September 28, 2016

PA Supreme Court Holds Local Casino Assessment Share Unconstitutional

[Via PLS Reporter]-- In an opinion issued Wednesday, the PA Supreme Court found the local and county share assessments placed on casinos as unconstitutional. The court deemed the assessments violative of the uniformity clause.
The case-- Mount Airy #1, LLC v. PA Dept. of Revenue--  Mount Airy casino argued the $10 million automatic local share assessment placed on all casinos outside of Philadelphia is violative of the uniformity clause of the Pennsylvania Constitution.
In a 4-2 decision, the Supreme Court agreed.  The court said--
"Here, the General Assembly essentially created a variable-rate tax, fashioning one rate for non-Philadelphia casinos with [Gross Terminal Revenue] GTR below $500 million, and another for non-Philadelphia casinos with GTR greater than $500 million.
"Our case law teaches that such quantitative distinctions lack uniformity because any 'classification that is based solely on a difference in quantity of precisely the same kind of property is necessarily unjust, arbitrary, and illegal.'"
While Mount Airy argument focused on the municipal share assessment, the court in severing the portion of the tax from the Gaming Act, also included the county share due from casinos.
"[T]he overlap between Subsection 1403(c)(3)’s municipal local share assessment and Subsection 1403(c)(2)’s county local share assessment is unmistakable," Justice Wecht wrote.
“Together the two assessments form a comprehensive system of local taxation, which takes into account each gaming facility’s GTR and 'category.'"
In noting that their ruling will likely have an effect on municipalities and counties relying on the casino assessment to fill their coffers, the court stayed the enforcement of its holding 120 days-- until the end of January--  to allow the General Assembly time to determine how to proceed.
  The General Assembly only has six voting session days scheduled in October and only a select few days in November scheduled after the election.
The new legislature is slated to be sworn-in January 3.
A copy of the opinion is available online.