In the mix with coverage of the Steelers’ trip to Ireland, the Pirates’ season wrapping up, the Penguins’ season about to start and the slate of fall concerts is the Pennsylvania Supreme Court’s ruling that the “non-resident sports facility usage fee” or “jock tax” is unconstitutional. The fee was levied on non-resident athletes and performers who utilized a publicly funded facility in the city. This upholds lower court decisions on a lawsuit filed in 2019.
As noted in a July 2024 blog, the Supreme Court permitted a “limited appeal” on the uniformity of the tax. The majority opinion ruled “the City does not provide concrete reasons that would justify taxing nonresident athletes and entertainers more than resident athletes and entertainers. Instead, the City once again argues that the facility fee ‘does not impose an unequal tax burden on nonresidents’ because it actually equalizes the tax burden of resident and nonresident performers” (italics in original).
The opinion concludes that “[b]ecause the two percent Pittsburgh School District tax cannot be used to justify the facility fee in our Uniformity Clause analysis…we agree with the lower courts that the facility fee is unconstitutional.”
Interestingly, the opinion states that the General Assembly granted Pittsburgh permission to levy the jock tax not because it spent money to construct the stadiums, but to provide for additional revenue to the city as it entered Act 47 distressed status.
What are the immediate and long-term impacts for the city’s finances? The city budgeted $6.1 million for 2025; through August it collected $2.5 million. The five-year forecast had annual collections above $6 million through 2029. With the ruling coming days before the submission of the 2026 preliminary budget (and possibly after the certification of the five-year revenue forecast) does that alter the timeline for the budget (there was no preliminary budget for 2021 and budgets have been amended for federal COVID aid and contract settlements in recent years)?
Will collections for this year and previous years be refunded?
The 2004 state legislation authorizing the jock tax states that if a court strikes down the tax nonresident performers would be subject to the city’s 1 percent earned income tax. Is that an avenue the city pursues? How much money would it raise?
Will the city adjust its spending and services to deal with the ruling and possible refunds? Seems like a great opportunity to do so with a new mayoral administration coming next year.
