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Effective May 1, 2012, Council Bill 110758 renames the Business Privilege Tax the "Business Income and Receipts Tax" and the Business Privilege License the "Commercial Activity License". This change will not be reflected on the actual Business Income and Receipts Tax forms until next tax season.
Philadelphia Business Taxes
This tax is imposed on the admission fee charged for attending any amusement in Philadelphia. Included are concerts, movies, athletic contests, night clubs and convention shows for which admission is charged. The current tax rate is 5% of the admission charge.
Business Income and Receipts Tax
Every individual, partnership, association and corporation engaged in a business, profession or other activity for profit within the City of Philadelphia must file a Business Income and Receipts Tax Return, whether or not they earned a profit during the preceding year. Rental activities are usually considered to be business activities.
Every estate or trust, (whether the fiduciary is an individual or a corporation) must file a Business Income and Receipts Tax Return if the estate or trust is engaged in any business or activity for profit within the City of Philadelphia. The Business Income and Receipts Tax is based on both gross receipts and net income. Both parts must be filed.
This tax is imposed on the rental of a hotel room to accommodate paying guests. The term "hotel" includes an apartment, hotel, motel, inn, guesthouse, bed and breakfast or other building located within the City, which is available to rent for overnight lodging or use of facility space to persons seeking temporary accommodations.
The tax is imposed at the rate of 8.2% of the amount paid by each patron for the occupancy of a room with sleeping accommodations in a hotel, motel, inn, guesthouse or bed and breakfast.
Every sale at retail of wine, liquor or malt and brewed beverages by any hotel, restaurant, club or other person holding a license or permit issued by the Commonwealth of Pennsylvania to sell or dispense liquor, wine or malt and brewed beverages is subject to this tax. Catering that includes the sale of such beverages is also taxable, as is a portion of a cover charge that includes beverages.
Mechanical Amusement Device Tax
Every person who uses or permits the use for profit of any mechanical amusement device shall pay an annual tax in the amount of one hundred dollars for each mechanical amusement device, on or before the first day of January of each year.
The Net Profits Tax is levied on the net profits from the operation of a trade, business, profession, enterprise or other activity conducted by individuals, partnerships, associations or estates and trusts. (The rental of property, in most cases, is considered the operation of a business).
The tax is imposed on the entire net profit of any self-employed person who is a resident of Philadelphia regardless of the location of the business. It is also imposed on businesses conducted in Philadelphia by non-residents. Corporations are exempt from this tax.
The Council of the City of Philadelphia passed Bill No. 050451 authorizing the City of Philadelphia to impose a new excise tax on the purchase, rental or licensing of space on any building, parcel and Sign Support Structure located within the City of Philadelphia for the purpose of installing, placing or maintaining an Outdoor Advertising Sign.
The Parking Tax is levied on the gross receipts from all financial transactions involving the parking or storing of automobiles or other motor vehicles in outdoor or indoor parking lots and garages situated in the City of Philadelphia. The Parking Tax is imposed on every person parking or storing a motor vehicle in or on a parking facility in Philadelphia.
The City and the School District of Philadelphia impose a tax on all real estate in the City. The Board of Revision of Taxes determines the value of the property on which the taxes must be paid.
If you have a mortgage, your tax bill may be sent directly to your mortgage company for payment from your escrow fund.
The Realty Transfer Tax is levied on the sale or transfer of Real Estate located in Philadelphia. The tax also applies to the sale or transfer of an interest in a corporation or partnership that owns real estate. Certain long term leases are also subject to this tax.
The City tax rate is three percent (3%) of the sale price or the fair market value, if no sales price exists. However, in addition to the City tax, the Commonwealth of Pennsylvania charges 1%, making a combined rate of 4%.
Generally the transfer of real estate between family members is exempt. Examples are a transfer between husband and wife, children of the same parent, and lineal ascendants / descendants. Property that is received under a will is also exempt.
Tobacco and Tobacco-related Products Tax
The Tobacco and Tobacco-related Products Tax will be paid on items sold by retailers and by vending machines. Products subject to this tax are ones that contain tobacco for smoking or other consumption and tobacco related products, including rolling papers, cigars, smokeless tobacco, pipe tobacco or other loose tobacco.
The Business Use and Occupancy Tax is a tax on the business, trade or other commercial use and occupancy of real estate located in Philadelphia.
The tax is due if your business is physically located in Philadelphia, you operate your business from your Philadelphia residence, tenants, sub-tenants or owners use the Philadelphia property for business purposes.
Valet Parking
Imposed on transactions involving the use of parking valets operators. A valet parking operator shall be entitled to a credit against amounts remitted to the Department for his/her Parking Tax in an amount equal to any parking tax paid by the valet parking operator to the operator of a parking facility that the valet service is using to park/store the patron's car.
Taxable transactions are rentals for a period of 29 or fewer consecutive days of a private passenger motor vehicle designed to transport 15 or fewer passengers or a truck, trailer or semi-trailer used in the transportation of property other than commercial freight where custody or possession is taken in Philadelphia. The tax is paid by the person and collected by the entity renting the vehicle acting as an agent for the City of Philadelphia.
The City Wage Tax, also called the Earnings Tax, is a tax on salaries, wages, commissions and other compensation paid to an employee who is employed by or renders services to an employer. Generally, individuals who work for a company in Pennsylvania will find that the company deducts the Wage Tax from their pay since this is required by law.
All Philadelphia residents owe the City Wage Tax regardless of where they perform services. Non-residents who perform services in Philadelphia must also pay the Wage Tax.
All questions or comments concerning these taxes should be directed to the
Department of Revenue at (215) 686-6600 or revenue@phila.gov
All questions or comments concerning this website should be directed to
Mrs. Toni Curtis-Ford at (215) 686-6628 or toni.curtis-ford@phila.gov
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