Before you apply for a tax account number you must first make a decision about your business structure. Please refer to the city's Business Services Center
for an introduction to these business structures and click on decide ownership structure. The IRS' website
also has a wealth of information about starting a new business. If you are unsure about what to do, we recommend consulting a professional accountant or attorney when determining your business structure.
Once your business structure is established you will continue by using a Federal Employer Identification Number (EIN), or Social Security number. It is appropriate to use a social security number if your business is being registered as an individual, limited liability individual, or estate. If your business is a corporation, partnership, limited liability corporation, or limited liability partnership it is necessary to obtain a employer identification number. Visit the IRS' website to register for and obtain your EIN.
Before registering for your tax account number you should also determine what taxes your business will be liable for. The most common business taxes in Philadelphia are:
- The Business Income and Receipt Tax – Formerly the Business Privilege Tax, BIRT applies to every entity doing business in the City of Philadelphia, whether or not they earned a profit during the preceding year. The BIRT is a two part tax on gross receipts and net income and both parts must be filed.
- The Wage Tax - Is withheld form the salaries, wages, commissions, and other compensations paid to persons who either live or work in Philadelphia. In Pennsylvania, all employers are required by law to withhold and remit the wage tax from their employees. If it is not deducted by the employer, as is common for Philadelphia residents who work in other states, is it responsibility of the employee to register for an Earnings Tax Account.
- The Net Profits Tax - Is levied on the Net Profits from the operation of any partnership , limitied liability partnership, or sole proprietorship doing business in Philadelphia or having partners or owners living in Philadelophia. The Net Profits Tax is remitted in addition to the Business Income and Receipts Tax. Incorporated businesses are not responsible for the Net Profits Tax.
- The Business Use and Occupancy Tax - 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; or tenants, sub-tenants or owners use the Philadelphia property for business purposes.
Please remember that these are only a few of the business taxes for which your business may be liable. You can register for your city tax account number and applicable taxes:
Closing or Changes to Your Business
After your business is registered with the City it is your responsibility to notify Revenue of any changes including but not limited to: partners, phone number, mailing address, location, trade name, and entity structure. Also, if you cease operations you must let Revenue know or you may be charged penalties for not filing tax returns. Complete this change form and send it in to inform Revenue of any business changes.