JEFFERSON CITY, Mo. – State Representative Jim Murphy, Chairman of the Special Interim Committee on the Earnings Tax, is announcing the completion of the committee’s work and has submitted the committee’s findings and recommendations to the Speaker of the House.
The committee, created in 2023, undertook a review of municipalities employing an earnings tax and assessed personal property tax policies. Through three public hearings, the committee extensively examined taxation policies impacting remote workers, emphasizing the disparities between the tax approaches of St. Louis and Kansas City in comparison to other municipalities across the country. In late September, House Speaker Dean Plocher broadened the committee’s scope to also include a thorough evaluation of personal property taxes. This week, the committee presented the following recommendations:
On the St. Louis & Kansas City Earnings Tax:
- Support the legal action in Mark Boles, et al., vs. City of St Louis, advocating for reimbursements to plaintiffs due to improper application of the 1% tax on remote work.
- Index the earnings tax to exempt low-income workers (those with income less than 150% of the federal poverty guidelines).
- Institute a gradual phase-out of the earnings tax tied to pre-determined revenue increases, with a 10% reduction triggered until complete elimination.
- Create exemptions for new residents and establish Earnings Tax Opportunity Zones to incentivize population and business growth in St. Louis and Kansas City.
On Residential Real Property Assessment:
- Close loopholes to prevent political subdivisions from evading Hancock Amendment requirements during local tax increases in anticipation of rising real estate assessments.
- Extend the allowable period for county assessors to file documentation and the timeframe for taxpayers to appeal assessments, aiming for more accurate valuations.
- Promote direct communication between county assessors and taxpayer-homeowners to enhance the accuracy of real property assessments and reduce instances of inaccuracies.
Rep. Murphy thanked the committee for its diligent work to review these policies and find commonsense solutions to help create a taxation process that ensures Missourians are not taxed unfairly.
“Today, we present our recommendations to address the complexities identified during our hearings. These proposals aim to promote fairness, relieve burdens on low-income workers, and encourage economic growth,” Rep. Murphy, R-St. Louis, said. “I believe these recommendations mark a significant step towards creating equitable and sustainable taxation policies. We look forward to further discussions and collaborations with our colleagues this session to enhance our understanding of these issues and refine our proposals for the benefit all of our communities.”
State Representative Jim Murphy, a Republican, represents parts of St. Louis County (District 94) in the Missouri House of Representatives. He was elected to his first two-year term in November 2018. For more information, please contact Rep. Murphy’s office at 573-751-3719 or via email at Jim.Murphy@House.Mo.Gov.