Update: St. Louis May Not Honor Earnings Tax Refund Requests

Update: St. Louis May Not Honor Earnings Tax Refund Requests

As recently as last month, it appeared that those working from home outside the city limits of St. Louis and Kansas City would qualify for a refund of some of their earnings taxes.

A subsequent piece in The Kansas City Star backed up my post. The Star reported:

City councilwoman Katheryn Shields, chair of the finance, governance and public safety committee, said the city didn’t have any plans to curb its longstanding refund process.

“The money is collected as usual, but then it’s upon the taxpayer to then reach out to the city and ask for a refund,” she said.

But this is apparently not the case in St. Louis. According to a piece in the St. Louis Post-Dispatch:

If you’ve worked from home in the suburbs during the recent coronavirus shutdown instead of driving to your office in the city, don’t expect a break from paying the St. Louis earnings tax.

City officials say telecommuters staying home due to the pandemic won’t be eligible to file for refunds of the 1% earnings tax for days they’re not at their desks inside the city limits.

The story suggests there may be court challenges to this position from members of the Associated Industries of Missouri, and Clayton attorney Bevis Schock is quoted as saying he strongly expects to file a class action suit next year if the city does not issue refunds. (Disclosure: Schock is a member of the Show-Me Institute’s Board of Directors.)

Researchers at the Show-Me Institute have argued for years that the earnings tax harms cities. But since both cities have chosen to keep the tax in place, they both ought to honor their policy of issuing refunds for days spent working outside city limits.