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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 Business Income & Receipts Tax and Net Profits Tax returns. The extension allows you up to 6 months from the original due date to file the tax returns. You can file your returns at any time during that 6 month extension. However, please be aware that there are no extensions for the payment of taxes. Payments that are made after the original due date are subject to interest and penalty charges. Extension worksheets and coupons are in the Business Income and Receipts and Net Profits Tax packages.  They cannot be obtained from our website.

Exclusions from Net Profits Tax

Corporations are exempt from the Net Profits Tax

Overview

Tax Type Code
03

Rate 
3.924% (Resident)
3.495% (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