In re Consol. Appeals of Chester-Upland Sch. Dist., No. 55 MAP 2019
| Decision Date | 01 October 2020 |
| Docket Number | No. 57 MAP 2019,No. 55 MAP 2019,No. 56 MAP 2019 |
| Citation | 238 A.3d 1213 |
| Parties | IN RE: CONSOLIDATED APPEALS OF CHESTER-UPLAND SCHOOL DISTRICT and Chichester School District from the Decisions of the Board of Assessment Appeals of Delaware County, Pennsylvania for Various Tax Years and Various Real Properties Appeal of: Outfront Media Inc., Clear Channel Outdoor, Inc., Well Street Media, LLC, Beit Jala, Inc., the Estate of Terry Steen, Anita Steen, and Anter Associates L.P. In re: Consolidated Appeals of Chester-Upland School District and Chichester School District from the Decisions of the Board of Assessment Appeals of Delaware County, Pennsylvania for Various Tax Years and Various Real Properties Appeal of: Outfront Media Inc., Clear Channel Outdoor, Inc., Well Street Media, LLC, Beit Jala, Inc., the Estate of Terry Steen, Anita Steen, and Anter Associates L.P. In re: Consolidated Appeals of Chester-Upland School District and Chichester School District from the Decisions of the Board of Assessment Appeals of Delaware County, Pennsylvania for Various Tax Years and Various Real Properties Appeal of: Outfront Media Inc., Clear Channel Outdoor, Inc., Well Street Media, LLC, Beit Jala, Inc., the Estate of Terry Steen, Anita Steen, and Anter Associates L.P. |
| Court | Pennsylvania Supreme Court |
Robert L. Byer, Esq., Alan C. Kessler, Esq., George John Kroculick, Esq., Daniel Lawrence Mita, Esq., John Everett Moriarty, Esq., Brian Jeffrey Slipakoff, Esq., Duane Morris, L.L.P., for Appellant Outfront Media and Well Street Media, LLC.
Leslie M. Gerstein, Esq., H.A. Steen Industries, Inc., for Appellant Estate of Terry Steen, Anita Steen and Anter Associates, LP.
Eugene Francis Jarrell III, Esq., for Appellant Jala, Beit, Appellee Upper Chichester Township.
Jennifer Weidler Karpchuk, Esq., Chamberlain Hrdlicka, Stewart M. Weintraub, Esq., Chamberlain, Hrdlicka, White, Williams & Aughtry, for Appellant Clear Channel Outdoor.
James J. Byrne Jr., Esq., McNichol, Byrne & Matlawski, P.C., for Appellees Delco Board of Assessment Appeals Solicitors, Board of Assessment Appeals of Delaware County.
Francis John Catania, Esq., County of Delaware, for Appellee Upper Chichester Twp. Solicitor.
Mark Dixon Damico, Esq., Petrikin, Wellman, Damico, Brown & Petrosa, P.C., for Appellees Crozer Chester Medical Center, CCMC.
Robert M. DiOrio, Esq., DiOrio & Sereni, L.L.P., for Appellee Chester Upland School District.
Howard J. Gallagher III, Esq., F. Kirk Adams & Associates, for Appellee Upper Chichester Township.
Rocco Peter Imperatrice III, Esq., Imperatrice, Amarant & Bell, P.C., for Appellees Crozer Chester Medical Center, Catalyst Outdoor Advertising, LLC, Crozer-Keystone Community Foundation.
Peter Kristopher Janczyk, Esq., Edelstein Martin & Nelson, LLP, for Appellee Gessler Family, Owner.
Louis M. Kodumal, Esq., Mancini & Kodumal PLLC, for Appellee Annas Family LP.
Charles Graham Miller, Esq., Petrikin, Wellman, Damico, Brown & Petrosa, P.C., for Appellee CCMC.
Robert Emmett O'Connor, Esq., Delaware County Controller's Office, for Appellee Upland Borough Solicitor.
Michael Patrick Pierce, Esq., Pierce & Hughes, P.C., for Appellees Upper Chichester Township, Upper Chichester Twp. Solicitor.
Stephen J. Polaha, Esq., Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander PC, for Appellee Upper Chichester S.D.,
Wana Saadzoi, Esq., County of Delaware, for Appellees County of Delaware, Delaware County Assistant Solicitor.
Kenneth R. Schuster, Esq., Kenneth R. Schuster & Associates, P.C., for Appellee Chester City Solicitor.
Kelly Susan Sullivan, Esq., McNichol, Byrne & Matlawski, P.C., for Appellees Delco Board of Assessment Appeals Solicitors, Board of Assessment Appeals of Delaware County.
