Lawsuit challenges St. Louis payroll tax paid by employers

ST. LOUIS -- A St. Louis business is suing to halt the city's payroll tax paid by employers, arguing it's unconstitutional.

General Marine Services and Thomas Joseph Neuner, a lawyer and financial adviser, claim in Monday's lawsuit the half-percent tax was never authorized by the Missouri Legislature. They allege the city has no power to impose it.

The lawsuit, filed in St. Louis circuit court by lawyer W. Bevis Schock of Clayton, doesn't challenge the 1 percent tax workers pay on their earnings in the city.

The payroll tax on employers is expected to raise about $32.8 million in revenue this year, said Maggie Crane, a spokeswoman for Mayor Francis Slay.

In comparison, the earnings tax paid by city residents and commuters who work in the city provides $164 million of the city's $493 million in revenue.

The suit also challenges the city's practice of giving payroll tax refunds to certain companies that improve their properties. Two of those companies -- health insurer Anthem Inc. and the Polsinelli law firm -- also were named as defendants.

Anthem was granted tax breaks in 2009 after it agreed to keep its regional headquarters downtown, spending $4.5 million to improve its building, and move 300 employees to the city from the suburb of Creve Coeur. The city allowed the company to keep half of the payroll taxes from those 300 workers and granted a 10-year property tax abatement.

An Anthem spokeswoman declined the St. Louis Post-Dispatch's request for comment, and Polsinelli officials were not immediately available.

Crane said city attorneys hadn't seen the suit and were reserving comment.

Information from: St. Louis Post-Dispatch, http://www.stltoday.com