Since our last post, the “jock tax” of Pittsburgh has been discontinued due to a judge deeming it a discriminatory practice.
Although Pittsburgh originally labeled the charge as a “Non-Resident Sports Facility Usage Fee”, Judge Ward determined the fee was actually a tax. Because the nomenclature changed from “fee” to “tax”, Ward then wanted to see if the city’s tax practice for the nonresident athletes abided by Pennsylvania’s Constitution.
Judge Ward labeled the taxation as a discriminatory practice and in violation of the PA Constitution for two reasons: (1) nonresidents are taxed differently than residents, and (2) people in the same profession are taxed differently - resident athletes vs. nonresident athletes. Included in her explanation, Judge Ward stated that “[w]ith no rational basis for this discriminatory practice, the facility fee is a clear violation of the Uniformity Clause of the Pennsylvania Constitution.”
Despite the ruling, the city does not believe the fee is a tax. According to the city, even if it were a tax, there is no discrimination because residents pay 2% of their income taxes to the schools and 1% statutory tax on their income, summing to the nonresident athletes’ 3% charge. Ward did not agree with this explanation because the final destinations of the funds are different. Judge Ward added “[d]efendants cannot find uniformity where a separate entity taxes.Recent court activity has reignited the constitutional controversy surrounding Pittsburgh’s nonresident athlete fee. In May 2019, members of the NHL, MLB, and NFL Players’ Associations and a few players filed a lawsuit in the Allegheny Court of Common Pleas disputing the constitutionality of a 3% fee imposed on the earned income of nonresident athletes using Pittsburgh facilities for athletic events. Amongst the plaintiffs are professional hockey players Scott Wilson and Kyle Palmieri, and professional baseball player Jeffrey Francoeur, all of whom claim the tax discriminates against nonresident athletes.
Pittsburgh, Pennsylvania
“These stadiums themselves have been paid for by taxpayers…There was a way we felt that some of that money could be recouped for the public and we will let the judge decide.”
The Nonresident Facility Usage Fee
Recent court activity has reignited the constitutional controversy surrounding Pittsburgh’s nonresident athlete fee. In May 2019, members of the NHL, MLB, and NFL Players’ Associations and a few players filed a lawsuit in the Allegheny Court of Common Pleas disputing the constitutionality of a 3% fee imposed on the earned income of nonresident athletes using Pittsburgh facilities for athletic events.
Amongst the plaintiffs are professional hockey players Scott Wilson and Kyle Palmieri, and professional baseball player Jeffrey Francoeur, all of whom claim the tax discriminates against nonresident athletes. Plaintiffs in the lawsuit claim the nonresident fee is discriminatory and unconstitutional, citing the Pennsylvania Constitution which requires that all taxes must be uniform. The lawsuit also references the U.S Constitution which prohibits states from establishing conditions for professional work that create a larger burden for nonresidents than residents. The plaintiffs’ lawyers have already been successful in overturning similar taxes in Ohio and Tennessee.
City Solicitor Yvonne S. Hilton responded to the claims during litigation in January 2020 by commenting that the City of Pittsburgh and its taxpayers have funded most of the facilities used for work by the plaintiffs, including PNC Park, Heinz Field, and PPG Paints Arena. Accordingly, Hilton said, Pittsburgh is justified in seeking compensation through the fee. Further, Hilton claims that the statute of limitations for the plaintiffs’ suit has long passed since the fee was created in 2005.
In December 2021, Judge Christine A. Ward of the Allegheny County Court of Common Pleas ordered summary judgement motions to be filed by the plaintiffs before January 28th, 2022 after an initial ruling for the parties to collaborate on a settlement was unsuccessful. The court will schedule a hearing for argument on the cross-motions for summary judgement after both parties file response briefs in March 2022.