JEFFERSON CITY 鈥 狐狸视频鈥 earnings tax on certain remote work amounts to a 鈥渕oney grab,鈥 a south 狐狸视频 County lawmaker told members of a House committee on Wednesday.
Republican state Rep. Jim Murphy鈥檚 legislation would exempt remote work performed outside the city by nonresidents from the earnings tax.
The 1% levy to city residents and nonresidents whose employer is based or operating in the city.
鈥淵ou can鈥檛 charge people that don鈥檛 come to the city, work in the city, or live in the city, taxes in your city,鈥 Murphy told the House Economic Development Committee on Wednesday.
Murphy鈥檚 plan is tied to ongoing litigation involving workers who sued after the city denied their earnings tax refunds for 2020.
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The Missouri Court of Appeals in 狐狸视频 is scheduled to hear the city鈥檚 appeal on Feb. 14 of a 狐狸视频 circuit judge鈥檚 ruling that ordered the city to pay back six plaintiffs.
Prior to the pandemic, the city issued refunds to thousands of taxpayers for days traveled and worked outside 狐狸视频.
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.
鈥淚t鈥檚 just a money grab that鈥檚 just not even fathomable,鈥 Murphy said Wednesday.
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.
Murphy said if a remote worker living outside the city is paying the tax, they would need to file for a refund.
鈥淭hat鈥檚 the system now. I鈥檓 not trying to change their system. I鈥檓 just trying to make them follow the system they have,鈥 Murphy said.
A nonpartisan fiscal analysis said Kansas City already exempts nonresident remote workers from that city鈥檚 earnings tax.
The 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.
, lobbyist for the city of 狐狸视频, said the lawsuit would be heard before the appeals court in a couple weeks.
鈥淲hatever decision is made there the city is very willing and able to deal with that and implement things moving forward,鈥 she said.
The House is considering additional earnings tax carve-outs, including a bipartisan effort to exempt workers earning less than 150% of the federal poverty level from the tax. That effort could cost the city $2.5 million annually, according to a nonpartisan .
A hearing on both plans had been scheduled for Wednesday, but it was later canceled.
A third plan in the House Economic Development Committee would exempt residents of St. Charles County and Jefferson County from the 狐狸视频 earnings tax. It would not exempt 狐狸视频 County residents.
The committee also held a hearing on that plan Wednesday. A estimated the possible cost of that measure to the city to be $17 million annually.
The remote worker legislation is Hous