ST. LOUIS – A recently-filed lawsuit looks to recoup the earning tax individuals who work in St. Louis pay to the city if they have been working elsewhere. Since the 1950s, St. Louis City has had a tax of 1% for work performed or services rendered in the city. Meaning, if you work in the city, 1% of what you make goes to an earning tax.
“The way it has worked for many years is people who are employed in the city and aren’t residents have 1% withheld by their employer, the earing tax,” said Bevis Schock, the attorney who filed the lawsuit. “Then if they have worked a lot of days out of the city, if they have a lot of business meetings out of town, they can apply for a refund on the days they didn’t work in the city.”
Schock says for years those refunds have been paid out, but they were only about 2% of the total.
With COVID, many more people were working from home and not in the city, and when it came time for tax refunds Schock said things changed
“The city unilaterally decided to quit paying on the refunds, so a lot of people sent their refunds in and the Collector of Revenue wrote back and said I’m sorry we have changed our policy,” Schock said.
Aldermanic President Lewis Reed said the earning tax accounts for over a third of the city’s budget, around $177 million. He said the city can’t afford to lose all of that.
“It is a major part of us being able to provide basic services, public safety services, being able to pay for police services, being able to pay for firefighters, our roads street and bridges,” Reed said. “All the basic upkeep of the city. It runs the city. It is not something we can do without.”
Reed said they couldn’t replace the earing tax with a property tax because 40% of the land in the city is owned by tax exempt entities. So that would mean that 60% of the property owners would be picking up a massive amount to make up the difference.
Reed didn’t’ want to give his interpretation of the earning tax ordinance because of the pending litigation.
He said the lawsuit won’t affect what voters see on the ballot April 6 when it comes to the earning tax, and he hopes this lawsuit brings to light the importance of the earning tax.