Philadelphia’s Use and Occupancy Tax (U&O) is a tax on any real estate located in the city that is used to conduct business, trade, or other commercial activities. The tax is due if you, your tenants, or subtenants use your Philly property for business purposes. You are also required to file and pay this tax if you operate your business from your Philly home.
What’s the tax rate?
The tax rate is 1.21% of your property’s assessed value which is determined by the Office of Property Assessment (OPA). You must collect the tax from tenants and pay it to the City each month and file monthly returns. Most property owners include this tax in their leases.
All taxpayers receive an exemption of $2,000 a year. Because of this, some properties may not have a liability at all, but they should still file a return.
Online filing and payment requirements
As of October 2022, the Use and Occupancy Tax can only be filed and paid electronically. Checks and coupons are no longer accepted. You must use the Philadelphia Tax Center to file and pay this tax. You can pay with eCheck for FREE, but debit or credit card payments have a service fee.
You do not need to create a username and password to pay this tax online, but you need to create a username and password to file it. Paying the U&O tax online does not satisfy the electronic filing requirement. You will receive a non-filer notice if you pay online but do not file U&O returns electronically.
You can skip the monthly filings and payments
The U&O tax is due on the 25th of each month, but some taxpayers can avoid a repeat of this task 12 times a year by switching to annual filings. The annual program lets you file and pay for the entire year just once – saving you time, energy, and resources.
Annual filers can amend their returns and switch filing frequencies as needed. Also, skipping the monthly deadlines helps you avoid incurring interest and penalties for late or missed monthly filing and payment. The deadline to sign up for annual filings is January 25 each year. However, not all taxpayers are eligible to make this switch.
How to sign up?
It’s very easy, but first, you must:
- Have a Use & Occupancy account with us.
- Make sure all prior year returns were filed on time (December of the previous year through November of the current year).
- Have no posted returns or payments for the next tax year (January or later)
- Must not have reported any vacancy, delinquent tenants, or tax credits for the prior year (December – November timeframe).
If you meet these criteria, you’ll see a “Change filing frequency” link highlighted in blue under the “Action Center” tab in your U&O account on the Tax Center. The link appears automatically if you qualify. It will not appear if you do not meet the requirements listed above. If you think you qualify, but don’t see this option in January, reach out to us at revenue@phila.gov or call (215) 686-6600
Here’s how to switch:
- Log in to the Philadelphia Tax Center.
- Under the “Action Center” tab, find the U&O panel, and select “Change filing frequency.” Review and select “Submit.”
You can also access your U&O panel from the “Summary” tab on your dashboard. Select “Action Center Items” to see all action center items for Use and Occupancy only. Once you submit, your account will be set to annual filings. Make sure to file your returns between January 1 and January 26.
Annual program participants must renew their filing preference every year to remain active in the program.
