City Council Considers Special Billboard Tax

Sep 11, 2012

A ten percent tax on billboard advertising in Pittsburgh could raise up to $4 million for the city, if Pittsburgh City Council passes a new bill introduced on Tuesday.

Sponsoring Councilwomen Darlene Harris and Natalia Rudiak said the tax revenue would be put toward the purchase of police cars, which they said must be replaced every two or three years. However, Rudiak said she could not recall if the legislation included language to codify that usage, and the text of the bill was not available on Council's website at the time of this article's publication.

Rudiak said most advertising companies pay less than $50 in property taxes per billboard each year. For example, she pointed out a large billboard in her district that yields $41.18 in city and school district taxes each year because it's built on a hillside.

"So, if you actually look at the value of that specific parcel, I mean the fact that it's on a hillside, it's perhaps not necessarily that valuable, but the company is making hundreds of thousands of dollars on that parcel, I'm sure," said Rudiak.

According to the Pennsylvania Resources Council, billboard owners do not pay real estate taxes on the structures themselves because they are considered personal property, rather than real property.

Rudiak and Harris argued that advertising companies could not make money off of billboards without the city's services.

"Billboards can only be profitable because they're on roads that people use, and they're roads that the city paves and maintains and sweeps. They're roads that our police and our EMS and fire [companies] provide service to," said Rudiak.

The legislation before Council would assess a ten percent tax on the cost of advertising on a billboard. Rudiak said the billboard owner would be responsible for collecting the tax from the advertiser and conveying it to the city.

Rudiak said the bill is based on similar legislation in Philadelphia that "passed court muster." However, she said she does expect a "significant blowback" on the bill from advertising companies.

State advertising law requires that Council open the bill for discussion in three public hearings, which Rudiak said would likely be scheduled in consecutive weeks this autumn.

The bill resembles legislation presented by former City Councilman Doug Shields in December 2011. Rudiak attributed the failure of that bill to a lack of time to hold public hearings before Council's legislative session expired at the start of 2012.