Pennsylvania Supreme Court invalidates Pittsburgh ‘jock tax’

Editor: Greg A. Fairbanks, J.D., LL.M.

In September 2025, the Pennsylvania Supreme Court struck down a Pittsburgh tax imposed on nonresident athletes and entertainers, finding that the tax violates the Uniformity Clause of the Pennsylvania Constitution. In National Hockey League Players’ Association et al. v. City of Pittsburgh, 343 A.3d 1165 (Pa. 2025), the court unanimously affirmed a lower court finding that the city’s 3% public facility usage fee (facility fee) unconstitutionally discriminated against nonresident athletes and entertainers who perform in the city’s publicly funded sports venues. The decision is consistent with the Pennsylvania courts’ historically strict interpretation of the Uniformity Clause of the Pennsylvania state constitution (Article VIII, §1).

Background and procedural history

Since 2005, Pittsburgh has levied a 3% nonresident public facility usage fee on nonresident athletes and entertainers who compete in athletic events or engage in other performances at a publicly funded sports stadium or arena in Pittsburgh. The city derives the taxing authority to impose the facility fee from the Local Tax Enabling Act of 1965, a state law that provides Pennsylvania localities other than Philadelphia with specific taxing powers. In contrast, Pittsburgh residents are not subject to the facility fee but instead are subject to the city’s 1% earned income tax (EIT) and a 2% school district tax. In the aggregate, city resident and nonresident athletes and entertainers are taxed at the same rates but under two different taxing regimes.

In November 2019, several active and retired professional athletes and players’ associations for the National Hockey League (NHL), Major League Baseball, and the National Football League filed a complaint with a state trial court, arguing that the facility fee treats nonresident athletes and performers less favorably than similarly situated resident athletes and performers, in violation of state uniformity principles. Pennsylvania’s Uniformity Clause requires that “[a]ll taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under the general laws.” The city argued that both residents and nonresidents pay the same total effective tax rate of 3%, since residents are also subject to a 2% school district tax that does not apply to nonresidents.

In September 2022, the Allegheny County Court of Common Pleas agreed with the taxpayers that the fee qualifies as a tax that violates state uniformity principles. In doing so, the court compared the 3% facility fee against the 1% resident EIT and found them not to be uniform. The court found “no permissible or rational basis for an unequal application of tax rates across residents and nonresidents.” Accordingly, the court ruled the fee unconstitutional in violation of state uniformity principles.

Pittsburgh appealed the trial court decision to the Pennsylvania Commonwealth Court, arguing that resident athletes and entertainers are subject to the same tax rate as nonresidents when the 2% school earnings tax is taken into account. The Commonwealth Court disagreed with the city and affirmed the trial court, finding that the 2% school district tax paid by Pittsburgh residents is not relevant to the uniformity analysis. Finding that the city failed to provide a reasonable justification for treating residents and nonresidents as distinguishable classes that may be subject to different tax burdens, the court affirmed the trial court and likewise concluded that the fee was unconstitutional. Pittsburgh petitioned the Pennsylvania Supreme Court for an allowance of appeal, which the court granted.

Supreme Court decision

In affirming both lower courts, the court found that Pittsburgh failed to provide a “concrete justification” for taxing nonresident athletes and entertainers at a higher rate than resident athletes and entertainers. The court rejected Pittsburgh’s argument that the facility fee does not impose an unequal tax burden on nonresidents because it equalizes the tax burdens of residents and nonresidents. In doing so, the court disagreed with the city that its decision in Minich v. City of Sharon, 77 A.2d 347 (Pa. 1951), controlled the outcome of this case. In Minich, the court upheld a 5–mill EIT imposed on residents plus a 5–mill school tax, and a 10–mill EIT with no school tax imposed on nonresidents. The city argued that Minich employed a “functional,” “rough uniformity” standard to uphold a local income tax scheme that was analogous to the facility fee. The court disagreed, finding that Minich applied no such functional analysis permitting taxing authorities to “manufacture uniformity” by aggregating distinct taxes into an overall tax that is roughly equal. Further, the court found that Minich did not employ the broad uniformity principles that the city attempted to read into the decision.

Turning to the taxpayers’ arguments, the court agreed with the taxpayers that its decision in Danyluk v. Bethlehem Steel Co., 178 A.2d 609 (Pa. 1962), was dispositive in the case at bar. Danyluk involved a $10 local occupational tax imposed upon nonresidents engaged in an occupation in the city of Johnstown. Residents were not subject to the occupational tax but instead paid a $10 per capita tax. The court held that a per capita tax only imposed upon residents could not be used to justify a nonuniform occupational tax on nonresidents.

