A major change to Philadelphia’s tax code will soon impact thousands of small businesses, including many real estate professionals operating as LLCs or independent firms. The city has eliminated a longstanding tax break that excluded the first $100,000 in revenue from the Business Income and Receipts Tax (BIRT), making all firms — regardless of size — liable for the tax starting in 2026. Firms that previously earned under $100,000 annually and were exempt from the BIRT will now be treated as new filers. That means their first BIRT payment, due April 15, will only cover income from 2025. In 2027, they will owe taxes on 2026 income and an estimate for 2027. The BIRT includes a 0.141% tax on gross receipts and a 5.81% tax on net income, with gradual reductions planned through 2039. To ease the transition, the city is offering tax assistance through the Commerce Department and Revenue Department. Businesses can contact the Mayor’s Business Action Team at business@phila.gov or (215) 683-2100. Realtors and brokers earning under $250,000 may also qualify for free accounting services and small business grants of up to $50,000 through the city’s Small Business Catalyst Fund. Read more in the Inquirer (gift link).
Source: Philadelphia Inquirer; 8/5/2025