A divided Pennsylvania Supreme Court ruled that the state’s mechanism for assessing local taxes on non-Philadelphia casinos’ slot machine revenue is unconstitutional, but gave the legislature four months to try to come up with a solution. Meanwhile, a federal court battle over reimbursement may also be brewing.
In a Sept. 28 decision in Mount Airy #1 v. Pennsylvania Department of Revenue, the court ruled 5-1 to invalidate Subsection 1403(c)(3) of the state Race Horse Development and Gaming Act because it impermissibly splits non-Philadelphia casinos into two categories—those with gross terminal revenue below $500 million and those with GTR above $500 million—and taxes them differently so that the latter group will always pay more in local taxes than the former. This variable-rate tax violates the uniformity clause of the state constitution, the court said.
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