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City will refund earnings tax for remote work

By Ray McCarty, president/CEO, Associated Industries of Missouri


June 14, 2024 - We told you previously the Eastern District Court of Appeals issued a decision May 28, 2024, in the St. Louis City Earnings Tax challenge, holding the tax does not apply to work done outside the city limits. The lawsuit was brought by plaintiffs Mark Boles, Nicholas Oar, Kos Semonski, Christian E. Stein, II, Marc S. Kolaks, and Raymond T. Jaeger.


Multiple news outlets this morning are reporting St. Louis City will refund earnings tax on remote work.


The St. Louis Business Journal quotes City Collector of Revenue Gregg Daly from a statement:

"We respect the Court’s decision and have put in place a simple process compliant with the Court’s order. Our goal is to provide a transparent and easy-to-understand process for people to make first-time refund applications for remote work for the years 2020, 2021 and 2022. We have waived the statute of limitations for a 90-day period starting July 1, through September 30, 2024 to allow eligible taxpayers to apply for a refund for those three tax years. More information will be available by July 1 on the collector’s website.”


Associated Industries of Missouri tried to work with the St. Louis Collector of Revenue Gregg Daly since the beginning of the pandemic to ensure the tax was not collected from people that performed their work entirely outside the city limits. At the time, the City of St. Louis had mandated everyone work from home. When those homes are located outside the City of St. Louis, there should have been no earnings tax liability. The City of St. Louis did not agree and, although they allowed credit for work performed outside the city when traveling or for temporary reassignments, they did not allow credit for working from home on a regular basis. Kansas City allowed the credit for work from home during the pandemic.


In upholding the lower court ruling, the Eastern District Court of Appeals held:


"In sum, this Court interprets the Ordinance term 'in' to mean the work or 'services performed or rendered' must be done in the geographic parameters of the City. Consequently, the earnings from qualifying work or services completed by nonresident Employees when they work remotely outside of the City are not subject to the earnings tax. Therefore, Employees were entitled to judgment as a matter of law..."


To read the full decision, you may CLICK HERE. The City Collector website did not have the refund forms available as of the time we are posting the article, but we assume they will be posted on the City's Earnings Tax page HERE.



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