Last week, Allegheny County Judge Christine Ward struck down a fee levied by the City of Pittsburgh against visiting professional athletes’ wages, calling the fee an unconstitutional tax under Pennsylvania law.
The fee was originally challenged in court in November 2019, spearheaded by three athletes, including New York Islanders right-winger Kyle Palmieri, former Pittsburgh Penguins and current Kontinental Hockey League player Scott Wilson, and retired MLB outfielder Jeffrey B. Francoeur, and player associations representing the MLB, the NHL, and the NFL.
The fee, called a “facility fee” by Pittsburgh officials, applied to all athletes who used the City’s sports venues, including Acrisure Stadium (formerly Heinz Field), PNC Park, and PPG Paints Arena. The fee required athletes who lived outside of Pittsburgh to pay a 3% assessment on their personal income earned while in Pittsburgh, while athletes who lived in Pittsburgh paid a 1% assessment. Further, the fee was assessed differently across the professional sports leagues — NFL players paid based on their “duty days” in Pittsburgh, which included games and practices; MLB and NHL players paid based on dividing the total number of games played in Pittsburgh by the total games played that season.
The fee presents a significant cost to out-of-state athletes. The lawsuit showed Francouer paid $510 to Pittsburgh for three games played at PNC Park in 2015 when he was with the Philadelphia Phillies and $758 for three games in 2016 when he was with the Seattle Marlins. Palmieri paid $1,902 in 2016 and $4,705 in 2018 for games played at PPG Paints Arena when he was with the New Jersey Devils. Meanwhile, Wilson played 33 games there in 2016 and paid $5,970 in taxes that year when he was with the Pittsburgh Penguins. Collectively, the three have paid more than $25,000 in fees to Pittsburgh.
The plaintiffs alleged that the City’s fee was actually an illegal tax because it treated resident and non-resident athletes differently. Judge Ward agreed, stating that the fee was a “clear violation” of the Pennsylvania Constitution’s uniformity clause, which requires uniformity in taxes across the same class of subjects. “The facility fee is a tax in function, and should be recognized as such,” Ward wrote, finding that it more appropriately fit the legal definition of income tax rather than of fee, since it is assessed on players’ wages. The fee imposed by the City was not actually a fee as defined by law because it was not subject to the supervision and regulation of a licensing authority; no licensing authority exists to collect the fee and regulate the use of the sports venues. Further, under the law, the money collected from a fee is to be used to reimburse the licensing authority for its work but, in Pittsburgh’s case, the money collected from the players went directly to the City’s general fund. Ward wrote that the City’s fee appears to have been “specifically enacted to raise revenue for general public purposes,” which was evident in the City’s 2021 budget report, which listed the facility fee revenue under the category of “sources of tax revenue.”
Ward also noted that Pennsylvania State law precedent holds that “residence cannot be made the basis of discrimination in taxation of persons engaged in the same profession.” Thus, because the City was charging 3% for non-residents and 1% for residents, it was discriminatory. “The facility fee presents a discriminatory burden on out-of-state residents, with no like tax levied upon Pittsburgh residents,” wrote Ward.
Ultimately, Ward granted the plaintiffs’ motion for summary judgment, declaring the fee an unconstitutional tax, and issued an injunction prohibiting the City of Pittsburgh from continuing to collect the “jock tax.”