If your store sells healthy drinks, you may be eligible for a tax credit against your Business Income and Receipts Tax (BIRT).
Your store qualifies for the Healthy Beverage Tax Credit if it is located in Philadelphia and you use one of the following NAICS (North American Industry Classification System) codes to describe your business on Federal Tax Forms:
- Convenience Food Stores (NAICS 445120)
- Other Specialty Food Stores (NAICS 445299)
- Gasoline Stations with Convenience Food Stores (NAICS 447110)
- Limited-Service Restaurants (NAICS 722513)
The amount of the credit is based on the dollar amount you spent to purchase healthy beverages during the year, compared to the amount spent to purchase healthy beverages the previous year. The maximum credit is $2,000.
Healthy Beverages are beverages that are non-alcoholic and do not list any form of sugar-based sweetener (such as sucrose, glucose or high fructose corn syrup) or non-caloric sugar-substitute (such as stevia, aspartame, sucralose, neotame, acesulfame potassium or “Ace-K,” saccharin, and advantame) as an ingredient.
Merchant Cost is the amount paid by the retailer to purchase Healthy Beverages for sale in their store. Merchant Cost includes all purchases of the Healthy Beverages made in the Tax Year whether or not it was sold that year. It is not the Cost of Goods Sold.
A convenience store purchased $15,000 worth of bottled water to sell in their Philadelphia store in 2019. They purchased $14,000 worth of bottled water in 2018.
$15,000 – $14,000 = $1,000
The convenience store can apply for a $1,000 credit against their Business Income and Receipts Tax for Tax Year 2019.
Applying for the credit
To apply for the Healthy Beverages Tax Credit, you must submit an application to the Department of Revenue on or before February 15. Applications can be submitted through the Philadelphia Tax Center.