Philadelphia property owners have been the underdogs in property tax appeals for many years. On the heels of a recent landmark ruling that commercial properties were unconstitutionally targeted by the City of Philadelphia for revaluation, comes an important case involving reverse tax appeals by local school districts.
In 2016, the Philadelphia School District filed 138 selective appeals solely against commercial properties. Taxpayers filed motions to quash the third-party appeals charging that the School District had violated Pennsylvania’s Uniformity Clause by selecting only commercial properties.
The Uniformity Clause of the Pennsylvania Constitution provides that “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 Uniformity Clause ensures that a taxpayer pays no more or no less than his proportionate share of the cost of government.
During the course of preliminary proceedings, the Philadelphia School District admitted that it had a policy to pursue appeals where there was a likelihood to obtain a $7,500 increase in tax revenue. The School District explained that it used a monetary threshold to determine which appeals to file and this policy conformed to the requirements of the Uniformity Clause.
On August 22, Commonwealth Court Judge Mary Hannah Leavitt ruled that the school district must be given the chance to show it didn't intentionally target commercial properties in violation of the Uniformity Clause.
Specifically, the opinion said the trial court lacked an evidentiary record, which it needed to reach the legal conclusion that the School District’s tax appeals were discriminatory. Judge Leavitt wrote, “We vacate and remand the matters for further proceedings.” The ruling can be found at this link.