Remote Workers: Court Ruling Could Mean Tax Refunds on 1% St. Louis City Earnings Tax

Hey St. Louisians, if you worked from home during the pandemic, you might be in for a pleasant surprise.

A recent Missouri Court of Appeals decision has ruled that remote workers shouldn’t have been charged St. Louis city’s 1% earnings tax while working outside city limits. This ruling could mean tax refunds for many of us who worked away from the city, whether on business travel or working remotely from home.

While the decision might still face appeals, it’s a hopeful sign for those looking to get some of their hard-earned tax money back.

Background on the Case: Remote Workers Against St. Louis City Earnings Tax

The central issue revolved around whether non-residents, working remotely outside St. Louis City, should be subject to the 1% earnings tax.

Initially, a trial court ruled in favor of these remote workers, asserting that work performed outside city boundaries should not incur the tax. This decision has now been upheld by the Appeals Court.

Financial Implications for Remote Workers

So, what does this mean for the average remote worker? If you earned $60,000 while working remotely from outside St. Louis, you could be looking at a refund of around $600 for each year you were taxed. It’s a welcome bit of news for those who might have felt the financial pinch during the pandemic.

In total, the amount of money involved, based on city statements, is about $150 million over five years, noted Attorney Bevis Schock. That’s twenty-five million a year that may go back to taxpayers.

Impact on St. Louis City

The earnings tax is a significant revenue source for St. Louis, funding essential services like police, EMS, and parks.

St. Louis City Mayor Tishaura O. Jones’ office released a statement: “We do not believe this decision will require changes to the budget or will impact the current level of City services.”

Legal Perspectives

Attorney Mark Milton, who represented the plaintiffs alongside Schock, emphasized the clarity of the ordinance. “You are only liable for the city earnings tax when you are physically in the city working,” Milton said.

This interpretation of the ordinance has been affirmed by the lower court, city judge, and now at the Missouri Eastern District Court of Appeals.

Impact on Future Earnings Tax Legislation

This decision is part of a broader trend challenging the earnings tax. The Missouri State House recently passed a bill exempting remote workers from this tax, though it remains pending in the state Senate.

Reach Out for Guidance on Your St. Louis Earning Tax Refund

“From my perspective, this decision is about more than just money—it’s about ensuring that our tax system is fair and just for everyone,” said Christian Stein, senior accountant at Smith Patrick CPAs and a plaintiff in the case.

This case underscores the evolving landscape of taxation in the era of remote work, and its outcomes will be closely watched by our team at Smith Patrick.

Stein recommends that people in a similar situation keep an eye on this case and get in touch with him at: https://smithpatrickcpa.com/contact.