In a case where two Delaware County school districts tried to squeeze more tax revenues from more than 20 billboards along I-95 and Route 322, the Pennsylvania Supreme Court on Thursday upheld a 2018 lower-court decision that supported the districts and overturned a long-accepted property tax exemption for billboards.
The decisions upheld the tax exemption for billboards themselves and the structures that support them but said the assessed value of the land where the signs stand should take into account the rent paid to the property owner.
Donald J. Weiss, a Delaware County lawyer who represented the Chester Upland and Chichester School Districts on a contingency basis, said the decision means that the two school districts should collect a total of $200,000 a year from the parcels in question. The decision is retroactive for three years, which takes the total to $600,000, he said.
“Unanimous by Commonwealth Court, unanimous by Supreme Court. Not too shabby,” Weiss said. He said the money will help pay for teachers, at least until lobbyists get to the legislators again and change the law.
Weiss said in 2017 that he came up with the idea that the assessed value of a parcel of land with a billboard on it should reflect the income stream from the billboard while sitting by a pool reading the law in 2013. It was a move that even an opponent called creative.
Current law did not permit taxing billboards. The two districts were hoping to increase the assessment of the land the signs were on, figuring that the rent should raise the value of the parcel. The creative legal move was seen as a desperate attempt by school districts to increase revenue amid strained budgets.
The case also shed light on an obscure area of property tax law and has stirred concerns that other exemptions such as those for silos, amusement park rides, and wind turbines could come under threat, according to real estate lawyers not involved in the case.
A representative of the Outdoor Advertising Association of Pennsylvania could not immediately be reached for comment about the implications for the industry.
Weiss’ co-counsel were Pamela Van Blunk and Mark Zaid.