Explaining Pittsburgh's 'Jock Tax' as Athletes, Players' Unions Sue City

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For more than two centuries, “no taxation without representation” has served as a powerful political slogan. It conveys a basic idea that lies at the heart of democracy: governments shouldn’t tax those who are denied representation.

Could the slogan now empower New Jersey Devils right wing Kyle Palmieri and Buffalo Sabres center Scott Wilson to put Pittsburgh’s “jock tax” on ice?

The two players, along with former Major League Baseball outfielder Jeff Francoeur and the players’ associations for NHL, MLB and NFL players, recently filed a complaint in an Allegheny County (PA) court against the City of Pittsburgh. They contend the city has adopted a tax scheme that unlawfully disfavors professional athletes who don’t reside there.

Pittsburgh mostly eschews the word “tax” in describing what state law labels a “fee.” In 2004, the Pennsylvania Legislature adopted a statute known as the “nonresident sports facility usage fee.” It authorizes Pennsylvania cities with publicly funded sports facilities to enact a usage fee on nonresident athletes. The fee can constitute a flat dollar amount or a percentage of the athlete’s income attributable to using the facility.

A key justification for the fee is to protect the financial interests of a city’s taxpayers. If those taxpayers foot part of the bill for construction of a sports facility that out-of-town athletes later use, those athletes ought to chip in. At least that is what advocates for the fee contend.

Pittsburgh promptly took advantage of the 2004 law by adopting a design for nonresident athletes to pay up. Per city ordinance, athletes pay a fee equal to 3% of their taxable “earned income” allocable to the days in which they play games in PPG Paints Arena, Heinz Field or PNC Park. Earned income is inclusive of any salaries, wages and bonuses.

Understanding how the fee works

Calculating the fee for athletes varies by sport. NHL and MLB players must first compute a fraction. Specifically, they take the number of games they play in Pittsburgh as the numerator and then total games played (including regular season as well as pre- and post-seasons) as the denominator. This fraction is then multiplied against total compensation for the year. That dollar amount is then taxed at 3%.

This might sound a little complicated but it really isn’t. Take Palmieri. During the 2019 calendar year, Palmieri will have played twice at PPG Paints Arena. This means “2” is the numerator. The denominator is also easy to identify. Between regular season and preseason games, the 28-year-old former Notre Dame star will have played in about 70 games total in 2019. If that estimate proves correct, the applicable fraction would be 2/70 or 2.9%.

Now turn to Palmieri’s salary for 2019. It is approximately $5 million and 2.9% of $5 million is $145,000. Then, to determine the tax owed, take 3%—the city’s usage fee—of $145,000. The bill: $4,350.

To be clear, these figures are only estimations. They also don’t take into account the NHL escrow tax, whereby a portion of Palmieri’s contract would be held in escrow as a method for teams and players to share revenue. Still, the numbers ballpark the amount of money Palmieri will likely owe Pittsburgh for the ability to play hockey games in that city during 2019.

The formula is different for NFL players. They must use the total days they spend in the city as the basis for determining the fee.

When tax law treats out-of-town athletes differently than others

According to attorney Charles Potter and other attorneys representing the players, whether the “fee” is called a fee or a tax is immaterial. It functions as a tax, explicitly draws on “taxable” income and has sometimes been described by the city as a tax.

The 3% tax is three times higher than the tax imposed by the city on all other types of nonresidents—be they out-of-town businesspersons, physicians or visiting professors—who earn income in the city. Those professionals are only taxed at a rate of 1%, which, so long as they live elsewhere in Pennsylvania and aren’t athletes, they can use a credit to offset other tax obligations.

The net result of this fee/tax arrangement is reflected in the following table, as contained in the players’ complaint:

Type of TaxpayerCity of Pittsburgh General Revenue Income TaxEffective City of Pittsburgh General Revenue Income Tax Rate

Nonresident Income Earners Who Reside in Pennsylvania



Nonresident Income Earners Who Reside Out-of-State



Resident Income Earners



Resident Professional Athletes



Nonresident Professional Athletes Who Reside in Pennsylvania



Nonresident Professional Athletes Who Reside in Other States



*Nonresident professional athletes who reside in Pennsylvania must also pay an additional 1% local earned income tax, against which they receive no credit for amounts paid to Pittsburgh under the nonresident professional athlete tax. 

This arrangement makes one point very clear: If you are a pro athlete who plays games in Pittsburgh, you receive a financial benefit by residing in Pittsburgh.

Palmieri’s situation illustrates this point. He paid the City of Pittsburgh about $8,600 from 2016 to 2018 in taxes. If he had resided in Pittsburgh during that time, he would have paid only a 1% tax. He is treated differently—and worse—because of his residence and occupation.

You might respond with something to the effect of, “big deal.” Palmieri has earned multi-million annual salaries as part of the five-year, $23.25 million deal he signed in 2016. Palmieri paying a comparatively trivial $8,600 won’t elicit much sympathy from most taxpayers.

There are two potential rebuttals. First, if Palmieri played for the Penguins but resided outside of Pittsburgh and particularly outside of Pennsylvania, he would pay significantly more. Second, principle matters. If a tax is unconstitutional, no taxpayer, regardless of how much he or she earns, should have to pay it.

Key legal issues

With that in mind, the players and their attorneys assert that Pittsburgh’s “disuniform” arrangement is illegal under both state and federal law. As noted in their complaint, Article 8 of Pennsylvania’s constitution expresses that “all 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 general laws.” The phrase “same class of subjects” arguably includes pro athletes whether they live in Pittsburgh or not. Further, the Supreme Court of Pennsylvania has held that “residence cannot be made the basis of discrimination in taxation of persons engaged in the same occupation or profession.” Such language seems supportive of the players’ argument.

The players also contend that Pittsburgh’s fee violates the United States Constitution. Among other constitutional arguments, the players insist that the fee fails to comply with due process protections found in the Fourteenth Amendment to the U.S. Constitution. From that lens, the players are being deprived of “property” without a meaningful chance to contest it. The players aren’t residents in Pittsburgh and thus can’t vote to change the ordinance.

In response to these and other legal arguments, Pittsburgh will maintain that the fee is a rational and lawful mechanism to raise revenue. In that same vein, Pittsburgh will stress that the fee ensures out-of-town users of publicly funded sports facilities pay a fair share and not free ride. In addition, the city will underscore that it has substantial discretion under state law and the city’s charter to institute and collect fees.

This isn’t the first “jock taxes” case to surface in recent years. As we discussed in 2015, two retired players NFL players, Jeff Saturday and Hunter Hillenmeyer, successfully challenged Cleveland’s jock tax scheme. That case, which was litigated through Ohio’s court system, is not binding precedent on the Pittsburgh litigation. However, it reflects an encouraging sign for Palmieri, Wilson and others on their side.

Michael McCann is SI's legal analyst. He is also an attorney and the Director of the Sports and Entertainment Law Institute at the University of New Hampshire Franklin Pierce School of Law.

Robert Raiola, is the Director of the Sports & Entertainment Group of the CPA and Advisory Firm PKF O’Connor Davies.