Updated June 14, 2024:

The Collector of Revenue and the City of St. Louis have agreed to a settlement allowing non-city residents to collect their earnings tax refunds for teleworking days from 2020 through 2023, reversing its prior position.

In March 2021, Plaintiffs’ attorneys Mark C. Milton and Bevis Schock sued the City of St. Louis and Gregory F.X. Daly, the City’s Collector of Revenue, challenging their refusal to issue earnings tax refunds to non-city residents working outside the City during the COVID-19 pandemic.

On March 13, 2023, the trial court judge, the Honorable Jason Sengheiser, ruled in Plaintiffs’ favor. The Collector and the City appealed. Fifteen months later, with the Court of Appeals having affirmed trial court ruling, the Collector and the City have agreed to pay not just the individual plaintiffs their refunds, but have agreed to pay everybody for all their remote work throughout the pandemic. They have waived the statute of limitations back to tax year 2020. They have also agreed to pay statutory interest (difficult to calculate).

Per terms of the settlement, the Collector will establish a claim process for refunding earnings paid on earnings from “remote work” which is defined as salary, wages, commission or other compensation paid for work done for a St. Louis-based employer where the employee was not physically present for any part of a day within the City limits of the City of St. Louis.

For employees, the Collector will honor any properly documented request for a remote work refund for earnings tax paid in the tax years 2020, 2021 and 2022, plus interest, as long as the refund request is filed between July 1st, 2024, and October 1st, 2024. Requests for refunds for remote work for the tax year 2023 are due by April 15th, 2025.

The Collector has changed its refund form (Form E-1R) to allow for refunds for teleworking days. The refund form is available on the City’s website:  Form E-1R

Taxpayers interested in pursuing their eligible refunds should consult with their own tax/legal advisors. Due to the anticipated volume of refund requests, at this time Messrs. Schock and Milton will not be consulting with and/or taking on any additional clients who are seeking refunds.

City of St. Louis Earnings Tax Lawsuit Background

As authorized by state and local laws, the City of St. Louis collects a 1% earnings tax on nonresidents for “work performed” or “services rendered” in the City.

Employers based in or with offices located in the City are required to withhold this 1% tax from their employees’ pay throughout the year.

In Boles, et al. v. City of St. Louis, et al., Plaintiffs said they worked remotely during most of 2020 and sought refunds from the Collector of Revenue based on the number of days they spent working outside the City of St. Louis. The Collector denied their refund requests, stating that the City was no longer allowing refunds for work performed remotely outside the City.

For several years before the COVID-19 pandemic, Plaintiffs worked remotely outside the City limits for City-based employers, and the City always refunded a portion of the earnings tax withheld from pay based on the number of days worked outside the City.

Then, the City reversed course in early 2021 and denied refund requests, stating that employees should be treated as working in their original place of work for purposes of the City’s earnings tax.

The City has historically not imposed the earnings tax on non-city residents for days spent working outside the city, regardless of reason, because it is statutorily and constitutionally prohibited from doing so. The City and the Collector knew this legal reality yet continued taking the position they can keep taxes unlawfully collected from non-city residents.

The settlement resolves the Boles matter, and Parties agree not to seek any further review of the decision of the trial or appellate courts on any issue in Boles.

Here is a link to the full settlement agreement:  SETTLEMENT AGREEMENT

Bevis Schock & Mark Milton have teamed up to defend Missouri citizens against government overreach. Due to budgetary restraints, state and local governments have become much more aggressive with tax assessment and collection efforts. The Attorneys have extensive experience representing clients before state and local taxing authorities and defending against and challenging Government agencies

The choice of a lawyer is an important decision and should not be based solely on advertisements.