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Federal judge denies attempt to change St. Louis tax forms for non-residents

Federal judge denies attempt to change St. Louis tax forms for non-residents

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ST. LOUIS — A federal judge on Monday rejected an initial attempt to change the wording of city tax forms in an ongoing lawsuit filed on behalf of nonresidents working from home during the COVID-19 pandemic.

District Judge Catherine D. Perry denied a motion for a temporary restraining order that would have stopped the city from issuing the 2020 E-1R and E-1RV, which contain wording that asks the filer to confirm that they “understand that a regular workday does not include holidays, vacation, working remotely from home or other work absences.” Instead, the motion sought to force the city to return to tax forms used in previous years that don’t contain such language.

The motion was filed as part of a lawsuit that aims to recoup a 1% city earnings tax paid by employees who worked outside city limits.

In past years, St. Louis has allowed refunds for employees on days they worked outside city limits. But the policy changed last year, when thousands of workers began to work from home during the coronavirus pandemic. If the tax refunds were granted to all of those who worked from home, it could mean millions of dollars in lost city revenue. More than a third of the city’s general revenue comes from that earnings tax.

The lawsuit was submitted in March by St. Louis County residents Mark Boles and St. Charles County residents Nicholas Oar and Kos Semonski, who, in a typical year, submit refund applications to the city because they work remotely and not in city limits. However, when they submitted the same form for the 2020 tax year, they were denied and told the policy changed in January 2020.

About $180 million in city revenue came from the 1% earnings tax last year. The lawsuit states an estimate that 75% of earnings tax revenue come from nonresidents.

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