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BULLET St. Louis City Revised Code Chapter 5.23 Payroll Expense Tax

St. Louis City Revised Code (annotated) has been converted to electronic format by the staff of the St. Louis Public Library. This electronic version has been done for the interest and convenience of the user. These are unofficial versions and should be used as unofficial copies.

Official printed copies of St. Louis City Revised Code may be obtained from the Register's Office at the St. Louis City Hall.



Chapter 5.23
Payroll Expense Tax

Sections:

5.23.010 Definitions.
5.23.020 Tax imposed.
5.23.030 Determination of tax attributable to City.
5.23.040 Applicability of tax.
5.23.050 Exemptions.
5.23.060 When due and payable--Filing of return.
5.23.070 Request for financial information.
5.23.080 Duties of Collector--Recordkeeping--Enforcement and administration.
5.23.090 Unpaid tax--Liability--Penalty.
5.23.100 Recoverability of tax.
5.23.110 Failure, refusal or neglect to make return--Penalty for violation.
5.23.120 Failure to pay--Attempt to defeat or evade tax--Penalty for violation.
5.23.130 Tax payment protest--Impoundment of tax portions protected--Investment of impounded taxes.
5.23.140 Payment of tax not required of certain entities.

Editor's Note:

Ordinance 60643, codified in Chapter 8.07 of the Revised Code of Ordinances, City of St. Louis, imposes a graduated business license tax ranging from one hundred fifty dollars to twenty-five thousand dollars per year, depending on the number of St. Louis employees on all merchants, manufacturers, businesses, avocations, pursuits and callings that are not exempt from the payment of licenses by law.

The passage of the payroll expense tax submitted to the voters under Ordinance 60737, codified in Chapter 5.23 of the Revised Code of Ordinances, City of St. Louis, and the graduated business license tax submitted to the voters under Ordinance 60643 and codified in the aforementioned Chapter 8.07, activates the provisions of Ordinance 60735 which pertains to taxes and fees imposed on businesses in St. Louis, and repeals Ordinance 60343, pertaining to a special employer's tax and the provisions of certain ordinances imposing various business license taxes.

5.23.010 Definitions.

As used in this chapter, the following terms have the following meanings:

A. "Business" means any activity, enterprise, profession, trade or undertaking of any nature conducted or engaged in, or ordinarily conducted or engaged in, with the object of gain, benefit or advantages, whether direct or indirect, to the taxpayer or to another or others. The term shall include subsidiary or independent entities which conduct operations for the benefit of others and at no profit to themselves, nonprofit businesses, and trade associations.

A person shall be deemed to be engaged in business, who in return for rental income, rents, leases or hires real or personal property to others. A person shall not be deemed to be engaged in business solely by reason of dividend or interest income from passive investments.

B. "City" means the City of St. Louis, Missouri.

C. "Collector" means the Collector of Revenue of the City.

D. "Employee" means and includes any individual in the service of an employer, under an appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed. For purposes of this tax, and irrespective of the common law tests for determining the existence of an independent contractor relationship, an individual performing work or service for compensation, shall be deemed to be an employee of the person for whom the work or service is performed unless:

1. Such individual has been and will continue to be free from control or direction over the performance of such work or service, both under his appointment or contract of hire or apprenticeship and in fact; and

2. Such work or service is either outside the usual course of the business of the person for which such service is performed or such service is performed outside of all the places of business of the person for whom such service is performed; and

3. Such individual is customarily engaged in an independently established trade, occupation, profession or business.

For purposes of this tax, any member of or person having an ownership interest in a partnership shall be deemed an "employee" of such partnership.

E. "Individual" means a natural person, a human being, as distinguished from an artificial person such as a corporation or political subdivision.

F. "Partnership" means a partnership, limited partnership, or any other form of unincorporated business or enterprise, owned by two or more persons.

G. "Payroll expense" means the compensation earned irrespective of when paid, including salaries, wages, commissions, bonuses, and -other compensation to an individual who, during any tax year, performs work or renders service, in whole or in part in the City; and if more than one individual during any tax year performs work or renders service in whole or in part in the City the term "payroll expense" shall mean the total compensation earned irrespective of when paid including salaries, wages, commission, bonuses and other compensation, to all such individuals. The term "payroll expense" for partnerships shall also mean, in addition to the foregoing, the entire amount of distributions made to any member or person having an ownership interest in such partnership.

