Bryan Cave Leighton Paisner LLP’s lawsuit seeking a refund of over $370,000 in St. Louis earnings taxes has been characterized as baseless by the city and its revenue collector, Gregory Daly. This contention was made in front of a Missouri trial court.
The law firm filed a complaint on May 9, alleging that for a decade, the city had been imposing taxes only on 14.4% of each nonresident partner’s share of the firm’s net income. However, the city notably adjusted the firm’s 2022 earnings tax return to impose taxation on 100% of the said income for nonresident partners assigned to the St. Louis office. This abrupt change in the tax method prompted the firm to seek a refund (read the full article on Bloomberg Tax).
St. Louis argues that it is not obligated to adhere to the calculations employed in previous assessments. The city maintains that the firm’s current taxation method is within legal bounds, considering the partners’ assigned office locations. This case is a critical one to follow for legal professionals, particularly those involved in tax litigation, given its implications on how cities may approach the taxation of nonresident partners’ earnings.