The court relied on the Danyluk decision for the proposition that a locality “cannot use a tax which, of necessity, only applies to residents to cover up the discriminatory effect of a separate, disuniform tax on nonresidents.” In the court’s view, Pittsburgh’s 2% school district tax cannot be used to justify the imposition of the facility fee under the court’s Uniformity Clause jurisprudence. Concluding that Pittsburgh failed to provide a concrete justification for treating resident athletes and entertainers differently from nonresident athletes and entertainers, the court ruled the fee is unconstitutional.

Concurrences

In separate concurring opinions, two justices agreed with the majority that the facility fee violates the state Uniformity Clause, but for different reasons. The concurrences analyzed the overall burden of the city and school district taxes together to determine whether they resulted in discrimination between resident and nonresident performers. However, the justices concluded that Pittsburgh’s denial of a credit to nonresident athletes (in contrast to residents) was sufficient to render the fee unconstitutional under the court’s uniformity jurisprudence.

Implications

The court’s invalidation of the facility fee is the latest decision in a long line of uniformity cases recently considered by Pennsylvania courts, which historically have applied a rigid interpretation of the state’s Uniformity Clause. Most recently, in Alcatel–Lucent USA Inc. v. Commonwealth, 326 A.3d 816 (Pa. 2024), the state Supreme Court ruled that a taxpayer was not entitled to a refund of Pennsylvania corporate net income tax paid in the 2014 tax year when the taxpayer’s use of net operating loss (NOL) carryovers was limited by the state’s percentage limitation for NOL deductions. The case represented the third Pennsylvania Supreme Court decision ruling on the application of the Commonwealth’s complex and controversial NOL deduction provision, which began with the court striking down the fixed–dollar limitation on uniformity grounds in Nextel Communications of the Mid–Atlantic v. Pennsylvania Department of Revenue, 171 A.3d 682 (Pa. 2017). With respect to Pennsylvania property taxes, the court ruled in Valley Forge Towers Apartments, LP v. Upper Merion Area School District, 163 A.3d 962 (Pa. 2017), that the Uniformity Clause prohibited a school district from selectively appealing the tax assessments of commercial properties while passing over the assessment appeals of residential properties.

The court’s decision in National Hockey League Players’ Association likewise represents the latest case of professional athletes challenging the application of state and local “jock taxes” in nonuniform ways and at dissimilar tax rates for nonresident athletes compared to resident athletes. For example, the Ohio Supreme Court ruled in Hillenmeyer v. Cleveland Board of Review, 41 N.E.3d 1164 (Ohio 2015), that the games–played method for calculating Cleveland’s nonresident tax on professional athletes violated the Due Process Clause of the U.S. Constitution because the calculation of the tax included days in which athletes were not present in the city. In 2014, Tennessee repealed its $2,500–per–game professional privilege tax imposed on certain professional athletes after the NHL and National Basketball Association players’ associations challenged the tax on the basis that it did not apply to all professional sports played in the state (Tenn. H.B. 1134, Laws 2014).

The income tax treatment of sports enterprises and their players is distinctive due to the mobile nature of the business and the desire of states and localities to collect revenue on high–earning athletes and entertainers. Players have long been aware of the disparities in state and local tax burdens that exist in deciding where to live and what team to play for, often leading players to choose Florida or Texas franchises because these states do not impose a personal income tax. As discussed above, the local taxes imposed on nonresident athletes may be significant when aggregated with state taxes, even affecting those athletes establishing residency in non–income–tax states.

In the near term, Pittsburgh will be required to pay out refunds to athletes and entertainers who have paid a tax that is now invalid. The city will also be pressed to look for ways to replace the lost revenue previously collected from nonresident athletes and entertainers. Pittsburgh may also consider restructuring its EIT system such that similar taxes and rates are imposed on residents and nonresidents alike, as a means to ensure that they do not run afoul of the state’s strict uniformity requirements. On a broader scale, the National Hockey League Players’ Association case serves as a reminder that state and local taxes singling out nonresidents may be at risk for discriminatory treatment challenges in states with strictly interpreted uniformity clauses similar to Pennsylvania’s.

Editor

Greg Fairbanks, J.D., LL.M., is a tax managing director with Grant Thornton LLP in Washington, D.C.

For additional information about these items, contact Fairbanks at greg.fairbanks@us.gt.com.

Contributors are members of or associated with Grant Thornton LLP.