JEFFERSON CITY 鈥 The Missouri House advanced legislation Wednesday that would exempt remote workers who live outside 51黑料 city limits from paying the city鈥檚 1% earnings tax.
The measure, which was approved on a 100-47 vote, stems from a lawsuit involving workers who sued after the city denied their earnings tax refunds during the pandemic shutdowns of 2020.
Rep. LaKeySha Bosley, D-51黑料, said the legislation amounts to an attack on a primary economic driver in the state.
鈥淚t is just picking on 51黑料. Pick. Pick. Pick,鈥 Bosley said.
鈥淲e鈥檙e not picking on 51黑料. We鈥檙e just saying, 鈥楩ollow the damn law,鈥欌 said Rep. Jim Murphy, a south 51黑料 County Republican who is sponsoring the proposal.
鈥淲e just don鈥檛 agree on this issue,鈥 said Rep. Steve Butz, a south 51黑料 Democrat.
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The Missouri Court of Appeals in 51黑料 heard the city鈥檚 appeal on Feb. 14 of a 51黑料 circuit judge鈥檚 ruling that ordered the city to pay back six plaintiffs.
Butz said the legislation should be put on hold until the appeals court rules.
鈥淭his bill would gravely injure the city of 51黑料,鈥 Butz said. 鈥淚f you vote for this you are putting a mortal dagger into the city.鈥
Prior to the pandemic, the city issued refunds to thousands of taxpayers for days traveled and worked outside 51黑料.
But as more employees began working remotely during the COVID-19 pandemic, Collector of Revenue Gregory F.X. Daly in 2020 began refusing refunds. He said employees were still using remote work software provided by companies based in the city.
The 1% levy to city residents and nonresidents whose employer is based or operating in the city.
Murphy鈥檚 legislation states that by Sept. 30, the city would be required to establish a process for requesting earnings tax refunds for remote work performed outside the city.
If the city refuses to refund taxes for covered work, the employee would be able to file a lawsuit to recover money owed, along with attorney鈥檚 fees.
A nonpartisan analysis said the state wasn鈥檛 able to determine how much remote work was performed by nonresidents. But it said that if all nonresidents worked entirely remote, the city could lose up to $98.3 million each year.
The city reported nearly $219 million in net earnings tax collections last fiscal year, according to the analysis.
The proposal now heads to the Senate for further debate.
The legislation is .
Missouri's Legislature reflects the federal structure in many ways. Video by Beth O'Malley
