If you operate a business in Philadelphia, you are responsible for filing City taxes, regardless of profit or loss. This will fulfill your business tax filing obligation and keep you in compliance.
All businesses operating in Philly are required to file the City’s Business Income & Receipts Tax (BIRT) and, if you are not incorporated, the Net Profits Tax (NPT) returns. Incorporated businesses don’t have to file the NPT.
The BIRT and NPT are two separate taxes and are filed yearly:
- The BIRT is based on your gross receipts and net income from business activity within Philadelphia.
- The NPT is based on the net profits that you earn from your business. Philadelphia residents are liable for NPT on all income earned regardless of where the income is earned. Philadelphia non-residents are liable for NPT on all income earned within Philadelphia.
If no business activity occurred during the last tax year and you have an active Philadelphia tax account, you must file a zero business tax return to avoid a non-filer notice.
The good news is that you may not have to file a BIRT return if you have less than $100,000 in gross receipts for the tax year. But you must still report your activity to the City. You can do this by filing a No Tax Liability to let the City know you owe no BIRT tax.
If you don’t file the BIRT and NPT returns:
- Your business may receive non-filer notices, incur fines, and more.
- The City may not issue tax clearance if you need to renew or get new licenses or permits.
If you closed your business last year, you still need to file your business tax returns for that final tax year. You no longer have to file taxes if you complete a Change Form to close your business entity’s Philadelphia tax account.
You can get an extension if you need more time to file your business returns. But there is no extension for paying the BIRT and NPT. Both taxes are due April 15th each year. Read this blog on how to get filing extensions.
File and pay online
The fastest, easiest, and most secure way to file and pay the BIRT and NPT is online at www.phila.gov/pay. Paying with eCheck is FREE.
Do you have questions about which Philadelphia tax return to file, or how to complete one? Please contact our Revenue Audit Division by emailing firstname.lastname@example.org or calling (215) 686-6500. This Unit operates Monday – Friday from 8:30am-5pm.
Fulfilling your business tax-filing requirements, even when you have no activity, means you remain in good standing with the City.