Pa. Supreme Court grants limited appeal of ruling striking down Pittsburgh’s ‘jock tax’

The state Supreme Court has granted a limited appeal in Pittsburgh’s challenge to a Pennsylvania court ruling that the city’s tax on visiting athletes and performers is unconstitutional.

In a one-page order Monday, the Supreme Court said the appeal would be limited to whether Commonwealth Court correctly interpreted the state constitution’s requirement that all taxpayers must be subject to the same tax rate. It denied the appeal on other grounds the city had raised.

Mayor Ed Gainey’s office had appealed Commonwealth Court’s 6-1 decision in January that the 3% public facilities usage fee that the city collected on out-of-town athletes and performers impermissibly treated those who live outside Pittsburgh differently than city residents.

“We want our residents to know that we are doing all that we can to ensure the financial strength and security of our City,” Gainey’s office said in a statement Tuesday. “This is why we are pleased that the Supreme Court has agreed to hear our case defending our ability to collect the so-called jock tax. We believe that this tax is constitutional and will continue to collect it as we prepare to present our arguments to Pennsylvania’s Supreme Court.”

Two National Hockey League players and a Major League Baseball player sued the city along with the players’ unions for the National Football League, NHL and MLB to overturn the fee.

Visiting athletes challenged the tax because it imposes a burden on professional athletes and others who use the public venues that other people who work in the city are not required to shoulder, attorney Stephen Kidder, a Boston attorney who represented the players and unions, told the Capital-Star in January.

When Taylor Swift, for example, played Acrisure Stadium in 2023, her earnings were subject to the 3% tax, but if the same concert had been held in a private venue, Swift would be taxed at only 1%, Kidder said.

Former Miami Marlins outfielder Jeffery B. Francoeur, New York Islanders player Kyle C. Palmieri, and former Pittsburgh Penguins player Scott Wilson, along with the three players’ associations, sued in Allegheny County Court. In 2022 they won an injunction to stop the city from collecting the tax.

The Supreme Court’s order granting the appeal cites a 1951 decision in which workers in Sharon challenged a tax on wages earned by non-residents that was double that collected from the wages of residents, claiming it impermissibly discriminated against non-residents.

Residents of Sharon received a credit for a wage tax they paid to the school district that non-residents were not required to pay. That brought the total of the city and school district wage taxes collected from residents to the same amount as the city wage tax collected from non-residents.

The Supreme Court upheld the city of Sharon’s tax scheme, holding that allowing a credit for taxes paid to another government authority is not a violation of the state Constitution’s uniformity clause.

In the Pittsburgh case, Commonwealth Court found that the facilities tax violated the Uniformity Clause, which requires that municipal or state taxes on the same classes of taxpayers must be the same.

It found the tax makes a clear distinction between residents and nonresidents that violated the uniformity clause. The court rejected the city’s argument that the tax burdens are the same because residents pay 1% to the city and 2% to the school district.

In an opinion for the Commonwealth Court majority, Judge Ellen Ceisler said the 2% school district tax that residents pay in addition to the 1% earned income tax cannot be considered to equalize the tax burden for residents and nonresidents who pay the facilities tax because the school district has no authority to tax nonresidents.

Kidder said between 600 and 700 athletes have filed claims to receive refunds from Pittsburgh following an Allegheny County judge’s decision, which Commonwealth Court upheld earlier this year.

Pittsburgh financial documents show that the facilities tax has generated around $5 million a year between 2015 and 2019 with a peak of $6.3 million in 2017.

This story was first published by Pennsylvania Capital-Star. Read more of their coverage here.

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