Payroll tax verdict unlikely to quell complaints

ST. LOUIS COUNTY, MO (KTVI) – St Louis City won the first round in a legal challenge to its 30-year-old payroll tax.

Voters authorized the .5% tax on city company payrolls in 1988. A lawsuit challenged the city on whether the tax was constitutional.

Plaintiffs also asked a judge to throw out a city ordinance that permits tax refunds to companies that hire new workers and redevelop their business properties.

"It's a big deal. It's a revenue source of about $38 million," said St Louis City Tax Collector Greg F.X. Daly.

"There is no authorization by the Missouri General Assembly for this half a percent on top of the earnings tax," said Bevis Schock, attorney for the plaintiff.

Schock plans to appeal on behalf of his clients who say they have not received any benefit or tax refund when they renovated their business property.