St. Louis remote workers fight for earnings tax refund

A St. Louis city attorney argued in court that payers of the city earnings tax who worked from home last year would each need to file individual lawsuits against the city if they want refunds. A lawyer for St. Louis Collector of Revenue Gregory F.X. Daly argued that a lawsuit seeking class action should be dismissed because those taxpayers must file individually for refunds under a Missouri law governing tax disputes. But attorney Mark Milton, representing several plaintiffs who say they were denied tax refunds for days they worked outside of the city last year, said his clients never had the ability to file a protest under that law. The collector announced a policy change halfway through the year, and they had expected to receive refunds based on an end-of-year form they had submitted to the collector in prior years, Milton argued.

The arguments were the latest in a case that could have major consequences for the city’s budget — more than one-third of which comes from the 1% earnings tax paid by residents and those who work in the city but live elsewhere. Milton and attorney Bevis Schock filed suit in March, alleging the city collector’s office, worried over the millions in revenue at stake because of the pandemic, stopped its past practice of paying refunds to people who worked remotely.

Milton pointed to Kansas City, the only other Missouri city with an earnings tax, which is not contesting teleworking refunds and processing a backlog of claims due to the pandemic. St. Louis aldermen, Milton said, could have changed the refund ordinances. “You can’t just, as an executive, change the law,” he said. But David Luce, representing the collector, said the office’s job is both to collect the earnings tax and decide when it applies.

St. Louis Circuit Court Judge Christopher McGraugh could issue a ruling soon on the city’s motion to dismiss.

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