If Taxes Are Uniform Upon Same Class of Subjects Then Is a Hotel Owner Required to Pay Tax for Something Which Does Not Benefit Him
In Allegheny County v. Monzo, 509 Pa. 26, 500 A.2d 1096 (1985), the owner of a hotel on the outskirts of Allegheny County challenged the one percent hotel room rental tax imposed county-wide to finance the construction of a convention center in Pittsburgh under Section 1970.2 of the Second Class County Code, Act of July 28, 1953, P.L. 723, as amended, added by Section 1 of the Act of December 16, 1977, P.L. 323, 16 P.S. 4970.2.
The hotel owner argued that a convention center in downtown Pittsburgh would benefit nearby hotels to a great degree, but it would not benefit those farther away, such as his.
The Supreme Court stated:
"Where the benefit received and the burden imposed is palpably disproportionate, a tax is not only a taking without due process under the Fourteenth Amendment to the United States Constitution, but also an arbitrary form of classification in violation of equal protection and state uniformity standards." Monzo, 509 Pa. at 38, 500 A.2d at 1102.
Further, the court explained that hotels in surrounding municipalities were required to collect and pay a tax that provided no benefit to that portion of the class but that enabled Pittsburgh hotels and businesses near the convention center to benefit immeasurably, stating that the owner's hotel "in essence, is being required to finance its competition." Id. at 42, 500 A.2d at 1104.
The court held that under those circumstances the tax violated the requirement of Article VIII, Section 1 of the Pennsylvania Constitution that taxes "be uniform upon the same class of subjects...."