Pa. Supreme Court to decide if Pittsburgh fee on out-of-town athletes is legal

The Pennsylvania Supreme Court said Monday that it will decide whether a special fee Pittsburgh charges out-of-town athletes and performers is constitutional.

The city, which charges nonresident professional athletes and entertainers 3% of their daily income while appearing in Pittsburgh, is appealing a ruling by a lower state court.

Commonwealth Court in January found that the city’s Sports Facility Usage Fee is unconstitutional because it taxes residents and nonresident entertainers and athletes differently, which plaintiffs argue would violate the state’s Uniformity Clause.

The city asked the state Supreme Court to consider the issue, and on Monday, it said it would address just one question: whether the Commonwealth Court went against a 1951 precedent and misinterpreted the clause, which requires taxes to be applied equally.

The fee was passed by the city in November 2016 to help the operation of sports venues in Pittsburgh — including PNC Park, Acrisure Stadium and PPG Paints Arena — and pay down bond debt.

It applied to nonresident professional athletes, team employees and performers who appeared at the city’s sports venues.

But three years later, the player associations for the NFL, NHL and MLB sued, alleging the fee was an illegal tax which discriminated against professional athletes who live in the city and nonresident athletes appearing in Pittsburgh to play.

Plaintiffs included former Penguin Scott Wilson, who lived in Wexford at the time.

Both an Allegheny County Common Pleas Court judge and the Commonwealth Court agreed with the plaintiffs, finding the fee is discriminatory and unconstitutional.

Common Pleas Judge Christine Ward wrote in a 12-page opinion that the facility fee distinguishes between resident and nonresident athletes, and also between professional athletes and entertainers and all other wage earners, she said.

Those distinctions, she said, create disparate treatment of various tax classes.

“In this sense, it would be unfair and unreasonable to place a tax burden on nonresidents, to whom the city is not politically accountable, rather than on the city’s residents,” Ward said.

The city has argued that there is no distinction between resident and nonresident athletes because while nonresidents must pay a 3% income tax, residents pay a 1% income tax and 2% school district tax, making the tax equivalent.

In a statement Tuesday, Pittsburgh Mayor Ed Gainey said he was pleased the court will consider the issue and that the city will continue to collect the tax as the appeal is pending.

“We want our residents to know that we are doing all that we can to ensure the financial strength and security of our city,” he said.