Known by about a dozen different terms across the country, what is most commonly acknowledged or referred to as a "Business License" is a bit of a misnomer. A "License" usually entails some regulatory control over a specific activity, or pre-qualifying criteria, credentials or testing, to engage in the activity (e.g. possessing the educational qualifications to be a massage therapist or being old enough to operate a drinking establishment). While there may be associated inspections and approvals for where a business may operate, most business activities do not face regulatory oversight.
All entities engaging in a business activity in Kansas City, KS do need to register and file the occupation tax application. In addition to the occupation tax, some business activities do also require a regulatory license or permit.
The occupation tax is assessed by the Unified Government for the privilege of doing business in our jurisdiction, whether the business is physically located in the city or not.
Some businesses are exempt by ordinance within specific criteria, to include but not limited to: Business individually operated by a blind person, Attorney's for the occupation of attorney, Agricultural growers for products grown and sold within the state, Milk product production, Motor Vehicle fuel sales, Organizations operated wholly for charitable, religious, benevolent, fraternal, civic, educational- from which profit is not derived by any individual, Organizations qualified by the I.R.S. as 501(c)3. Exempt entities still file with our office under the qualifying exemption. Sec. 34-37 Exemptions
The occupation tax ordinance is based on the North American Industry Classification System (NAICS) codes, which are designed by the Federal government to classify and describe every imaginable business type. The Unified Government occupation tax ordinance assigns an annual fee to each of these codes, based on one of several possible factors, with examples below.
All retail, wholesale, manufacturing, processing, and warehousing businesses are assessed a fee based on the physical size of their facility.
Number of Employees
Banks, insurance agencies, security guard services, employment agencies, engineering firms, and others are assessed a fee based on the number of people they employ or credentialed professionals.
Construction, Building Services, Educational, Support, and Technical services are assessed flat fees prescribed by the ordinance.
Number of Units
Taxi/Livery services, automobile tow services, hotels and motels, trash removal services, and a number of other businesses are assessed a fee based on the number of units operated or controlled by them.