Small Business Taxes
Guide to St. Louis Small Business Tax
Everything you need to know about small business tax in St. Louis
A big focus of your business plan will be your financial projections and budget section. In order to have a clear picture of your first year finances, it’s important to factor in any expenses as well as your specific state and city tax.
You can hire an in-house accountant or look for a small business CPA in St. Louis to determine your tax ID numbers to prepare. If you have prior knowledge or want to save on the costs of hiring an agency or individual, you can set up accounting software like Quickbooks to manage your business in its early stages.
St. Louis District Taxes
Small business taxes in St. Louis can vary by district. You’ll want to consult the most up-to-date resources like this one if you’ve already secured space. District taxes can vary from Downtown St. Louis to Cathedral Square, so make sure you note where your business is located to incorporate the appropriate district tax in your financial projections.
The variance in district property taxes in St. Louis is determined by Missouri’s assessment ratios. Missouri law sets personal property at one-third of true value throughout the state. Commercial and industrial properties are assessed at 32%, residential properties at 19%, and agricultural at 12% of market value.
The local property tax rate is cumulative of school, city, county and state taxes. Commercial and industrial property is calculated an additional Missouri county surcharge.
Missouri State Tax Types
Missouri’s tax structure is one of the most advantageous in the country as one that is responsible and reasonable. Missouri’s efficiently managed government means small businesses can thrive as a result of their comprehensive fiscal practices.
Depending on the size of your business, you might have to register for the additional tax types:
In order to register for small business taxes in St. Louis, you need to obtain an Employer Identification Number (EIN). This 9-digit number is also known as a Federal Tax Identification Number and is assigned by the IRS to new business units. This number helps the IRS to classify St. Louis taxpayers that are required to file business tax returns. EINs are used by employers, sole proprietors, corporations, partnerships, and other business entities.
In St. Louis, registering for an EIN is simple. You can apply online here or in person here:
Robert A. Young Building
122 Spruce Street
St. Louis, Missouri 63103
If you are selling a product, you’re required to obtain a Missouri State Sales Tax number. This number is assigned by Missouri Department of Revenue to recognize and accumulate state sales tax.
Like the EIN, this can be obtained online here or at the St. Louis address below:
3256 Laclede Station Road.
St. Louis, MO 63143
Once you’ve obtained EIN and SST numbers, you’ll need to know the Missouri taxes applied to your small business in St. Louis.
Corporate Income Tax
Generally, a business in St. Louis or other areas in Missouri will have a lower corporate tax rate than in other states. State law sets the corporate income tax rate at a portion of net taxable income grossed by a business in St. Louis or other areas. Additionally, Missouri permits a percentage of federal income tax payments to be subtracted before calculating taxable income.
Missouri Taxable Income
Taxable income varies from state to state, but a tax advantage for St. Louis businesses is that only income earned in Missouri is taxed. Calculating this income can be done in one of the two following ways:
Missouri is the only state that authorizes businesses to choose which formula to use, even if it ends in the less corporate income tax responsibility.
Real Property Abatement
Missouri encourages urban redevelopment through the tax incentive program Chapter 353. Under this Chapter, up to 100% of improvements to commercial property may be exempt from state and local property taxes for up to 25 years.
The additional state taxes in Missouri are:
In addition to local and state taxes, all businesses are required to pay the same federal taxes. Those can include:
As a business, keeping a record of payroll and tax documents is important, whether you go with a St. Louis accounting agency or a software. Documents you should always keep are income tax returns, copies of W-2 forms, general ledgers, and payroll records.
Understanding St. Louis small business tax is the first step toward making a profit in your new business. Make sure you research the financial options you have for starting a small business.