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City of Philadelphia

Net Profits Tax

Overview

The Net Profits Tax (NPT) is levied on the net profits from the operation of a trade, business, profession, enterprise or other activity by:
  • residents, even if business is conducted outside of Philadelphia and
  • Non-residents who conduct business in Philadelphia. 

The Net Profits Tax is filed annually. The current year estimated Net Profits Tax is payable in two estimated payments. Each estimated payment must be equal to 25% of the Net Profits Tax computed from the prior taxable year. The 1st installment is due by April 15 and the 2nd installment is due by June 15.

Who Must File

Net Profits Tax is due by businesses organized as:

  • Individuals,
  • Partnerships,
  • Associations,
  • Estates and trusts.

The rental of property, in most cases, is considered the operation of a business.

A return must be filed even if a loss is incurred. If no return is filed, non-filer penalties are imposed.

The failure of any person to receive a tax package does not excuse them from the responsibility of filing a return and paying the tax due. The tax can be filed and paid on-line.

Filing Extension

Taxpayers can apply for an extension of time to file the Net Profits Tax return. There is an automatic 60 day extension (until June 15) that can be obtained by filing an extension payment coupon. Taxpayers must go to the E-file/E-pay section of our website at https://ework.phila.gov/revenue/ to print a customized extension payment coupon. Where the taxpayer has obtained a Federal extension (i.e. 6 months), the additional time to file the return will be granted. The extension period to file the return cannot exceed the end date of the Federal Extension period. Please note that the extension of time to file the return is not an extension of time to pay the tax. Payments made after the original due date are subject to interest and penalty charges.

Exclusions from Net Profits Tax

Corporations are exempt from the Net Profits Tax.

Overview

Tax Type Code
03

Effective July 1, 2015 for Tax Year 2015:
3.9102% (Resident)
3.4828% (Non-Resident)

Mail Returns Requesting a Refund to
Philadelphia Dept. of Revenue
P.O. Box 1137
Philadelphia, PA 19105-1137

Mail Returns Not Requesting a Refund to
Philadelphia Dept. of Revenue
P.O. Box 1660
Philadelphia, PA 19105-1660

Mail All Payments With a Payment Coupon to
Philadelphia Dept. of Revenue
PO Box 1393
Philadelphia, PA 19105-1393

NPT FAQs

  • If I have incurred an overall loss and no tax is due, must I file a Net Profits Tax return?
  • Does the Net Profits Tax take the place of the net income portion of the Business Income and Receipts tax?
  • Income Based Net Profits Tax