SUMMARY

The City of St. Louis has reached an agreement with the plaintiffs in Boles v. City of St. Louis, Case Number ED 111495 in which the Collector of Revenue of the City has agreed to process refunds for Earnings Taxes paid by or on behalf of employees who worked outside of the City beginning with the pandemic year 2020 through 2023. The City also has agreed to process refund of Payroll Expense Taxes paid by employers with respect to such employees.

The Earnings Tax is imposed at a rate of one percent of the compensation paid to employees residing outside of the City for work performed inside of the City. Historically, the City provided refunds of Earnings Tax withheld by employers when employees worked outside the City (whether from their home or other locations outside the City). The City changed its interpretation of the law during the Pandemic and denied refunds where employees worked from a home outside of the City.

The Payroll Expense Tax is imposed upon employers at a rate of one-half of one percent of the compensation paid to employees residing outside the City for work performed inside the City. As with the Earnings Tax, the City did not historically impose the tax with respect to time spent by employees working outside the City and changed its interpretation to impose the tax when employees worked from a home outside of the City.

After having its pandemic driven interpretation of the Earnings Tax law rejected by both the St. Louis City Circuit Court and the Missouri Eastern District Court of Appeals, the City has agreed to pay refunds of both Earnings Tax and Payroll Expense Tax with respect to compensation paid to employees working from home. The City will pay refunds for all requests that have been denied since 2020.

Those who have not filed refund requests may do so (even though they would otherwise be technically outside the statute of limitations) for the 2020-2023 period between July 1 and October 31, 2024.