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:
- 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.
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.