UPDATED JUNE 2019
PENNSYLVANIA SUPREME COURT ISSUES ANOTHER DECISION IN A SERIES OF UNIFORMITY RULINGS PROTECTING TAXPAYERS
In an April 2019 decision, the Pennsylvania Supreme Court issued yet another ruling in a series of decisions over the last decade consistently upholding the constitutional requirement of uniformity in taxation in favor of taxpayers. In Sands Bethwork Gaming, LLC v. Pennsylvania Department of Revenue, 216 MM 2017 (Pa. Apr. 26, 2019), the Supreme Court ruled that a statute that taxed gaming revenue at different thresholds and then re-distributed the proceeds violated the Uniformity Clause.
The Pennsylvania Constitution provides “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax. . . .” In Sands, all seven Justices agreed in the result, declaring the statutory section to be unconstitutional; five Justices made up the majority and two Justices concurred. The concurrence, authored by Justice Wecht (who was the author of the Court’s 2016 Mount Airy decision) is particularly strong. Justice Wecht begins with a refresher that Pennsylvania’s Uniformity Clause was adopted in the late 1800’s in a “populist backlash against the preferential tax treatment that the legislature often had extended to favored industries and individuals.” He noted that as a result of those preferential laws “[t]he burden of maintaining the state had been, in repeated instances, lifted from the shoulders of favored classes, and thrown upon the remainder of the community.” The Uniformity Clause was the specific remedy fashioned by the delegates to the constitutional convention to prevent “certain groups from having to shoulder the benefits of progress from which all would benefit.”
Unfortunately, in Pennsylvania, most local school districts, some local assessors and some trial courts seem to have lost sight of the requirement of constitutional uniformity in taxation. Pennsylvania’s Supreme Court, refreshingly, has not.
The Sands decision follows the Court’s recent decisions in:
- 2017, Nextel v. Commonwealth, 171 A.3d 682 (Pa. 2017)(declaring that a corporate income tax statute that required corporations that met an income threshold to pay an income tax, whereas corporations that did not meet the threshold wholly escaped taxation, violates the Uniformity Clause);
- 2017, Valley Forge Towers v. Upper Merion School District, 124 A.3d 962 (Pa. 2017)(declaring that a school district policy targeting only commercial property owners for increase assessment appeals violates the Uniformity Clause);
- 2016, Mount Airy #1 v. Pennsylvania Department of Revenue, 154 A.3d 268 (Pa. 2016)(declaring that a gaming statute setting a graduated-rate income tax violates the Uniformity Clause)
- 2012, Tech One v. Allegheny County, 53 A.3d 685 (Pa. 2012) (acknowledging the “logic and force” of the trial court’s finding that treating some real estate as exempt from taxation solely because it is owned as a leasehold interest rather than in fee simple would violate the Uniformity Clause, but deferring a ruling on those grounds because it had already ruled that real estate cannot be classified differently for purposes of taxation based on the manner in which it is owned)
- 2009, Clifton v. Allegheny County (Pa. 600 Pa. 662 (Pa. 2009)(ruling that “base year” system of assessment was unconstitutional as applied in Allegheny County because it did not consider real estate valuation changes; and ordering county to re-assess);
- 2006, Downingtown Area School District v. Chester County Board of Assessment, 913 A.2d 194 (Pa. 2006)(ruling that a taxpayer may bring evidence of assessment-to-value ratio of similar shopping centers in challenging uniformity of taxpayer’s assessment);
We have called the Uniformity Clause the “fourth approach to value”. The Uniformity Clause is the underpinning of all taxation and should inform the strategy of every assessment appeal.
To discuss the specifics of your property, please contact Siegel Jennings at:
Sharon F. DiPaolo, Esquire
Siegel Jennings, Co., L.P.A.
American Property Tax Counsel (APTC)