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PA Supreme Court Upholds Property Tax Challenge

Notebook with property tax  sign on a table.

The Pennsylvania Supreme Court has reversed the ruling of a lower court, validating a taxpayer’s claim against a school district. In Valley Forge Towers Apartments N, LP, v. Upper Merion Area School District, the state’s high court found that the lower court had wrongfully dismissed a complaint filed by a taxpayer, who had alleged that the school district’s policy of appealing only the assessment of commercial property owners in its district was contrary to the uniformity clause of the Pennsylvania constitution.

In its opinion, the PA Supreme Court reiterated and clarified legal precedent governing classification of taxable entities in a district:

  • According to prior rulings, all property in a district falls into a single class. The uniformity clause therefore prohibits the creation of subclasses of property, and does not allow the government to treat properties differently for any reason
  • The prohibition established by the uniformity clause governs all systematic or intentional applications of the property tax laws, and not just wrongful conduct

In the matter before the court, the plaintiff had filed suit in the Commonwealth Court in Montgomery County, but the Court of Common Pleas had dismissed the action. The Supreme Court remanded the matter back to the Montgomery Court of Common Pleas, noting that a taxing authority (here, the Upper Merion Area School District) cannot “implement a program of only appealing the assessment of one sub-classification of properties..” The court further stressed that the sub-classification would be constitutionally impermissible if based on any “type” of property, including single family, commercial, industrial or apartment complexes.

Advocates for property owners say the decision is a big win, providing a means for taxpayers to meaningfully challenge what are often unilateral actions by tax authorities.

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