Philadelphia workers will see minuscule tax cuts and small-business owners will get a mixed bag of pain and relief from the $6.8 billion budget approved by Philadelphia City Council. After making minor amendments, the council largely approved Mayor Cherelle Parker’s taxing and spending proposal for the budget that takes effect July 1, as well as much of her Housing Opportunities Made Easy (H.O.M.E.) initiative. Here’s a rundown of the changes:

• Real estate transfer tax: The city’s real estate transfer tax, which is paid when a property is sold, will increase from 3.278% of the assessed or sales value of a property to 3.578%. (The total transfer tax in Philadelphia will be 4.578%, including the 1% for the state.) The Greater Philadelphia Association of Realtors actively opposed the transfer tax increase.
• Business income and receipts tax (BIRT): The BIRT consists of two taxes, and the Parker plan that council passed includes 13 years of scheduled reductions to both. The tax on net income, or profits, will go from 5.81% to 5.71% next year, before eventually falling to 2.8% in 2039. The tax on gross revenue, or companies’ total income from business in the city, will be cut from 0.1415% to 0.141% next year. Parker’s plan would then fully eliminate the gross receipts levy in 2039 after a series of annual cuts. The BIRT exemption that allowed businesses to exclude their first $100,000 in revenue from taxation under the BIRT is going away. That effectively allowed many of the city’s smallest businesses to forgo paying the complicated tax altogether. The city was sued for violating Pennsylvania’s uniformity clause. Business owners can get more information on the BIRT changes and sign up for updates on how to get relief from the Philadelphia Revenue Department.
• Property tax: Most Philadelphia homeowners will pay the same amount in property taxes next year. Parker and city council agreed to leave the real estate tax rate flat at 1.3998% of a property’s assessed value.
• Wage tax: The wage tax will be reduced on July 1 from 3.75% to 3.74% for Philadelphia residents and from 3.44% to 3.43% for people who commute into the city for work. The small annual cuts are part of a decades-long policy shared by successive mayors to reduce the city’s reliance on the wage tax.

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Source: Philadelphia Inquirer; 6/13/2025