Hotels must be registered and licensed to do business in Kansas City, Missouri. The first step is to submit a Registration Application (Form RD-100).
Form RD-100 can be submitted electronically on Quick Tax or in person to the Business License Office at 1118 Oak Street, Kansas City, Missouri 64106. A Zoning Clearance is required.
Other clearances and permits may be requested, depending on whether food or liquor will be served on the hotel premises. The City's Regulated Industries Division requires various applications, clearances and permits. For instance, for the sale of cigarettes, a cigarette application and license must be obtained. For the sale of alcohol, a liquor license must be obtained from Regulated Industries and a clearance letter issued by Revenue staff.
If hotel prepares food on the premises, a Food Establishment Permit Application is required by the City's Health Department. One application has to be completed for prepared food and one for packaged food. Contact the Health Department for further inquiry of needed licenses and permits.
Once the application is processed, the appropriate tax accounts will be created and you will receive a notice listing your account numbers to reference on returns you file and when communicating with the Revenue Division.
Convention and Tourism Tax - Hotels, Motels, and Tourist Courts
Form RD-106 is used by hotels or motels to file and pay the Convention and Tourism (C&T) Tax of 7.5% on the amount charged for sleeping rooms. The tax applies to all sales or charges paid by transient guests for a sleeping room and its furnishings and for the services accompanying the use of the room. It includes use of all items and services that are connected with or incidental to the rental of the sleeping room.
Rooms rented to non-transient guests are not included in the tax. A non-transient guest is a person who occupies a room in a hotel, motel or tourist court for 31 days or less during any calendar quarter.
The tax should be separately stated on a customer’s bill, similar to sales tax. Form RD-106 should be filed with the same frequency used for remitting state sales tax. Remittances can be made electronically on Quick Tax or by using Form RD-136.
The C&T tax of 2% on prepared food items is paid separately on a different tax form (see the Convention and Tourism Tax - Food section below for more information).
Tips
- Charges for a room that is rented by a business (i.e. an airline) may not be deducted from gross receipts as “non-transient” (businesses do not qualify as “permanent guests”).
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Room service charges are subject to the C&T tax of 2% on prepared food - provided the charges are separately stated (if not, subject to 7.5% room rate)
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Complementary food – such as a continental breakfast – is not subject to the C&T tax on food (as the “price” of the food is included in the price of the room and thus subject to the 7.5% C&T tax on room charges). However, any “grab & go” food items prepared on premises are subject to the C&T tax on food.
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Arena Fees charged to the customer are subject to the 7.5% C&T tax rate on rooms.
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Bed and breakfasts and other lodging establishments with eight rooms or less are not required to charge the C&T tax on rooms, instead these charges would be reported on a normal business license.
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The only guests – other than “non-transient” guests – that are exempt from the C&T are employees of the federal government on official business.
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Cancellation charges are not subject to tax on rooms.
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Two percent (2%) of the tax due may be retained by the taxpayer if the tax is paid by the due date.
Resources
Code of Ordinances, Chapter 68, Article IX
Convention and Tourism Tax Regulations
Convention and Tourism Tax - Food
A Convention and Tourism Tax return must be filed for food sales if the hotel has a restaurant, or otherwise prepares food on the premises. Form RD-107 is the return used to file and pay the tax of 2% on prepared food items. This includes alcoholic beverages.
The tax should be added to customers' bills in a similar manner as sales tax. Form RD-107 should be filed with the same frequency used for remitting state sales tax. Remittances can be made electronically on Quick Tax or by using Form RD-137.
Tips
- “Preparation” is an expansive definition and includes heating of food, mixing and combining two or more food ingredients or repackaging food into serving-sized portions.
- Heating of food by the customer does not make the item subject to tax unless other food items are prepared on the premises.
- Some items are not subject to tax regardless if they are “prepared” or not (if those are the only “prepared” items sold). These items can be found in section 1.551-3 (B)(5)(a) – (f) of the Convention & Tourism Tax Regulations (page 11). If you sell “prepared” food items that are not included in this list then both the other “prepared” items and those listed are subject to the tax.
- Prepackaged food or drinks regularly sold with prepared food items are subject to tax.
- Two percent (2%) of the tax due may be retained by the taxpayer if the tax is paid by the due date.
Resources
Code of Ordinances, Chapter 68, Article IX
Convention and Tourism Tax Regulations
The Arena Fee is $1.50 per room daily charge on each sleeping room.
Form RD-206 is the quarterly return used by a hotel or motel to file and pay the per day Arena Fee on occupied rooms. This fee is generally passed on to customers. If added to customer bills, the fee should be separately stated similar to the sales tax and becomes part of the hotel’s receipts and subject to the Convention and Tourism tax of 7.5%.
Bed and breakfasts and other lodging establishments with eight rooms or less are not subject to the Arena Fee. Instead, these charges would be reported on a business license.
Resources
Code of Ordinances, Chapter 40, Article II
