Pittsburgh City Council bill would increase taxes on billboards

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In search of new revenue, Pittsburgh City Council returned Tuesday to an old idea -- taxing billboards.

Council President Darlene Harris and Councilwoman Natalia Rudiak introduced a bill that would impose a 10 percent tax on billboard proceeds, arguing that billboard companies don't pay their fair share of taxes at a time when the city is struggling to keep enough police cars on the street.

Mrs. Harris estimated that the tax could generate $2 million to $4 million a year and proposed using at least some of the revenue as a permanent funding source for the police bureau's capital needs.

Jonathan Kamin, an attorney for Lamar Advertising, the region's most prominent billboard company, questioned the city's authority to enact the tax and said council is engendering an anti-business climate.

"We find it disappointing that the city is looking to raise taxes on businesses in the city," Mr. Kamin said.

The state Supreme Court has ruled that billboards are personal property, not real estate, so council's proposed tax on billboards would be like a tax on blenders or jewelry, he said.

Mike Dawida, executive director of Scenic Pittsburgh, an organization that has clashed with the billboard industry over aesthetic issues, praised the legislation.

"It's the right thing to do. It's fair. It's not going to hurt this industry in any way," he said.

This is the second time in nine months that council has toyed with the idea of a billboard tax.

Then-Councilman Doug Shields introduced legislation for a billboard tax in December, but he and colleagues killed the bill after failing to adequately advertise it. Unable to reintroduce the bill last year because the legislative term was coming to an end, Mr. Shields called on his colleagues to revisit the issue this year.

Mrs. Harris said billboard companies don't pay property taxes on lucrative billboards themselves. She said they only pay taxes -- often minimal amounts, such as a couple of dollars -- on the small parcels that hold the signs.

She and Ms. Rudiak said that's absurd given the city's chronic financial problems. Ms. Rudiak said the city's expenses included periodic flood cleanups at Routes 88 and 51 in Overbrook -- an area with many billboards that contribute little to the public treasury.

Mr. Kamin said Lamar annually pays more than $100,000 in property taxes for the parcels its owns, plus a $52 permit fee on each billboard it owns in the city.

Mr. Kamin said billboard companies don't pay property taxes on signs because of the Supreme Court ruling. At one point, he said, the industry itself urged the court to designate them real estate instead of personal property.

Under the legislation introduced Tuesday, the city would impose a tax of 10 percent on the purchase or rental of billboard space on any building or plot of land. The tax would be collected by the billboard company at the time the advertiser pays for the space.

"This is only the beginning of looking for areas where people don't pay their fair share," said Mrs. Harris, who also has formed a task force to determine whether nonprofits could be forced to pay real estate taxes or to make payments in lieu of taxes.

Scenic Pittsburgh has complained that Lamar pays less than $10 in real estate taxes on one of the region's most visible billboards -- the one bearing Bayer Corp's name on the side of Mount Washington.

Mr. Kamin said property valuations are based on the parcel's characteristics. If not for the Bayer billboard, he said, the city would generate no tax income at all from land on the side of a mountain.

neigh_city - businessnews

Joe Smydo: jsmydo@post-gazette.com or 412-263-1548.


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