## Facts

- Pittsburgh enacted Ordinance No. 704 (1969), imposing a 20% tax on gross receipts from nonresidential off-street parking transactions.
- The ordinance replaced earlier parking-tax ordinances that had imposed lower rates (10% in 1962 and 15% in 1968) on the same activity.
- Private operators of off-street, nonresidential parking facilities challenged the tax.
- The operators asserted the tax, combined with competition from parking facilities operated by a public parking authority with tax exemptions and other advantages, would effectively destroy their businesses.
- The operators sought to enjoin enforcement, arguing the tax’s practical effect was an uncompensated taking of property in violation of the Fourteenth Amendment’s Due Process Clause.

## Issues

1. Whether a municipal tax violates the Fourteenth Amendment’s Due Process Clause because it is allegedly so burdensome that it renders a private business unprofitable or threatens its existence.
2. Whether a tax becomes unconstitutional under due process because the taxing government (or a tax-exempt public instrumentality) competes with taxed private businesses under allegedly unequal conditions.

## Decision

- The Supreme Court reversed the judgment of the Pennsylvania Supreme Court and upheld the ordinance.
- The Court held the parking tax did not violate the Due Process Clause even if it made private parking less profitable or uneconomic.
- The Court concluded Pittsburgh could constitutionally impose the tax even though it might cause consumers to park elsewhere or use other transportation.
- Justice Powell concurred, agreeing that the record did not justify treating the revenue measure as a constitutional taking or due process violation.

## Legal Principles

- A tax is not unconstitutional under the Due Process Clause merely because it is “excessive” in the sense that it renders a business unprofitable or threatens its continued operation.
- Courts should not infer a forbidden governmental purpose from adverse economic impact alone when the measure is facially a revenue-raising tax.
- A tax does not lose its character as a revenue measure, and is not invalid under due process, simply because the taxing government or its tax-exempt instrumentalities compete with the taxpayer in ways a court might view as unfair.
- The Due Process Clause does not authorize courts to police the fairness of tax burdens or to supervise competitive conditions created by government participation in a market.

## Conclusion

The Court sustained Pittsburgh’s 20% gross-receipts tax on nonresidential parking, holding that due process does not bar taxes that are heavy enough to harm or even endanger a business, nor does it bar such taxes because the government competes through tax-favored public entities.


City of Pittsburgh v. Alco Parking Corp., 417 U.S. 369 (1974)