In the fall we wrote about a proposal in the General Assembly related to Philadelphia’s tax on earned income, wages, and net profits that falls on residents and non-residents working in the City borders. That proposal is still in legislative committee.
Shifting to the City level, a hearing on Philadelphia’s overall tax structure and how to make the City more friendly to business took place last week. Among the taxes cited by one presenter were the Use and Occupancy Tax and the Business Income Receipts Tax. The former is a percentage based tax tied to the assessed value of the property if it is located in the City of Philadelphia or home based businesses. The latter is somewhat similar to the payroll preparation tax levied in the City of Pittsburgh, however, in Philadelphia both gross receipts and taxable net income are taxed. There are discounts and exemptions related to both.
Beyond those two taxes and the aforementioned earned income tax, many of the other business-related taxes in Philadelphia will sound very familiar to residents of Pittsburgh and Allegheny County with levies on amusements, hotel stays, liquor, vehicle rentals, parking, and so on. And of course businesses are paying property taxes on the assessed value of property. The wage tax is expected to raise close to half of the City’s $3.2 billion estimated tax collection for its general fund in 2018.
