Philadelphia’s Business Income and Receipts Tax (BIRT) — $1.41 per $1,000 of sales and $57.10 per $1,000 of profits — now applies even when sales are under $100,000. That income used to be tax-exempt. The city estimates 75,000 small-business owners may owe the tax for the first time. But the realization that payment of this portion of the BIRT— plus next year’s tax, which businesses are required to pay in advance in quarterly installments — is due on top of other city, state and local taxes, has left busy sole proprietors and other small-business owners feeling unprepared, even resentful. The prospect of paying thousands they hadn’t expected has driven vendors, drivers, self-employed healthcare professionals and others to lobby for a bill drafted last year by Councilmember Mike Driscoll that could exempt sole proprietorships from the tax. City officials have said the sub-$100,000 businesses pay less than 5% of the $700 million collected by BIRT from all businesses.
Source: Philadelphia Inquirer; 4/15/2026