H. "Person" means any natural person, receiver, administrator, executor, assignee, trustee in bankruptcy, trust, estate, firm, co-partnership, partnership, joint venture, club, company, joint stock company, business trust, domestic or foreign corporation, association, syndicate, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise, and any natural person, who as an individual or with a spouse, owns 51 percent or more of the capital stock of a corporation obligated to file a return and pay tax pursuant to this chapter; and in addition, is a person with the power to control to fiscal decision-making process by which the corporation allocates funds to creditors in preference to its tax obligations under the provisions of this chapter. A person as defined herein, who is also an officer or director of a corporation obligated to file returns and pay tax pursuant to this chapter, shall be presumed to be a person with the power to control the fiscal decision-making process. Whenever the term "person" is used in any clause prescribing and imposing a penalty, the term as applied to partnerships shall mean the owners or part owners thereof, and as applied to corporation, the officers thereof.

I. "Taxpayer" means a person required hereunder to file a return or to pay a tax.
(Ord. 60737 1, 1988.)

5.23.020 Tax imposed.

A. There is hereby imposed, subject to the approval of the qualified voters as hereinafter provided, a tax for general revenue purposes upon every person not exempt under Section 5.23.050, hereof, who, in connection with his business, engages, hires, employs or contracts with one or more individuals as employee, to perform work or render services in whole or in part within the City. The incidence of such tax shall be solely upon the person subject to the tax hereunder and shall not be transferred directly or indirectly to the employee in any circumstances.

B. The amount of such tax shall be one-half of one percent (0.5%) of the payroll expense of such person attributable to the City as provided in Section 5.23.030 hereof.

C. This chapter is not intended to nor shall it be construed or administered as requiring any license or permit whatsoever, nor as a means to regulate the conduct of any business whatsoever, nor shall payment of the payroll expense tax be a condition precedent to engaging in any business whatsoever within the City or for or on the privilege of following or carrying on or conducting any profession or calling whatsoever, any ordinance provision to the contrary notwithstanding. The tax imposed hereunder, subject to the approval of the qualified voters, is imposed for general revenue purposes and in order to require commerce and the business community to bear a fair share of the cost of local government.
(Ord. 60737 2, 1988.)

5.23.030 Determination of tax attributable to City.

Where payroll expense is incurred by reasons of work performed or services rendered by an individual, as employee, partly within and partly without the City, the portion of such payroll expense attributable to the City (and subject to tax hereunder) shall be determined as follows:

A. If the amount of such payroll expense depends on the volume of business transacted by such individual then the portion of such payroll expense attributable to the City shall be the portion of such payroll expense which the volume of business transacted by such individual in the City bears to the volume of business transacted by him within and without the City.

B. In all other cases, the portion of such payroll expense attributable to the City shall be the portion of such payroll expense which the total number of working hours employed within the City bears to the total number of working hours within and without the City.

C. In all other cases, the portion of such payroll expense attributable to the City shall be the portion of such payroll expense which the total number of working hours employed within the City bears to the total number of working hours within and without the City.

D. If it is impracticable to apportion such payroll expenses as aforesaid either because of the peculiar nature of the service of such individual, or on account of the unusual basis of compensation, or for any other reason, then the amount of such payroll expenses reasonably attributable to work performed or service rendered, in the City, shall be determined in accordance with rules or regulations adopted or promulgated by the Collector for the purpose.

If the Collector determines that the percentage of payroll expenses attributable to the City, for any one or more taxpayers, is a relatively stable percentage, the Collector is authorized to (but need not in any case) establish that percentage as a prima facie percentage of payroll expense attributable to the City; provided, however, that the Collector shall condition the establishment of such fixed percentage upon the obligation of the taxpayer to report immediately to the Collector any significant change in his mode of business which might have some effect upon the portion of his payroll expense which is attributable to the City; and provided further, that any such fixed percentage established by the Collector is revocable by the Collector at any time.
(Ord. 60737 7, 1988.)

