A city “facility fee” levied against out-of-town professional athletes represents an unconstitutional tax under Pennsylvania law, a Pittsburgh court said when it struck the tax down this week.
The court determined the city’s Non-Resident Sports Facility Usage Fee was a tax, thus violating the Pennsylvania Constitution’s uniformity provisions. The fee took the form of a 3% assessment on income earned while playing in Pittsburgh’s professional sports venues, including PNC Park, PPG Paints Arena and Acrisure Stadium.
Two professional hockey players — Scott Wilson, a former Pittsburgh Penguin, and Kyle Palmieri, a right winger for the New York Islanders — and MLB outfielder Jeff Francoeur sued the city along with the NHL and MLB players’ associations to end the fee. The NFL Player’s Association also joined in the suit
The ruling by Allegheny County Common Pleas Court Judge Christine Ward, entered on Wednesday, barred the city from assessing, imposing or collecting the fee.
Taxes on visiting professional athletes are sometimes referred to as “jock taxes.” Collectively, the three plaintiffs in the case paid more than $25,000 to the city under the fee, court documents say.
But since there is no similar fee levied against Pittsburgh residents, Judge Ward wrote, it presents a “discriminatory burden on out-of-state residents” and violates the Uniformity Clause of the state constitution.
That clause says, “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.”
The city argued in court filings that the athletes were not discriminated against because they were entitled to a credit on local income taxes owed for the fee. The fee was imposed so that non-resident athletes would help finance the stadiums in which they play, they argued.
Judge Ward, however, found the fee discriminatory in two ways: It not only taxes non-residents differently than residents, but it represents discriminatory tax rates against people in the same occupation.
The city tried to argue that, even if the fee was a tax, it would be permissible because residents and non-residents essentially paid the same rate. Rather than a 3% facility fee, Pittsburgh residents pay 2% of their income tax to city schools and a 1% statutory tax on income.
Judge Ward said that assertion was “in error” because the school tax is levied by and paid to the schools, not the city, but the facility fee is paid into the city’s general fund.
“There is no permissible or rational basis for an unequal application of tax rates across residents and nonresidents, and unequal application of tax rates across the same profession,” Judge Ward wrote in her opinion.
City officials could not be reached for comment on the ruling.
Mick Stinelli: mstinelli@post-gazette.com
First Published: September 24, 2022, 1:04 p.m.
Updated: September 25, 2022, 2:38 p.m.
