A “jock tax” is a state or local income tax levied against a visiting professional athlete who has derived income from that jurisdiction.

Former and current professional athletes, along with the players’ associations of the NHL, NFL and MLB, have filed suit against the city of Pittsburgh alleging it is levying a discriminatory, unconstitutional jock tax. Francoeur, et al. v. City of Pittsburgh, Docket No. GD-19-015542 (Pa. Comm. Pleas Ct.)

Although Pittsburgh does not define it as a tax, Pittsburgh levies a 3% “nonresident facility usage fee” on nonresident professional athletes’ earned income who use Pittsburgh’s publicly funded facilities to engage in an athletic event.

A professional athlete’s tax liability is determined based on his or her sport. A professional football player’s liability is determined by a ratio of duty days spent in Pittsburgh over his total duty days in that tax year. Pittsburgh defines “duty days” as preseason, regular season and postseason games and practice sessions.

Thus, if a visiting NFL player spends three duty days in Pittsburgh and has a total of 200 duty days in a tax year, 1.5% of his earned income will be subject to Pittsburgh’s 3% jock tax.

Other professional athletes are subject to a “games played” ratio. As the name implies, the tax liability of all professional athletes other than football players is determined by the number of games played in Pittsburgh over their total games played.

For example, if an NHL player plays six of his 82 games in Pittsburgh, 7.3% of his earned income is subject to this 3% jock tax.

A majority of states and several major cities impose a jock tax, many of which have faced scrutiny.

In 2015, the Ohio Supreme Court held that Cleveland’s jock tax was unconstitutional. Hillenmeyer v. Cleveland Board Of Review, 144 Ohio St. 3d 165 (Ohio 2015). The court found that Cleveland’s games played ratio violated the Constitution’s due process clause because it imposed an extraterritorial tax on compensation earned by professional athletes working outside of Cleveland.

The court’s reasoning was that professional athletes’ salaries are not earned strictly from games played, but also earned from practices, mandatory team events, etc.

In 2014, Tennessee legislators voted to repeal its jock tax. Instead of using a taxing ratio, Tennessee levied a $2,500 flat rate on all team members per game and capped the total possible tax liability at $7,500. The motivation for repealing the tax was not the flat tax rate, but the fact that professional basketball and hockey players were subject to the tax, but NFL players were exempt.

Similar to Ohio and Tennessee, plaintiffs allege in their complaint that Pittsburgh’s nonresident facility usage fee is a tax and that this tax is unconstitutional on both the state and federal levels.

Regarding the characterization of this nonresident facility usage fee, plaintiffs contend the fact that Pittsburgh levies this usage fee on all earned income by an athlete, and not a flat fee, demonstrates that it is undoubtedly a tax. The city of Pittsburgh faces an uphill battle since its general earned income tax operates in an almost identical manner by imposing a 1% tax rate on earned income of residents and 1% tax rate on nonresidents who work in Pittsburgh.

The remaining counts allege that Pittsburgh is discriminating against nonresident professional athletes, and thus, the tax is unconstitutional on both the federal and state levels.

Plaintiffs first contend that the tax provides preferential treatment to resident professional athletes, which they argue violates Pennsylvania’s uniformity clause and the federal commerce clause.

In 1977, the U.S. Supreme Court established a four-prong test to determine the constitutionality of a state tax under the Constitution’s commerce clause. Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977). One of the four prongs established in Complete Auto requires the tax to be nondiscriminatory, specifically that interstate and intrastate taxes should not favor one over the other.

A 3% rate is imposed on nonresident professional athletes while resident professional athletes are subject to only a 1% rate. On its face, this usage fee appears to provide preferential treatment to resident professional athletes.

Two other requirements under Complete Auto are that the tax must fairly relate to the services provided and the tax must be fairly appointed. The plaintiffs allege that the games played ratio applied to all professional athletes other than football players violates Pennsylvania’s and the federal due process clauses and the federal commerce clause.

Although Hillenmeyer is not binding precedent in Pennsylvania, the decision and rational will likely be considered in this case. If the Pennsylvania court decides to adopt the Ohio Supreme Court’s position, it is likely to hold that this usage fee imposes an extraterritorial tax, and thus, a violation of due process. This same rational can be applied to the commerce clause.

Lastly, the plaintiffs allege that the jock tax violates the Constitution’s equal protection clause. Specifically, they argue that it arbitrarily imposes a greater burden on nonresident professional athletes compared to both resident professional athletes and any other profession.

This equal protection claim was also considered in Hillenmeyer. There the court determined that because professional athletes are typically highly paid and their work is easy to find, a city could earn revenue with comparative ease. Furthermore, it was determined that the Cleveland City Council could rationally find that professional athletes and their events require much larger public services. For these two reasons, Ohio determined that Cleveland’s jock tax did not violate the equal protection clause.

The plaintiffs in this case will face difficulty in succeeding on this claim. Equal protection claims are analyzed by applying the rational basis standard unless the members bringing the claim are considered a protected class. Professional athletes do not fall under the category of a protected class. Thus, as seen in Hillenmeyer, legislatures only need to show a rational basis for the tax.

However, the plaintiffs in this case argue that there is no rational basis for this greater tax burden compared to all other professions and resident professional athletes. Although this argument somewhat differs from Hillenmeyer. Pittsburgh only needs to show that it has a rational basis for the jock tax. Generally, a tax analyzed under this rational basis scrutiny is found in favor of the state or city.

In conclusion, there is a real chance a Pennsylvania court will strike down Pittsburgh’s jock tax due to issues with the commerce clause and due process concerns. However, there is an equal chance that Pennsylvania will follow Ohio’s position that a jock tax is not discriminatory on its face.

Instead, it may be determined unconstitutional as it is applied to resident and nonresident professional athletes differently as well as the inconsistent formulas applied to different athletes by sport.

Unless Pennsylvania finds that a jock tax violates the equal protection clause, a holding in favor of plaintiffs will only require Pittsburgh to reformulate its jock tax and not completely eradicate it.