Pa. court weighs constitutionality of Pittsburgh tax on pro athletes, entertainers

An appellate court sitting in Pittsburgh heard oral arguments Wednesday in a case over a 3% city tax imposed on professional athletes and entertainers performing at publicly funded facilities.

The seven-judge panel of Pennsylvania’s Commonwealth Court must decide whether the city’s Sports Facility Usage Fee is constitutional.

A decision is not expected for several months.

The fee, which is used to help finance the facilities’ operations and pay down bond debt, applies to professional athletes, team employees and entertainers who work, play or perform at Acrisure Stadium, PPG Paints Arena and PNC Park.

In 2019, the players associations of the National Hockey League, National Football League and Major League Baseball filed a lawsuit in Allegheny County Common Pleas Court alleging that the fee amounts to a tax that discriminates against professional athletes who live in the city of Pittsburgh and nonresident athletes who travel here to play.

Athletes named as plaintiffs in the lawsuit include Scott Wilson, who played for the Pittsburgh Penguins from 2014 through 2017 and lived then in Wexford; former major-league baseball player Jeff Francoeur; and NHL player Kyle Palmieri.

The lawsuit asserted that the facility fee was discriminatory and unconstitutional and sought an injunction to prohibit the city from collecting it.

In September 2022, Allegheny County Common Pleas Judge Christine Ward ruled in favor of the players’ associations, saying the tax is unconstitutional.

Under the state constitution, all taxes are to be uniform, Ward said. But in the case of the facility fee, it distinguishes between resident and nonresident athletes, and also between professional athletes and entertainers and all other wage earners, she said.

Those distinctions create disparate treatment of various tax classes, Ward wrote in her 12-page opinion.

“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 argues 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.

“The city’s math is fine, but the example compares apples to oranges,” said attorney Ryan McManus, who represents the players’ associations.

McManus said resident athletes who pay school district taxes get the benefit of education, but that’s not the case for nonresidents.

During argument Wednesday, attorney Yazan Ashrawi argued that there is no discrepancy because resident and nonresidents now pay the same tax rate.

“It’s uniform when you look at the class of taxpayers,” he said. “Taxation is never perfect. It’s never going to be perfectly uniform. It’s never going to be perfectly equal.”