Earnings Tax Maintained in St. Louis and Kansas City

Date: April 20, 2016

Voters approve; Senate backs off repeal attempt.

Earnings Tax Maintained in St. Louis and Kansas City

St.
Louis’ and Kansas City’s earnings tax has been a source of contention this
spring, but resolution came earlier this month when Senate President Pro Tem
Ron Richard said he wouldn’t pursue any of the bills filed in the House or
Senate seeking to kill the tax in either city. Sen. Richard’s announcement came
just a day after voters in both cities overwhelmingly approved the tax’s
renewal.

 The
1 percent tax is levied on the earned income of residents and anyone who works
in the city, and state law requires that voters must renew the tax every five
years. This year, according to the Missouri Times, voters in St. Louis
approved the tax by 72 percent, and voters in Kansas City approved it by 77
percent. The tax accounts for 30 to 40 percent of the cities’ revenue and funds
services like fire and police.

 The
main concern against the tax is that it hampers growth in the cities. Rep. Kirk
Matthews, one of the legislators who filed a bill to repeal the tax and got it
through the House Emerging Issues Committee, also told the Missouri Times
that he believes most of the people who have to pay the tax don’t get to vote
on it.

 While
the repeal effort is dead this year, this will be an issue to watch in coming
years. 

Related Content: Small Business News | Missouri | Taxes

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