It is this fundamental:
“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.”
That’s taken from a new Commonwealth Court ruling that concludes a City of Pittsburgh “fee” levied on professional athletes and entertainers who perform in the city – the so-called “jock tax” –is patently unconstitutional.
The crux of the issue was that nonresident athletes were paying the 3 percent income tax while resident athletes were paying a 1 percent income tax and 2 percent public-schools tax.
The city, eventually conceding that the “fee” indeed was tax, said it’s a distinction without a difference because both classes of athletes end up paying the same.
As the Tribune-Review reminds:
“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 percent tax from those who play or perform at Acrisure Stadium, PPG Paints Arena and PNC Park.”
That injunction remains in place. Whether the city will appeal to the state Supreme Court remains unknown.
As Eric Montarti, research director at the Allegheny Institute, reminds:
“The city amended its ordinance on the Sports Facility Usage Fee in 2016. But the General Assembly authorized it in 2004 and the city enacted its ordinance that year and recorded revenue from the fee in 2005.”
In 2019, associations representing NHL, NFL and Major League Baseball players sued. They alleged it was a discriminatory and, thus, illegal tax.
Common Pleas and Commonwealth courts now have agreed. One would hope the state Supreme Court would follow suit. But with its decidedly left-leaning majority, that’s far from a given.
What sadly remains a given is that corporate wealthfare is alive and well in Pennsylvania.
To wit, the Trib reports that the state Department of Community and Economic Development will give Excelitas Technologies a $2.3 million grant to help it move its global headquarters to the Pittsburgh’s Strip District.
But here’s the kicker: That grant will cover fully half of what the photonics company that specializes in high-tech lenses and lighting applications says will be its move-in costs to a leased space.
The rationale for paying halvsies for a company with annual revenues of about $1.5 billion? That it will “create” at least 250 jobs in Pittsburgh. We’re not sure how many jobs will be transferred from its current Waltham, Mass., headquarters over the next four years.
But why on earth should taxpayers be expected to help cover Excelitas’ moving costs? Or, put another way, why should taxpayers be expected to cover the $9,200 cost per employee of those 250 jobs?
Simply put, they should not, on either count.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
