Friends of PaLCS, Aplt v. Chester Cty Bd of Assess ( 2014 )

[J-11-2014] [MO: Baer, J.]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
FRIENDS OF PENNSYLVANIA : No. 66 MAP 2013
LEADERSHIP CHARTER SCHOOL, :
: Appeal from the Order of the
Appellant : Commonwealth Court dated January 16,
: 2103 at No. 790 CD 2012 affirming the
: order of the Chester County Court of
v. : Common Pleas, Civil Division, entered
: March 30, 2012 and exited April 2, 2012 at
: No. 2011-09438-AB.
CHESTER COUNTY BOARD OF :
ASSESSMENT APPEALS, : ARGUED: March 12, 2014
:
Appellee :
:
WEST CHESTER AREA SCHOOL :
DISTRICT, :
:
Intervenor :
CONCURRING OPINION
MR. JUSTICE EAKIN DECIDED: September 24, 2014
I agree with the majority’s holding § 1722-A(e)(3) violates the separation of powers
doctrine, but I also find meritorious West Chester Area School District’s argument that §
1722-A(e)(3) violates the constitutional guarantee of uniform taxation, which the majority
declined to address. See Majority Slip Op., at 11 n.9. Specifically, the School District
argues § 1722-A(e)(3) violates the Uniformity Clause by treating identically situated
property differently for taxation purposes and by excluding from the retroactive exemption
those charter schools, cyber charter schools, and associated nonprofit foundations that
failed to file an assessment appeal prior to the statute’s effective date.
The Uniformity Clause provides, “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.” Pa. Const. art. VIII, § 1. “Taxation, however, is not a
matter of exact science; hence[,] absolute equality and perfect uniformity are not required
to satisfy the constitutional uniformity requirement.” Clifton v. Allegheny County, 969
A.2d 1197, 1210 (Pa. 2009) (citing Leonard v. Thornburgh, 489 A.2d 1349, 1352 (Pa.
1985); In re Harleigh Realty Co., 149 A. 653, 654 (Pa. 1930) (“Scientific formulae,
arithmetical deductions and mental contemplations, have small value in making
assessments under our practical system of taxation.”)). “Some practical inequalities are
obviously anticipated, and so long as the taxing scheme does not impose substantially
unequal tax burdens, rough uniformity with a limited amount of variation is permitted.”
Id., at 1210-11 (citation omitted); see also Delaware, L. & W. R. Co.’s Tax Assessment,
73 A. 429, 430 (Pa. 1909) (noting Uniformity Clause requires only “substantial uniformity,
which means as nearly uniform as practicable in view of the instrumentalities with which
and subjects upon which tax laws operate”). A taxpayer who believes he has been
subjected to unequal taxation due to an allegedly unconstitutional statute must
demonstrate: “(1) the enactment results in some form of classification; and (2) such
classification is unreasonable and not rationally related to any legitimate state purpose.”
Clifton, at 1211 (citation omitted).
Here, § 1722-A provides for prospective and retrospective tax relief.
Prospectively, § 1722-A(e)(1) exempts from real estate taxation: (1) property directly
owned by a charter school, cyber charter school, or an associated nonprofit foundation; or
(2) property owned by a nonprofit corporation or foundation that is leased to a charter
school, cyber charter school, or an associated nonprofit foundation at or below fair market
value. 24 P.S. § 17-1722-A(e)(1). Thus, nonprofit landlords leasing property to a
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charter school are exempt from all taxation, while similarly situated nonprofits leasing to
otherwise exempt organizations do not receive any exemptions. See id.
Retrospectively, § 1722-A(e)(3) applies only to those charter schools, cyber charter
schools, and associated nonprofit foundations that filed a tax assessment appeal. Id., §
17-1722-A(e)(3). Because only entities that directly own property can file an appeal from
a tax assessment, only the first class of entities included in § 1722-A(e)(1) may obtain
retrospective tax relief under § 1722-A(e)(3); entities that lease property are ineligible.
Id. Similarly, entities that directly own property but failed to file an appeal from a tax
assessment are ineligible for retrospective tax relief. Id.
By treating identically situated taxpayers differently for taxation purposes and
excluding from the retrospective exemption entities that failed to or could not file an
assessment appeal, § 1722-A results in classifications that are unreasonable and not
rationally related to any legitimate state purpose. See Clifton, at 1211 (citation omitted).
The provisions of § 1722-A impose unequal tax burdens and therefore violate the
Uniformity Clause. See, e.g., id., at 1228-29 (holding inequitable assessments amongst
similarly situated taxpayers violated Uniformity Clause); City of Harrisburg v. School
District of the City of Harrisburg, 710 A.2d 49, 53-54 (Pa. 1998) (holding unequal tax
treatment of lessees of public and nonpublic property violated Uniformity Clause).
That said, I concur in affirming the Commonwealth Court because, as explained by
the majority, § 1722-A(e)(3) also violates the separation of powers doctrine and is
therefore unconstitutional.
Mr. Chief Justice Castille joins this concurring opinion.
[J-11-2014] [MO: Baer, J.] - 3