Pittsburgh’s tax on visiting pro athletes is unconstitutional, Commonwealth Court finds

By: - January 12, 2024 5:32 pm

PNC Park in Pittsburgh, Pa. (Photo by JOSHUA PEACOCK/WIKIPEDIA/City & State Pa.)

A Pennsylvania court has ruled that Pittsburgh’s tax on visiting athletes and performers who use the city’s publicly-funded stadiums and arena is unconstitutional because it arbitrarily taxes nonresidents at a different level than residents.

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

In a 6-1 decision, an en banc Commonwealth Court panel upheld an Allegheny County judge’s finding that the 3% facilities tax impermissibly treats those who live outside Pittsburgh differently than city residents. 

Stephen Kidder, a Boston attorney who represents the players and unions, said his clients are pleased with the decision and feel that it is well reasoned. 

“It’s been a long battle and I think we’re getting close to the end, so that’s good news,” Kidder said.

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, Kidder said. 

When Taylor Swift, for example, played Acrisure Stadium last summer, 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.

Between 600 and 700 athletes have filed claims to receive refunds from Pittsburgh, Kidder said, adding that the amount the city could be required to pay back is unclear. 

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.

Olga George, a spokesperson for Mayor Ed Gainey, said on Friday she was unable to comment on the decision.

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 facilities tax requires that athletes and performers who live outside of Pittsburgh pay a 3% tax on income earned from the city-funded venues. For NFL players, that includes practice sessions and games but the taxable income for NHL and MLB players includes only that earned during games. 

Residents who earn income from the public stadiums and arenas pay only a 1% earned income tax to the city, but they also pay 2% to the Pittsburgh Public Schools. Non-residents who work in Pittsburgh at locations other than the stadiums and arena pay only the 1% earned income tax.

The court found that the facilities tax violated the Pennsylvania Constitution’s 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 equalized the tax burden for residents and nonresidents who pay the facilities tax because the school district has no authority to tax nonresidents. 

While the city claims that the facilities tax paid by nonresidents is used for the upkeep of the public venues, it can’t claim that the school tax paid by residents offsets the cost of maintaining the stadiums and arena. 

“If we exclude the 2% school tax from our analysis, it is clear that the city has effectively imposed a 3% EIT on nonresidents who derive income from the city’s facilities, while imposing a 1% EIT on residents who similarly derive income from the Facilities,” Ceisler wrote.


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Peter Hall
Peter Hall

Peter Hall has been a journalist in Pennsylvania and New Jersey for more than 20 years, most recently covering criminal justice and legal affairs for The Morning Call in Allentown. His career at local newspapers and legal business publications has taken him from school board meetings to the Pennsylvania Supreme Court and many points of interest between. He earned a degree in journalism from Susquehanna University.