Girard Estate Is a State Agency Immune From Tax 

Tax Alert

November 8, 2013

The Pennsylvania Supreme Court reversed the Commonwealth Court and held that property owned by the Board of City Trusts acting as trustee under the will of Stephen H. Girard was immune from real estate taxation because the trust is a state agency. City of Philadelphia, Trustee v. Cumberland County Board of Assessment Appeals, No. 902 MAP 2011 (Pa. Oct. 30, 2013). The court was unanimous in the result; two justices filed a concurring opinion.

The Board of City Trusts owned property in Cumberland County that was leased to the Pennsylvania Office of Attorney General. The Commonwealth Court had held that the Board of City Trusts as trustee was a private trust and not entitled to immunity from taxation. The Supreme Court reviewed in a thorough and lengthy opinion the history of the Girard Estate and its devotion to support of the city of Philadelphia in a number of respects, particularly in education. The court reviewed the trust under Stephen Girard’s will and the resulting Girard College for Orphans, all of which was for the benefit of Philadelphia and its citizens, the acceptance by Philadelphia and the commonwealth of Girard’s public bequest and the conditions attached to it, the nature of Pennsylvania and Philadelphia legislation to implement the gift, and the long history of why it was appropriate for the municipality and government to administer such a trust. The court largely disregarded decisions in the mid-20th century to the effect that the trust was a private entity, because the decisions were motivated by an attempt to avoid the holding of the U.S. Supreme Court that the trust was a state agency and therefore subject to the 4th Amendment of the United States Constitution. E.g., In re Girard Trust College Trusteeship, 138 A.2d 844 (Pa. 1958). The court also disregarded decisions in the last 20 years discussing whether and under what circumstances property owned by a state agency was or was not entitled to exemption as opposed to immunity. E. g., Lehigh-Northampton Airport Authority v. Lehigh County Board of Assessment, 889 A.2d 1168 (Pa. 2005); Delaware County Solid Waste Authority v. Berks County Board of Assessment, 626 A.2d 528 (Pa 1993); Pennsylvania State University v. County of Center, 615 A.2d 303 (Pa 1992); Pennsylvania State University v. Derry Township School District; 731 A.2d 1272 (Pa. 1999); Southeastern Pennsylvania Transportation Authority v. Board of Revision of Taxes, 833 A.2d 710 (Pa 2003).

The court distinguished immunity, which meant that the entity could never be taxed locally, from exemption, which might depend on usage of the property. For example, in the 2003 SEPTA case, the court held that property leased commercially by a state agency was not entitled to exemption. Two justices concurred in the result, but did not join in the holding that all property of the Board of City Trusts as trustee was immune from taxation, leaving open the possibility that in some other case property that was not used for a public purpose could lose its exemption.


Joseph C. Bright


(215) 665-2053

Dan A. Schulder


(717) 703-5905

Cheryl A. Upham


(215) 665-4193

Related Practices

To discuss any questions you may have regarding the opinion discussed in this Alert, or how it may apply to your particular circumstances, please contact: Joseph C. Bright at or 215.665.205, Dan A. Schulder at or 717.703.5905 or Cheryl A. Upham at or 215.665.4193.