Working in KC

Kansas City has numerous advantages for companies looking to start a business or expand. With a diversely skilled workforce, affordable cost of living, and a world-class electric and technology infrastructure, Kansas City can provide for any company’s needs.

From brainpower to electric power, here are some of the key factors making Kansas City a great place to work, stay and grow.

Workforce

Employers in Kansas City, Missouri, have access to a large, capable workforce, and our community offers many opportunities for career training and education.

• We are at the center of a metro area with a labor force of more than 1 million and total population of more than 2 million.
• From 2000 to 2009, metro population grew 12.2%, compared to a national rate of 8.8%.
• 32% of the metro area population has a four-year degree – 5% higher than the national average – and 90% of residents over 25 are high school graduates.
• Each year, the Kansas City job market is a magnet for more than 100,000 college graduates from regional colleges and universities.
• Metro-wide, the Information Technology workforce numbers more than 34,000, and area universities and colleges produce more than 1,000 IT graduates each year.
• Kansas City is looking to the future by investing in the 21st century workforce, including programs and initiatives supporting training and education for target industries like manufacturing, logistics, and life sciences.
• Our city offers a diverse workforce with the qualities and skills many companies are looking for to compete in the global marketplace.
• According to the U.S. Census Bureau, production workers in Kansas City contribute 40% more value added per hour than the national average.
• According to the National Center for Health Statistics, Kansas City workers took fewer sick days than workers in 33 major metros, and placed third for overall health of residents.

Affordability

Kansas City offers lower cost of living than most major metro areas and is consistently ranked among the most affordable major markets in which to live and operate a business.

• We offer one the most competitively priced energy markets in the country. In its winter 2007 report, Edison Electric Institute, which tracks average retail rates for investor-owned utilities, reported average rates per kWh of 5.74¢ in Missouri, compared to average rates in New York of 14.99¢/kWh in New York and 13.69¢/kWh in California.
• Kansas City is a cost-effective central location for companies with executives and employees who need to travel to widely dispersed clients and project sites.
• Our location and strong intermodal transportation network support cost-effective shipping and distribution.
• In 2009, the Kansas City metro area scored 95.7 on the cost of living index from the Council for Community and Economic Research (C2ER).

Electric and telecommunications infrastructure

Kansas City has a world-class telecommunications and electric infrastructure and is a point of convergence for transcontinental fiber and related communications networks.

• Transmission systems serving Kansas City are designed and built on “first contingency” basis, so the loss of any particular generator or transmission line has no effect on supplies across the region.
• In general, electric systems here are less interconnected and less densely populated than those on the East and West Coasts, and Kansas City is a very unlikely candidate for energy blackouts.
• KCP&L (Kansas City Power & Light), which serves more than 80% of the region’s customers, consistently ranks among the best at providing constant, uninterrupted electric service.
• The metro is home to Sprint’s world headquarters, and Sprint has deployed a set of four MAN (Major Area Network) rings throughout the Kansas City area, an architecture designed to provide self-healing capabilities during fiber cuts and electronic outages.
• The city’s state-of-the-art technology landscape includes a carrier hotel, 1102 GRAND, the largest carrier neutral facility in the Kansas City Metro area and one of the fastest growing of its kind in the Midwest.

Transportation and distribution network

Kansas City is the most geo-central major market in the nation and offers a robust multimodal transportation and distribution network.

• We are the largest rail center in the United States by tonnage and located at the center of a rail corridor spanning coast-to-coast and extending from Canada to Mexico (NAFTA Railway) with more than 300 trains arriving and departing each day.
• Kansas City has more Foreign Trade Zone space than any other U.S. city (over 10,000 acres).
• We have more underground warehouse space, which provides for a climate control conditions year round, than any U.S. city.
• Two intermodal logistics parks are currently under development in the Kansas City area with additional Class A industrial space being built on a speculative basis.
• The metro area has more freeway-lane miles per capita than any other U.S. city, and is one of only five U.S. cities where three interstate highways intersect (I-35, I-70, I-29) and soon to be fourth (I-49).
• We are the No. 3 trucking center in the U.S. with single-day truck access to nearly every major Midwestern market.
• Kansas City International Airport – which is ranked No. 1 among mid-sized airports for customer experience – offers 200 daily departures by 11 major airlines with non-stop flights to nearly 50 destinations.
• The Kansas City area moves more air cargo in a six state area than any other region in the U.S.

Low natural disaster area

Being centrally located reduces the likelihood KC-based operations will become a target for disruption.

• If a disruption occurs, Kansas City is within a day’s driving distance of a number of metropolitan areas that could support temporary relocation and recovery plans.
• Historically, strong earthquakes have not occurred in the region, and the Kansas City area is subject to a relatively low threat of significant seismic activity.

Taxes & incentives

Missouri offers a generally favorable tax climate for businesses, ranking No. 16 in the nation on the Tax Foundation’s State Business Tax Climate Index for FY2010.

Your business may be eligible for tax credits, exemptions, or special financing through a number of incentive programs. These include:

• Enhanced Enterprise Zone – EEZ incentives are designed to encourage job creation and investment by providing tax credits and local property tax abatement to new or expanding eligible businesses located in an EEZ.
• Machinery & Equipment – Some manufacturers are eligible for discretionary programs to reduce or eliminate sales or property tax on machinery and equipment.
• Missouri Quality Jobs – If your business creates 100 new jobs in two years, within certain wage and benefit parameters, you may qualify for tax credits equaling 7% of the new payroll for five years. If your small/expanding business creates 40 jobs in two years, you may qualify for retention of payroll withholding taxes for five years.
• New Jobs Training Program – A portion of the payroll withholding tax (approximately 2.5% for the first 100 jobs) generated by a new employer for approximately eight years is used to generate a bond that can be used to offset training costs.

These are just a few of the incentives available to businesses in Kansas City, Missouri. The EDC coordinates Kansas City’s statutory redevelopment agencies, as well as the EDC Loan Corporation. Our staff has direct access and in-depth understanding of incentives and loans, and we work closely with the state of Missouri to package incentive proposals targeted to the needs of individual businesses.

If you have questions about available incentives, our expert team can help. Visit the Incentives & Loans page under Business Solutions for more information, or contact us today.

Below is an overview of business taxes in Kansas City, Missouri.

Corporate income tax

• 6.25% applied to Missouri taxable income
• 50% of federal income tax payments can be deducted before computing taxable income, leading to an effective rate of 5.2%
• Only income earned in Missouri is taxed
• Companies can choose from two income allocation formulas: 1) Three-factor formula: sales, property and payroll; or 2) Single-factor formula: based only on sales

Franchise tax

• 1/30 of 1% or $0.33 per $1,000 of par value of outstanding shares and surplus
• Based on assets as of the first day of the taxable year
• Multi-state corporations are subject to the tax only on that portion of total company shares and surplus in Missouri
• Asset threshold of $10 million

Sales and use tax

• Missouri levies a 4.225% sales/use tax on purchases other than retail sales of qualifying food items
• Qualifying food items are taxed by the state at 1.225%
• Local county and municipal sales taxes apply to food as well as other retail purchases

Sales and use taxes for Kansas City, Missouri, counties:

Earnings Tax
If you operate a business in Kansas City, Missouri, you must pay a 1 percent profits tax on the net profit of your business by filing a profits return with the Revenue Division by April 15 of each year or within 105 days of the end of your firm’s fiscal year. The earnings tax is a 1 percent tax on an individual’s earned income such as salaries, wages, commissions, tips and other compensation.