Pamela A. Van Blunk, Esq., DiOrio & Sereni, L.L.P., for Appellee Chester Upland School District.
Donald John Weiss, Esq., for Appellees Chichester School District, CSX Corporation, Chester Upland School District.
Marc Alan Zaid, Esq., Zaid Law Office, P.C., for Appellee Chichester School District.
OPINION
These consolidated appeals by allowance arise in a tax assessment context in relation to real property containing billboards. The General Assembly has directed that billboards and their supporting structures are not real estate for tax assessment purposes. The question before this Court is whether the presence of a billboard on a property may affect the valuation of that property, such as where the landowner is entitled to ongoing payments pursuant to a lease with the billboard company.
The appellant property owners ("Taxpayers") allowed the placement on their land of outdoor advertising signs and the signs’ supporting structures (the "billboards"). The appellee local taxing authorities, Chester-Upland School District and Chichester School District (the "School Districts"), filed 22 assessment appeals relating to the subject properties for tax years 2014 and forward. In their appeals, the School Districts sought to increase the assessed value based on the presence of the billboards. After relief was denied by the county assessment board, the School Districts appealed to the Delaware County Court of Common Pleas. Separately, four property owners also appealed to that court after their properties were reassessed due to the presence of billboards.
The county court – which hears assessment appeals de novo , see, e.g. , Green v. Schuylkill Cty. Bd. of Assessment Appeals , 565 Pa. 185, 195, 772 A.2d 419, 425 (2001) – determined that, before fact-finding could take place as to the value of any of the 26 subject properties, a threshold legal issue would have to be resolved in relation to each: whether any assessment of a given property may take into account billboard-related income received by the property owner, for example, through an easement agreement or a lease entered into with the billboard company.1
This issue arose due to a feature of the Consolidated County Assessment Law.2 That enactment makes real estate, including houses, land, and buildings, subject to taxation, see 53 Pa.C.S. § 8811(a), but it excludes signs and sign structures:
(4) No sign or sign structure primarily used to support or display a sign shall be assessed as real property by a county for purposes of the taxation of real property by the county or a political subdivision located within the county or by a municipality located within the county authorized to assess real property for purposes of taxation, regardless of whether the sign or sign structure has become affixed to the real estate.
Id . § 8811(b)(4) (the "billboard exclusion").
In re Appeal of Chichester Sch. Dist. , Nos. 2015-010766 et al. , slip op . at 16 (C.P. Del. July 18, 2017) .3 Accordingly, the common pleas court denied relief to the School Districts in their 22 appeals, and reversed the reassessments in the four taxpayer appeals. See id . at 1-5. Upon motion, the court certified its order for interlocutory appeal as involving a controlling question of law as to which there is a substantial ground for difference of opinion. See Order dated May 10, 2017, in In re Appeal of Chichester Sch. Dist. , Nos. 2015-010766 et al . (C.P. Del.), at 1 ().
A unanimous three-judge panel of the Commonwealth Court reversed in a published decision. See In re Consol. Appeals of Chester-Upland Sch. Dist. , 200 A.3d 1052 (Pa. Cmwlth. 2018). The intermediate court read the billboard exclusion less expansively than the trial court. It concluded that, while a billboard's value may itself be excluded from taxation, any increase in the underlying real property's value due to the presence of the billboard – as calculated using the traditional approaches listed in the Assessment Law (including the income approach), see supra note 3 – could be taken into account during assessment. See Chester-Upland , 200 A.3d at 1059-60.
The court acknowledged Taxpayers’ assertion that such an interpretation would permit taxing authorities to tax billboards indirectly where they may not do so directly. Still, the court drew a distinction between indirectly taxing billboards, and taxing an increase in the value of the land stemming from the property owner's ability to receive compensation, such as rental income, for allowing a billboard to exist on the property. The court held that Section 8811 does not exclude from assessment the land's increased value resulting from the latter circumstance. See id . at 1061.
Finally, the Commonwealth Court determined there was insufficient doubt as to the meaning of the statute to invoke the rule that, where tax exclusions (as opposed to tax exemptions) are concerned, doubts are to be resolved in favor of the taxpayer. See id . See generally Lehigh-Northampton Airport Auth. v. Lehigh Cty. Bd. of Assessment Appeals , 585 Pa. 657, 669-70, 889 A.2d 1168, 1175-76 (2005) (). The court agreed that Section 8811(b)(4) reflects an exclusion and not an exemption; but, as noted, it did not view...
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