Missouri taxable income, lowering effective rates. Corporations operating both in and outside Missouri may apportion income using either a single-factor (sales) formula or a three-factor (property, payroll, sales) formula—the state allows businesses to choose the option resulting in the lowest tax. Estimated quarterly payments are required if liability exceeds $100.
Kansas City, Missouri – Local Corporate Income Tax
Kansas City, Missouri imposes a 1% tax on net profits earned from work or services performed within city limits. Federal and state taxes are not deductible, but local taxes are. Corporations with operations inside and outside the city apportion income using a three-factor formula based on property, payroll and sales.
Individual Income Tax
Both the state of Kansas and the state of Missouri use a graduated tax rate schedule based on net taxable income. Personal exemptions, itemized deductions, or standard deductions are applied to gross income to obtain net taxable income.
Kansas – State Individual Income Tax
For tax year 2024, taxable income was reduced by standard or itemized deductions: $3,605 for single filers, $6,180 for head-of-household filers, and $8,240 for married couples filing jointly.
City Earnings Taxes
No cities in Kansas levy an earnings tax. However, Kansas residents working in Kansas City, Missouri are subject to the Kansas City, Missouri earnings tax.
Missouri – State Individual Income Tax
For tax year 2025, Missouri individual income tax rates range from 0% on the first $1,273 of taxable income to 4.8% on income over $8,911. Taxable income is reduced by standard and itemized deductions, including a portion of federal income tax paid (up to $13,850 for single filers and $27,700 for joint filers), $1,200 per dependent, etc.
City Earnings Taxes
Kansas City, Missouri, imposes a 1% tax on salaries, wages, and commissions earned by individuals living or working in the city.
Property Tax
Local municipalities provide a range of services, including schools, colleges, fire, water, drainage and hospitals, each funded by separate taxing authorities. Tax rates vary by community depending on which authorities levy taxes in that area. The Kansas City Area Development Council keeps a detailed database of property tax rates by municipality, reach out for more information.
Kansas property taxes combine state, county, city, school, and district levies, and most real property is subject to ad valorem taxation unless exempt, including certain inventories, in-transit goods, charitable property, and business aircraft.
Assessment ratios vary:
- Commercial/industrial property 25%
- Residential 11.5%
- Agricultural land 30%
- Not-for-profit/ vacant lots 12%
- Public utility property 33%
Tangible Personal Property
Machinery and equipment used for manufacturing, warehousing, or facility expansion may be exempt from state and local property taxes.
Intangible Personal Property
Kansas allows a small tax (up to 3%) on income from money, securities, and other assets, though most metro-area counties and cities have eliminated it.
Non-Business Personal Property
Vehicles, trailers, and watercraft are assessed at 30% of market value, with vehicle values depreciated 15% per year.
Missouri property taxes combine state, county, city, and school levies, and all real and tangible personal property is taxable unless exempt, including inventories and property used by nonprofits.
Assessment ratios vary:
- Commercial/industrial property 32%
- Residential 19%
- Agricultural 12%
- Tangible personal property 33⅓%
Tangible Personal Property
Machinery, equipment, and other business assets are assessed at 33⅓% of fair market value, often using depreciation formulas.
Intangible Personal Property
Missouri does not tax intangible personal property.
Non-Business Personal Property
Licensed vehicles, boats, trailers, and campers are taxed at 33⅓% of actual cash value; livestock is assessed at 12% and grain/crops at 0.5%.
Sales and Use Tax
Sales tax is applicable on all sales made from a location within a state. Use tax applies to property for use, storage, or consumption that was purchased from an out-of-state vendor. The Kansas City Area Development Council keeps a detailed database of sales and use tax rates by municipality, reach out for more information.
Kansas imposes a 6.5% state sales and use tax on most retail purchases and taxable services, with additional local levies that vary by city or county. If property has already been taxed at less than 6.3% by another state, Kansas taxes only the difference.
Missouri levies a 4.225% state sales/use tax on most purchases, with food taxed at 1.225%, and local county and municipal taxes ranging from 0.75% to 2.0%. If property has already been taxed at less than 4.225% by another state, Missouri taxes only the difference.
Unemployment Insurance
Kansas adjusts employer UI rates annually based on the fund balance, with positive-balance employers typically paying between 0.0%-4.3% and negative-balance employers paying 5.6%-7.4%. Rates apply to the first $14,000 in wages, and new employers receive an industry-based entry rate until they qualify for an experience rating after 3-4 years.
Employers not yet eligible for an experience rate pay 2.7% (or 5.55% for construction), and eligible employees can receive up to $637 per week for up to 16 weeks after a one-week waiting period. The Kansas Department of Labor administers the program.
Shared Work Program
Instead of layoffs, employers with a positive account balance may reduce employee hours, allowing workers to receive partial unemployment benefits while retaining their jobs.
Missouri levies unemployment insurance tax on the first $10,000 of wages, with the taxable wage base adjusting based on the fund balance. New employers, including construction, pay 2.376%, while nonprofit and government employers pay 1.0%, and benefits can reach up to $320 per week for 20 weeks.
Employers may qualify for lower rates through experience or by acquiring a business, and Missouri applies surtaxes or reductions depending on the fund balance. The Division of Employment Security oversees the program.
Shared Work Program
Employers may reduce employee hours instead of laying off staff, enabling workers to receive partial unemployment benefits along with wages for hours worked.
Workers' Compensation
Kansas requires non-agricultural employers with more than $20,000 in non-family payroll to provide workers’ compensation coverage. Employers can secure coverage through private insurers, by becoming self-insured, or by joining a qualified group-funded pool, with premiums based on occupation-specific rates per $100 of payroll.
Injured workers generally receive 66.67% of their weekly wage, up to $804 per week with additional benefits for permanent disability or death. Kansas maintains one of the lowest premium rates in the nation, funded through annual assessments that support administrative costs and the Workers’ Compensation Fund.
Missouri requires employers with five or more employees—and all construction employers with at least one employee—to provide workers’ compensation coverage. Coverage can be obtained through private insurers or self-insurance, with premium rates varying by occupational risk and an employer’s injury history.
Injured workers typically receive two-thirds of their average weekly wage, up to $1,228.04 per week with additional benefits for permanent impairment or death.
Employers also pay premium taxes and surcharges to support administrative costs and the Second Injury Fund, though these charges may be reduced depending on fund balances, and Missouri provides resources to help employers compare insurance rates.
Here to answer your questions
Our project managers and research team are here to provide more detailed information about taxes and incentives.
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