Appellate court says city's Sports Facility Usage Fee paid by professional athletes is unconstitutional

A state appellate court on Wednesday agreed that the fee levied by the City of Pittsburgh on professional athletes and entertainers performing here is unconstitutional.

The Commonwealth Court decision upheld a 2022 opinion by Common Pleas Judge Christine Ward who issued an injunction prohibiting the city from collecting the 3% tax from those who play or perform at Acrisure Stadium, PPG Paints Arena and PNC Park.

That injunction will remain in place.

It was unclear Wednesday evening whether the city would appeal to the state Supreme Court.

The Sports Facility Usage Fee was passed in November 2016. It was designed to help finance the facilities’ operations and pay down bond debt. It applied to non-resident professional athletes, team employees and entertainers who appeared at the city’s sports venues.

But in 2019, players associations from the National Hockey League, National Football League and Major League Baseball sued in Allegheny County Common Pleas Court alleging that the fee was an illegal tax that discriminated against professional athletes who live in the city and nonresident athletes who travel to Pittsburgh to play.

Plaintiffs in the case included former Pittsburgh Penguin Scott Wilson, who lived in Wexford when he played here from 2014 through 2017; former MLB player Jeff Francoeur, and Kyle Palmieri, of the NHL.

They claimed that the fee was discriminatory and unconstitutional and sought an injunction against the city from being able to collect it.

Ward agreed and issued the injunction in September 2022.

But the city appealed to Commonwealth Court, a seven judge panel that heard argument in October.

Although the city admitted the fee amounts to a tax, its attorneys argued that it ends up being equivalent because, in total, everyone is paying the same: Nonresident athletes pay a 3% income tax, while resident athletes pay a 1% income tax and a 2% school tax.

The Commonwealth Court, in its 15-page opinion, disagreed.

“The city has failed to provide the requisite concrete justification for treating residents and nonresidents as distinguishable classes that may be subjected to different tax burdens,” the court wrote.