On April 10 the Pennsylvania Supreme Court heard oral arguments in NHL v. Pittsburgh, which deals with an issue becoming familiar to Pennsylvania lawyers: the legality of municipal tax schemes intended to maximize revenue from nonresidents. The supreme court’s decision in this case could either present much-needed tempering to jurisdictions counting on judicial deference to seek external sources of revenue, or it could further weaken the legal protections that nonresidents rely on in place of electoral influence.
NHL v. Pittsburgh concerns the Steel City’s 3 percent facility tax, which applies solely to nonresidents who earn income making use of the city’s facilities. This type of assessment, nicknamed a “jock tax,” functionally is a tax obligation on nonresident professional entertainers and athletes — as well as unfortunate support staff members.
While state and local jock taxes are common, how Pittsburgh assesses them is unique. Most states and localities levying jock taxes simply apply their existing income or earnings taxes to the jocks in question or otherwise create an identical tax that applies to nonresident athletes and entertainers.
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