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July 26, 2023

Missouri Supreme Court declines to hear case on whether class action suit may be brought by St. Louis teleworkers owed earnings tax refunds

On July 20, 2023, the Supreme Court of Missouri (Supreme Court) declined to hear a request for class action certification in Boles v. City of St. Louis before the Missouri Court of Appeals had a chance to do so. The case was brought by employees seeking refunds of the 1% St. Louis earnings tax that was withheld from their wages during the COVID-19 emergency when they were working remotely outside of the city. (Boles v City of St. Louis: Cause No. 2122-CC00713.)

On January 3, 2022, the Missouri Circuit Court, 22nd judicial circuit (trial court) declined to certify a class action in Boles v. City of St. Louis although the trial court ruled in January 2023 that individual plaintiffs filing suit were entitled to refunds of the earnings tax withheld in 2020 and beyond (see Tax Alert 2023-0351).

In the request to transfer the class action certification directly to the Supreme Court, the plaintiffs explained that the potential refund amounts "are vast, around $150 million using numbers the City stated in the aftermath of the Circuit Court decision" and that absent certification of a class action, "there is no practical and realistic remedy at law … it makes no sense for tens of thousands of taxpayers to file individual suits for a few hundred dollars each … "


In tax years 2018 through 2020, Boles and similarly situated plaintiffs, who were St. Louis nonresidents, worked most of their time outside of the city for a St. Louis employer. Their employers withheld the earnings tax on 100% of their wages. For tax years 2018 and 2019, the plaintiffs applied for, and received, refunds from the City of St. Louis on those wages attributable to days worked outside the city.

With no change in the law, in 2021 the city refused to issue earnings tax refunds for tax year 2020 to Boles and the other plaintiffs on the argument that "services rendered" under Chapter 5.22 means services provided to a St. Louis employer, or customer and the employer, that received the benefit of the services and was at all times located within the city. The plaintiffs argued that "services rendered" means work physically performed in the city, an interpretation the city itself had adopted until tax year 2020.

In the January 2023 decision, the trial court agreed that the plaintiffs were owed refunds of the earnings tax for 2020 and beyond, further noting that the sudden change in interpreting the City Code without formal rulemaking was aligned with the timing of the COVID-19 emergency and likely was driven by concerns over how increasing telework would affect the city's budget.

Ernst & Young LLP insights

Although the trial court agreed that employees working outside of St. Louis for a St. Louis employer are not subject to the earnings tax, the question still remains whether their refund claims can be brought as a class action. Without a class action, individuals would have to separately file lawsuits.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor