ST. LOUIS, Mo. – A lawsuit looking for refunds for the St. Louis earnings tax because of work-from-home situations during the pandemic is not moving forward. Court documents submitted to the US District Court for the Eastern District of Missouri by St. Louis Collector of Revenue Gregory F.X. Daly’s lawyers say that the lawsuit cannot proceed in federal court because it does not meet the Tax Injunction Act and “age-old principles of comity.” The plaintiffs then filed for dismissal.
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. This got a little complicated in 2020 because so many people were working remotely. But, they were still working for companies based in St. Louis.
St. Louis voters decided to keep the earnings tax by an overwhelming margin a week ago. The tax makes up over a third of the city’s budget. It is responsible for paying for basic services like police, fire, EMS, parks, trash collection, and more.
The plaintiff’s lawyer said that in the past, people could ask for an earnings tax refund if they prove they were not working in the city. Some people had requested the refunds but the city suddenly changed the policy after paying two percent of the total.