EDWARDSVILLE, Ill. – An Edwardsville resident claims it is unjust that the City of St. Louis charged him a 1% earnings tax even though he does not live or work in the city. City workers are responsible for paying the earnings tax.
German Rivera was required to work virtually and remotely for his job with the federal government, which resulted in him working from his home in Edwardsville for the years 2020, 2021, and 2022.
Regardless, the St. Louis Collector of Revenue deducted $1,000 from his check in 2021 and another thousand in 2022.
“I filed a return with the City of St. Louis to claim the nonresident portion of the earnings taxes collected while I was working from home, and the city denied it,” Rivera said. “This is simply a case where we are going to allow the city or any taxing authority to retain money that were deducted from your pay where you are a nonresident who worked outside of the city.”
“Anybody who works in the city or lives in the City of St. Louis is required to pay the 1% earnings tax,” said Greg Day with the St. Louis Collector of Revenue. “That 1% earnings tax generates about $250 million a year for the City of St. Louis that goes straight to general revenue.”
Daly said even if someone works remotely, they still have to pay the earnings tax.
“The office of the Collector of Revenue has made a decision that regardless of whether or not you choose to work at home, or you came to the office you are headquartered in the City of St. Louis,” he said. “We are asking that those individuals pay that 1% earnings tax.”
Nonresident taxpayers filed a lawsuit against the city and won in court in January. A judge ordered the city to refund the 1% sales tax. The municipality filed an appeal.
Citizens then petitioned the Missouri Supreme Court to bypass the Court of Appeals and hear the case directly.
It’s a high-level case. According to lawyers for the citizens, this case could affect up to 100,000 nonresidents who were required to pay earnings taxes. They want the Supreme Court to allow the case to be heard as a class action lawsuit so that more people can be involved.
The Supreme Court recently advised citizens to follow the normal legal process. St. Louis values the 1% earnings tax. It brings in $250 million.