Earnings Tax FAQ

What is the earnings tax? Why is this tax important? Who pays this tax?

What is the earnings tax?

It's the largest source of the City's general revenue. People who live or work in the City of St. Louis contribute 1 percent of their earnings. It makes up 33 percent of the general fund, or about $164 million. City voters will be asked whether to continue this existing tax for another five years.

Why is this tax important?

This tax ensures that the City can continue delivering the services City residents expect, like police and fire protection, and street and park maintenance. Current projections show that non-renewal could force eliminating 300 uniformed police officer positions and 187 firefighters over 10 years. Without the earnings tax, the City would need to increase property taxes by more than 56 percent and/or increase sales taxes or fees to make up for the lost revenue needed to retain current services.

When is the Election?

Tuesday, April 5, 2016

What will I be Asked?

The first question on the ballot is Proposition E, which asks this yes or no question:

Shall the earnings tax of 1%, imposed by the City of St. Louis, be continued for a period of five (5) years commencing January 1 immediately following the date of this election?

Who pays this tax?

Any wage earner who lives or works in the City of St. Louis is subject to the earnings tax. Retirees are exempt from this tax. Approximately 55 percent of St. Louis earnings tax revenues are paid by non-residents who use and benefit from City services.

Is this a new tax?

No. This is not a new tax nor a tax increase, but rather the renewal of the same voter-approved tax that has been in place since 1959.

Will this increase my tax burden?

No, the current 1 percent tax will remain unchanged.

If the earnings tax renewal fails, can we decide to reinstate it at a later date?

No. Should the renewal fail to pass on April 5, the earnings tax can never be reinstated without approval of the Missouri Legislature. The City would be forced to implement an immediate reduction in services or increase in other taxes to make up for the lost revenue.

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