1 week Ago By Julia Maruca
Pennsylvania Supreme Court justices say they need more information before they make a decision in the already drawn-out court fight regarding Pittsburgh’s controversial facility usage fee. The so-called “jock tax” is a 3% levy on out-of-town athletes and entertainers who perform in city-owned venues. Pittsburgh officials believe it’s a way to earn something back on their investment in those facilities, charging out-of-towners a tax rate on their earnings that is equal to the 3% earned income tax paid for by residents.
But a lawsuit brought forward by several athlete unions argues the city doesn’t have the right to charge such taxes. In 2019, the players unions from the three major sports leagues sued the city in Common Pleas Court. That court deemed the tax illegal in 2022 — a ruling that was upheld by an appeals court last year .
But the city appealed the case to the state’s highest court. The city currently expects to receive $6.1 million from the tax in 2025.
That’s a small portion of the annual $785 million operating budget, but as city funds have narrowed and federal COVID funds have been used up, the margins of the budget have shrunk. For 2025, the city’s budget surplus was estimated to be only around $3.2 million — a reduction in jock tax revenue could put the city in the red.
On Thursday, the state Supreme Court heard oral arguments in the case, some of which were a rehash of the questions at the heart of the drawn-out debate, while others were altogether new. The city’s team, led by attorney Yaz Ashrawi, pointed to a case from Sharon, PA to argue the tax brings “parity and equalization” by taxing non-resident athletes and performers at the same rate applied to residents, who pay a 3% earned income tax. The athletes’ lawyers, led by attorney Ryan McManus, countered that two-thirds of the 3% earned income tax rate that Pittsburgh residents pay is actually for Pittsburgh Public Schools, not for the city itself.
McManus argued that lumping school district and city taxes together is like combining “apples and oranges.” Since non-residents don’t pay city school taxes, he said, visiting performers shouldn’t have to either. At issue is the state constitution’s “uniformity clause,” which requires “all taxes shall be uniform, upon the same class of subjects.
” McManus also honed in on another claim of Ashrawi’s — that athletes could be reimbursed for the taxes they already pay in their home school districts. McManus said the city doesn’t allow that. That’s because the tax was originally characterized as a fee — a payment for a specific government service that isn’t reported on tax forms — rather than a tax to support the overall budget.
Earlier in the legal fight, city lawyers conceded that the levy was in fact a tax, but they haven’t adjusted their reporting procedures. Ashrawi argued the city hasn’t made the move to change those processes yet because the outcome of the legal proceedings is unclear. Justices themselves seemed hazy on how to resolve the issue, and asked for additional information about the city’s procedures for reporting and potentially reimbursing payments.
“We want to get this right,” said Chief Justice Debra Todd. Ashrawi said after the hearing that he didn’t yet know for sure what information the justices will ask for. “It’s an interesting case,” he said.
“We’ll see how it turns out.”.