5.23.040 Applicability of tax.

This tax shall not apply to any person unless such person is doing business within the City. A person is doing business within the City, within the meaning of this chapter, if he engages, hires, employs or contracts with one or more individuals, as employee, to perform work or render services in whole or in part with the City and, in addition, either:

A. Such person maintains a fixed place of business within the City; or

B. An employee maintains a fixed place of business within the City for the benefit or partial benefit of such persons; or

C. Such person or employee owns or leases real property within the City for such person's business purposes; or

D. Such person or employee regularly maintain a stock of tangible personal property in the City for sale in the ordinary course of his business; or

E. Such person employs or loans capital on property within the City; or

F. Such person or his employee conducts continuous solicitation of business within the City; or

G. Such person or his employees perform work or render services in the City for not less than seven working days per year for all such employees; or

H. Such person or his employee utilizes the streets within the City in connection with the operation of motor vehicles for business purposes.
(Ord. 60737 8, 1988.)

5.23.050 Exemptions.

Religious and charitable organizations and institutions, not-for-profit civic, social service or fraternal organizations, not-for-profit hospitals, not-for-profit educational institutions, the State of Missouri and agencies or departments thereof, and the United States of America and agencies or departments thereof, shall be exempt from taxation under this chapter.
(Ord. 60737 9, 1988.)

5.23.060 When due and payable--Filing of return.

The tax imposed herein shall become due and payable on or before the last day of July, October, January and April of each year, in an amount of the tax due for the three calendar months next preceding the month in which the return is to be filed. Such return shall be on a form or forms obtainable from the Collector and shall be subject to the rules and regulations prescribed therefor by the Collector.
(Ord. 60737 10, 1988.)

5.23.070 Request for financial information.

A. The Collector may, at his discretion, send any person a written request for financial information necessary for the purpose of verifying such persons' tax liability or tax-exempt status as claimed by the person on a return filed pursuant to Section 5.23.060 hereof. The request shall be mailed to the person's last known address as indicated in the Collector's records.

B. Each person to whom a written request for financial information has been sent pursuant to subsection A of this section shall complete and return the form, with the information requested, to the Collector within 30 days of the date of the mailing of the written request. Said person shall provide such financial information that the Collector, in writing, has indicated is necessary to verify said person's tax liability or tax-exempt status.
(Ord. 60737 11, 1988.)

5.23.080 Duties of Collector--Recordkeeping--Enforcement and administration.

A. It shall be the duty of the Collector to collect and receive the tax imposed by this chapter. In addition to keeping the records now required by the law and paying over the proceeds from the collection of taxes to the Treasurer of the City, as now provided by law, the Collector shall keep an accurate and separate account of all payroll expense tax payments received by him, showing the name and address of the taxpayer and the date of the payments. The Collector is charged with the enforcement of the provisions of this chapter and is empowered to issue, adopt, promulgate and enforce forms, rules and regulations relating to any matter or thing pertaining to the administration and enforcement of the provisions of this chapter, including but not limited to provisions for the reexamination and correction of returns and payments alleged or found to be incorrect or as to which an overpayment or underpayment is chimed or found to have occurred, and the making of refunds of taxes found to have been overpaid. The Collector or any agent or employee authorized in writing by him as authorized to examine the books, paper and records of any employer or supposed employer, or of any taxpayer or supposed taxpayer, in order to verify the accuracy of any return made, or if no return was made, to ascertain the tax imposed by this chapter, and such actual or supposed employer or taxpayer is hereby directed and required to permit such examination.

B. Every person subject or supposedly subject to tax hereunder, or taxpayer or supposed taxpayer, is directed and required to give to the Collector or his duly authorized agent or employee the means, facilities and opportunity for examinations and investigations as are authorized. The Collector is authorized to examine any such person or taxpayer concerning any amounts which were or should have been returned for taxation and to this end may order the production of books, papers and records and the attendance of all persons before him, whether as parties or witness, whom he believes to have knowledge of such amounts. The refusal of examination by any such person or taxpayer shall be a violation of this chapter. Any information obtained as a result of any return, investigation, hearing or verification required or authorized by this chapter, shall be confidential except for official purposes and except in accordance with judicial order. Any person otherwise divulging such information shall, upon conviction thereof, be guilty of a violation of this chapter and shall be subject to a fine of not more than five hundred dollars or imprisonment for not more than six months or both fine and imprisonment for each offense.

