St. Louis Ordered to Refund Remote Workers’ Earnings Tax: City Faces Millions in Individual Claims After Appeals Denied

Missouri Appeals Court Rules St. Louis Must Refund Remote Workers’ Earnings Tax Paid During COVID-19

St. Louis Faces Millions in Refunds After Court Denies Class Action Suit for Remote Workers’ Earnings Tax

According to Audacy, in a significant ruling on Tuesday a Missouri appeals court reaffirmed that St. Louis must refund remote workers’ earnings tax who lived outside the city during the COVID-19 pandemic. The decision came after the city lost a lawsuit in 2023 for improperly denying these remote workers’ earnings tax refund. Attorney Mark Milton representing the remote workers expressed satisfaction with the court’s decision. He stated “The opinion talked about how the language is clear and unambiguous which has been our position all along. That’s how the collector has always interpreted it prior to COVID and there’s been no change in the law.”

However, there was a setback for Milton and the workers. Their effort to turn the lawsuit into a class action suit was denied. A class action suit would have allowed all affected workers to seek refunds collectively potentially costing the city millions of dollars. Milton voiced disappointment saying “We’re somewhat disappointed that the appellate court did not revive our efforts to get class action to get relief for everyone who’s been harmed.” The city had previously expressed concerns about losing revenue from remote workers. In March St. Louis Mayor Tishaura Jones initiated a hiring freeze on non-essential personnel to address budget concerns. This freeze was lifted on May 20. The Missouri House passed a bill to exempt St. Louis remote workers from paying the one percent earnings tax but the legislative session ended without the bill becoming law.

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 St. Louis Ordered to Refund Remote Workers’ Earnings Tax: City Faces Millions in Individual Claims After Appeals Denied (PHOTO: Spectrum News)

St. Louis to Refund Remote Workers’ Earnings Tax Without Impacting 2025 Budget, Says Mayor Jones

Furthermore, in response to the court ruling Mayor Jones’ Office issued a statement saying they are reviewing the decision. The statement also emphasized that the ruling would not require changes to the 2025 budget. Mayor Jones had previously indicated that the 2025 budget would be conservative due to potential financial impacts from such decisions. “In creating the 2025 budget proposal, the mayor took a financially prudent approach to take into account the potential impact of (Tuesday’s) decision” the Mayor’s office wrote in a statement to KMOX. “We do not believe this decision will require changes to the budget or will impact the current level of City services.” The appeals court’s decision marks a crucial point in the ongoing issue of tax refunds for remote workers in St. Louis. While the city must now proceed with refunds the denial of class action status means each worker will need to seek refunds individually. The financial implications for St. Louis are still unfolding as the city navigates its budget planning for the upcoming fiscal year.

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