PITTSBURGH – Professional athletes shouldn’t have to pay the City of Pittsburgh a tax for competing at its stadiums, the Pennsylvania Supreme Court has ruled in striking the so-called “jock tax.”
The opinion entered Sept. 25 agrees with lower courts that found the tax unconstitutionally discriminates against nonresidents. It’s a win for the players associations of the NHL, NFL and Major League Baseball, who were joined in the legal challenge by hockey players Kyle Palmieri Scott Wilson and former MLB player Jeff Francoeur.
They had filed suit six years ago in the Allegheny County Court of Common Pleas, complaining, among other things, that Wilson had to pay Pittsburgh $6,000 in 2016. Lawyers for the challengers had successfully overturned similar taxes in other states, like Ohio and Tennessee.
Pittsburgh argued that because it financed the construction of its major sports stadiums with taxpayer money, it had the right to tax athletes up to 3% to make that money back.
“(W)e must determine whether there exists ‘some concrete justification’ for treating the relevant taxpayers as members of distinguishable classes,” Justice David Wecht wrote.
“Absent such a legitimate distinction, the imposition of unequal tax burdens upon similarly situated taxpayers is unconstitutional. Here, the City does not provide concrete reasons that would justify taxing nonresident athletes and entertainers more than resident athletes and entertainers.”
Athletes and entertainers were exempt from the City’s 1% earned income tax but still paid 3% of what they earned in Pittsburgh to the City. Residents pay 1% to the City and 2% to the school district.
That had Pittsburgh arguing there was no discrepancy – both paid a total of 3%. But the Supreme Court found that wasn’t the case, analyzing the state’s history of nonresident taxes and rejecting the idea a previous ruling in a case involving the City of Sharon.
Instead, the court relied on its ruling in the case Danyluk v. Bethlehem Steel Co. That lawsuit involved a $10 occupational tax in Johnstown that nonresidents who worked in that city had to pay.
Residents paid a similar $10 per capita tax. “Residence cannot be made the basis of discrimination in taxation of persons engaged in the same occupation or profession,” that ruling said.
Wecht wrote the Danyluk ruling is “hard-to-parse” but concluded it should be read to mean a city cannot use a tax, like the extra 2% resident athletes and entertainers pay to the school district to equal the 3% nonresidents pay, “to cover up the discriminatory effect of a separate, disuniform tax on nonresidents.”
The tax was first struck by Judge Christine Ward in 2022, then again by the Commonwealth Court in 2024.
