The Allegheny County Common Pleas Court ruled Pittsburgh’s non-resident sports facility usage fee (“fee”) unconstitutional and issued an injunction against further imposition. The suit was brought by three professional athletes that had paid the fee in prior years. The fee is 3% of the income earned by a non-resident when playing in one of the Pittsburgh major sports venues. By contrast, local players are subject to the city’s 3% income tax (2% to schools and 1% to the city) which was the basis of the city’s argument.
The presiding judge, Ms. Christine Ward, however ruled that the fee was a tax and violated the state’s Uniformity Clause. Pennsylvania’s Uniformity Clause provides that, “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.” Essentially, the fee imposed a tax on non-residents that did not apply to residents and players (in the same profession) were subject to different tax rates. It remains to be seen whether Pittsburgh will appeal this ruling to a higher court.
If you have questions on this ruling or other SALT matters, please contact the HBK SALT Advisory Group at hbksalt@hbkcpa.com.
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