Philadelphia’s double tax system on businesses could be phased out if Mayor Cherelle Parker’s budget proposal and subsequent legislation to codify the tax cuts are successful. The budget proposal is similar to recommendations by the Philadelphia Tax Reform Commission, which recently released its report. Through the Business Income and Receipts Tax (BIRT), the city collects 1.415 mills on every $1,000 of gross receipts. Under the proposal, BIRT would drop to 1.41 mills during fiscal year 2026, then to 1.38 by 2030. By 2039, after the city’s $1 billion pension debt has been repaid, the gross receipts tax would be eliminated. Likewise, the city collects 5.81% on taxable net income. That tax would decline to 5.5% by 2030, and to 2.8% by 2039. Businesses with $100,000 or less in taxable gross receipts are not required to file a BIRT return — but under Parker’s budget proposal that exclusion will be eliminated. Parker’s budget would increase the real estate transfer tax from 3.278% to 3.578% in fiscal year 2026. City wage tax for Philadelphia residents is 3.75%, which would drop to 3.7% in fiscal year 2025. By 2030, it would fall to 3.39%. Read more at PlanPhilly.
Source: PlanPhilly; 3/14/2025