C. To the extent permitted by law, the Collector is authorized to enter into agreements with the Missouri Department of Revenue and/or the United States Internal Revenue Service, to facilitate enforcement or administration of the tax hereunder.

D. The compensation payable to the Collector for collecting the tax imposed by this chapter shall be that commission allowed by Section 82.650 R.S. Mo 1986, for the collection of City Earnings Tax.
(Ord. 60737 12, 1988.)

5.23.090 Unpaid tax--Liability--Penalty.

Any tax imposed by this chapter and remaining unpaid after it has become due shall bear interest at the rate of one percent per month, or fraction thereof and the delinquent taxpayer shall be liable for the tax and interest. In addition thereto any taxpayer failing to pay any tax required by this chapter shall be liable for a penalty of five percent of the amount of the unpaid tax for each month or fraction of a month during which failure to pay continues, with the penalty not to exceed twenty-five percent of the total tax shown to be due.
(Ord. 60737 13, 1988.)

5.23.100 Recoverability of tax.

Any tax imposed by this chapter together with all interest and penalties, shall be recoverable by the City as other debts of like amounts as recoverable.
(Ord. 60737 14, 1988.)

5.23.110 Failure, refusal or neglect to make return--Penalty for violation.

Any person or taxpayer who shall fail, neglect or refuse to make any return required by this chapter or any person who shall fail, neglect or refuse to withhold or pay over to the City any amount of tax due under this chapter, or any person or taxpayer who shall refuse to permit the Collector, or his duly authorized deputy or agent, to examine his books, records or papers, or who shall knowingly make an incomplete, false or fraudulent return, or who shall attempt to do anything whatsoever to avoid the full disclosure of the amount of payroll expense or partnership distributions subject to tax hereunder, shall be guilty of a violation of this chapter and shall be subject to a fine of not more than five hundred dollars or to imprisonment for not more than six months, or to both fine and imprisonment.
(Ord. 60737 15, 1988.)

5.23.120 Failure to pay--Attempt to defeat or evade tax--Penalty for violation.

Any person or taxpayer who wilfully fails to pay or attempts in any manner to defeat or evade any tax imposed under provisions of this chapter shall be deemed to have violated this chapter and shall be subject to a fine of not more than five hundred dollars or to imprisonment for not more than six months, or to both fine and imprisonment.
(Ord. 60737 16, 1988.)

5.23.130 Tax payment protest--Impoundment of tax portions protected--Investment of impounded taxes.

A. Any taxpayer may protest all or any part of any tax assessed against him pursuant to this chapter. Any such taxpayer desiring to pay any such tax under protest must, at the time of paying such tax, file with the Collector a written statement setting forth the grounds on which his protest is based. Failure to file such a statement constitutes a waiver of any right that the taxpayer may possess to challenge the assessment and collection of the tax.

B. The Collector shall disburse to the Treasurer all portions of tax not so protested and shall impound in a separate fund all portions of tax not so protested and shall impound in a separate fund all portions of such taxes which are so protested. If any taxpayer so protesting his tax shall fail to commence an action in the circuit court for the recovery of the tax protested within 90 days after filing his protest, such protest shall be deemed abandoned and become null and void and of no effect, and the Collector shall then disburse to the Treasurer the tax impounded, and any interest earned thereon.

C. All protested tax shall be invested by the Collector in the same manner as assets specified in Section 30.260 R.S. Mo for investment of State moneys. A taxpayer who is entitled to a refund of protested tax shall also receive the interest earned on the investment thereof. If the Collector is ordered to release and disburse all or any part of the tax paid under protest to the Treasurer, such tax shall be disbursed along with the proportional amount of interest earned on the investment of the tax due the City.

D. Whenever taxes have been impounded by the Collector under this section because of the filing of a protest, the City Counselor is authorized to apply to the circuit court for an order, pendete lite, requiring the disbursal of all or any part of such impounded tax funds to the City, on the ground that the City has the financial ability and legal capacity to repay such impounded tax funds in the event the court should make a subsequent decision ordering a refund to the taxpayer.
(Ord. 60737 17, 1988.)

5.23.140 Payment of tax not required of certain entities.

Nothing in this chapter shall be construed as requiring the payment of any tax by the United States of America, or by the State of Missouri, or by any municipal corporation, or by any of their subdivisions.
(Ord. 60737 19, 1988.)

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