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House votes down measure to prevent city class action tax lawsuits against employers

House Bill 2242, sponsored by Rep. Robert Cornejo, would have prevented local governments from joining class action lawsuits on tax issues. The bill was rejected on a vote of 39 in favor and 111 opposed.

Currently, cities are joining together in class action lawsuits on taxes that are imposed by ordinance, such as local gross receipts taxes. These ordinances vary from city to city – some apply their taxes to different items and some are simply worded differently. Such differences should prevent the local governments from obtaining “class action” status under today’s law because they lack “commonality” – but such cases are proceeding.

“HB 2242 would have helped protect employers and their customers/ratepayers from aggressive plaintiffs’ attorneys that are engaging in these class action lawsuits in hope that some of their unfounded claims will be sustained by a court and give them a big paycheck,” said Ray McCarty, president/CEO of the Associated Industries of Missouri. “It is appalling our elected representatives in the Missouri House sided with city leaders instead of the taxpayers that elected them,” said McCarty.

To see how your Representative voted, check the roll call vote here.

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