Missouri LLC Taxes

All limited liability companies (LLCs) in Missouri are taxed as pass-through entities by default. This means that the revenue and losses of the LLC will flow through the business to the members (owners), who will claim the LLC’s income on their personal tax return(s). A single-member LLC (SMLLC) is taxed as a sole proprietorship, and a multi-member LLC is taxed as a partnership.

Missouri LLCs are taxed the15.3% federal self-employment tax rate (12.4% for social security and 2.9% for Medicare).Federally, you would file:

• Single-member LLC—Form 1040 (usually Schedule C, but some SMLLCsfile C-EZ, E, or F)
• Multi-member LLC—Form 1065

Your Missouri LLC can also elect to change its tax status to either an S-corp or C-corp. Let’s go over what that would mean for your business.

Missouri LLCs taxed as S-corp

While an LLC with S-corp election has the same pass-through entity status as a default LLC, filing as an S-corp could save your members money on taxes. Under default status, all LLC income is taxed at the 15.3% self-employment rate. An S-corp member is also taxed at 15.3%, but only on salary– dividends made to members are not subject to the self-employment tax.

Check the IRS requirements for S-corps before deciding if this is a good fit for your business. You can also check with a CPA to see if this more complicated filing status is worth it in the long run for your LLC.

• S-corps—Form 1120-S

LLCs taxed as C-corp

C-corp tax status is the default tax status of a corporation. Some LLCs elect to be taxed as a C-corp because C-corps are eligible for more tax deductions and investors are typically more interested in C-corps. However, an LLC that elects to be taxed as a C-corp in Missouri will have to pay the 21% corporate income tax as well as the 4% Missouri state corporate income tax. Consulting with your CPA can help you decide if this is the right move for your business.

• C-corps—Form 1120

Learn how to apply for C-corp status as an LLC.

Missouri’s state income tax ranges from 1.5% to 5.3%. LLCs with default status or S-corp status will pay state income tax on the business’ revenue on their personal income tax forms.

Most LLCs will pay 5.3% on all taxable income over $8,968 (plus $291). If your LLC makes less than $8,968, you will likely qualify for a lower income tax percentage. You can check the most recent Missouri Tax Chart to see what your tax will be.

If your LLC is taxed as a C-corp, you will need to pay the 4% Missouri corporate income tax.

Missouri’s sale and use tax is 4.225%. In Missouri, sales tax is levied on purchases of tangible property or taxable service sold at retail, while use tax is imposed on storing, using, or consuming personal property—so your business will most likely only deal with sales tax.

The 4.225% state sales and use tax is used to finance four separate aspects of the Missouri state government: General Revenue (3.0 percent), Conservation (0.125 percent), Education (1.0 percent), and Parks/Soils (0.10 percent).

Each city and county in Missouri is allowed to levy its own taxes on businesses. However, Missouri imposes a maximum sales tax rate of 5.763%, and the average state and local sales tax is 8.29%. Additionally, some municipalities charge a local tax on certain businesses, goods, or services.

If you are employer, you will need to pay unemployment insurance and workers’ compensation taxes:

• Unemployment Insurance (UI) Tax—In Missouri, UI tax starts at a “new employer” rate for a business’ first two or three years. This rate is the same for all businesses in a particular field (for example, the 2023 general rate is 2.511% while the nonprofit rate is 1%). After an employer becomes eligible, an experience rate is calculated from the employer’s average taxable payroll, previous unemployment claims, and taxes paid in.
• Workers’ Compensation—Missouri employers must have workers’ compensation insurance if they have five or more employees (including LLC members). An exception to this are LLCs in the construction industry, which are required to have workers’ compensation insurance if they have one or more employees (including LLC members). While rates change depending on your business’ size, risk level, and other factors, workers’ compensation rates typically start at $1.11 per $100.

Industry Taxes

The Missouri Department of Revenue (DOR) levies taxes on particular industries. This can be a general tax for the whole of the state or individual taxes sent to particular governmental agencies. For example, the Cigarette Tax sends 4.5 mills (with 1 mill averaging to 1/10 of a cent) to the State School Money Fund, 2 mills to the Health Initiatives Fund, and 2 mills to the Fair Share Initiatives Fund. Altogether, this is about 17 cents per one 20-pack of cigarettes.

Other industry-specific taxes include:

• Alcoholic Beverages Tax
• Tobacco Tax
• Marijuana Tax
• Motor Fuel Tax
• Tire and Lead Battery Tax

Check with the DOR’s Industry Tax Matrices to search for your particular industry to see if there are additional taxes for your LLC.

Yes. A Missouri foreign LLC (originally formed in a different state but now registered to do business in Missouri) is required to pay all the taxes a domestic LLC. This includes state income tax, sale and use tax, local taxes, and more. Check with your particular municipality to make sure that your LLC is following all state and local tax laws.