Pa. Supreme Court: District's Policy to Appeal Tax Assessments of Apartment Complexes Instead of Single-Family Homes Violates the State Constitution

The Pennsylvania Supreme Court recently held that commercial property owners stated a valid claim that school districts' decision to selectively appeal only commercial property assessments, such as apartment complexes, while choosing not to appeal the assessments of other types of property, such as  single-family residential homes, violated the state constitution's tax uniformity clause (Pa. Const. art. VIII, §1). The state supreme court reversed the dismissal of the commercial property owners' complaint and remanded the case for further proceedings. In Valley Forge Towers v. Upper Merion SD, No. 49 MAP 2016 (Pa. Jul. 5, 2017), commercial property owners sued the Upper Merion School District when the district, in appealing the value of under-assessed property, targeted apartment complexes because commercial property would produce more tax-revenue than under-assessed single-family homes. The district also acknowledged that it wished to avoid upsetting parents (and potential voters) by appealing single-family home assessments, even though eighty percent of the district's single-family homes were under-assesssed. The commercial property owners' complaint was dismissed on a demurrer. On appeal, the Pennsylvania Supreme Court noted that the state constitution's tax uniformity clause incorporates the same equal protection analysis as the Equal Protection Clause of the United States Constitution. The court rejected the school district's argument, however, that it needed only to provide a rational basis for the deliberate and selective discrimination between commercial and single-family properties. The supreme court held that the district's appeal policy violated the Uniformity Clause, which "prohibits disparate treatment of sub-classifications of property in order to avoid political accountability employed by a taxing district lies within its discretion." Because the commercial property owners sufficiently alleged such discrimination, the court found that their complaint set forth a valid claim that the school district’s appeal policy violated the Uniformity Clause. Valley Forge Towers v. Upper Merion SD, No. 49 MAP 2016 (Pa. Jul. 5, 2017) is available here.