What taxes apply to a new small business?

Taxes Applicable to a New Small Business in Missouri

Starting a new small business in Missouri involves understanding and managing several key tax obligations. Proper tax compliance supports smooth operations and avoids penalties.

State-Level Taxes

• Missouri Income Tax: Businesses operating as corporations, LLCs, or partnerships must file Missouri income tax returns. Income is taxed at rates varying by income brackets.
• Sales Tax: If your business sells tangible goods or certain services, you must collect and remit Missouri sales tax. Registration with the Missouri Department of Revenue is required to obtain a sales tax license.
• Use Tax: Use tax applies on goods purchased out-of-state but used in Missouri when sales tax was not paid.
• Employer Payroll Taxes: If you hire employees, you are responsible for withholding Missouri state income tax from wages and paying state unemployment insurance taxes.

Local Taxes

Local jurisdictions in Missouri may impose additional sales taxes or business license taxes. Check with city and county offices where your business operates for specific requirements.

Federal Taxes

• Federal Income Tax: All businesses must file federal income tax returns based on their legal structure.
• Payroll Taxes: Employers must withhold federal income tax, Social Security, and Medicare taxes from employee wages and remit employer portions.

Operational Considerations

• Register Early: Register your business with the Missouri Department of Revenue to obtain necessary tax accounts and permits.
• Maintain Accurate Records: Keep detailed bookkeeping records for income, expenses, and payroll to ensure accurate tax reporting.
• Use Automation: Consider payroll and accounting software to automate tax calculations and filings.
• Stay Updated: As of 2026, tax rates and filing requirements may change. Regularly review Missouri Department of Revenue updates.