Judge upholds AASD’s business tax

Ruling preserves about $2 million in district revenue

HOLLIDAYSBURG — The Altoona Area School District’s business privilege tax will remain intact based on a recent ruling by a Huntingdon County judge.

In a decision addressing a legal challenge to the validity of the district’s business privilege tax, Senior Judge Stewart Kurtz found no problem with the school board’s actions in 1989 to reauthorize the tax, which has been imposed since 1980.

“The judge followed the law in finding that the district has the ability to continue levying the business privilege tax,” attorney Jennifer Dambeck said Friday on behalf of the district. “His ruling has brought an end and clarity to this dispute.”

It also preserves what is about $2 million annually in revenue for the school district, based on a 2-mill levy paid by businesses on gross receipts.

During a hearing in August, attorney Jackie Bernard, who was seated this month as a Blair County judge, argued against the validity of the district’s business privilege tax on behalf of Leonard S. Fiore and Fiore Brothers Inc.

Bernard contended that the school board lost its right to levy the tax when it voted on a 1989 tax resolution, which repealed its earlier resolution. The board’s actions occurred after the Local Tax Reform Act 1988 abolished the ability of local taxing bodies to levy business privileges except in locations where they had been levied based on existing ordinances or resolutions.

Bernard told Kurtz that the Altoona Area School Board lost its grandfather option, either intentionally or unintentionally, based on action taken.

Kurtz concluded otherwise after reviewing four school district tax resolutions and the school board procedures followed between 1980 to 1989 to authorize tax levies. None of its tax resolutions repealed earlier resolutions, the judge said, a conclusion indicating that the district’s grandfathering option was intact.

Kurtz said his decision also reflected a Commonwealth Court ruling in 2013 in favor of Whitehall Township, Lehigh County. In that case, the township enacted an ordinance on Dec. 12, 1988, which listed rental income as a gross receipt subject to the township’s business privilege tax, which had been in place since 1970.

Allentown Power Center, the owner of a commercial rental property, objected to the revision and tried to convince a county judge that it was illegal because of the Local Tax Reform Act of 1988. A trial judge, however, concluded that the township’s earlier ordinance was broad enough to include revenue from any for-profit activity, including rental income. On appeal, the Commonwealth Court agreed and the business was ordered to pay $31,469.

Kurtz pointed out that in that case, neither the trial judge nor the Commonwealth Court were troubled by Whitehall Township’s revised ordinance since it had an earlier ordinance in place.

Mirror Staff Writer Kay Stephens is at 946-7456.