on gross receipts, and 6.35% on taxable net income
Who pays the tax
Every individual, partnership, association, limited liability company (LLC), and corporation engaged in a business, profession, or other activity for profit within the City of Philadelphia must ﬁle a Business Income & Receipts Tax (BIRT) return. This includes:
- Those engaged in commercial or residential real estate rental activity.
- Estates, trusts, or non-profits engaged in any for-profit business or activity within Philadelphia.
- Those who maintain a Commercial Activity License (CAL) but do not actively engage in business.
In all of the situations described above, you must file a BIRT return whether or not you made a profit.
If you have a CAL but do not actively engage in business, you must ﬁle the BIRT return and tell the City that no business occurred. If you don’t ﬁle a return, you will receive a non-ﬁler notice and court costs could be imposed.
The BIRT can be filed and paid online. Starting with payments due in April 2018 for Tax Year 2017, taxpayers who owe $5,000 or more for the BIRT are required to pay those taxes electronically.
If you must amend a BIRT return, complete a new tax return with the updated amount(s). Place an “X” in the box that indicates the form is an amended return.
The BIRT must be filed and paid by April 15 of each year, for business activity from the prior year. With each filing, an estimate for the following year’s BIRT must be paid in full.
Taxpayers can apply for an extension of time to file BIRT returns. The Department of Revenue may give you an extension of up to 60 days from the original due date. Where the Internal Revenue Service (IRS) grants additional time for filing the Federal return that coincides with the BIRT return, you have an extension up to the due date of the Federal Tax return.
The Federal extension allows you up to six months from the original due date to file your tax returns. You can file your returns at any time during the six-month extension.
Please be aware that there are no extensions for the payment of taxes. Payments made after the original due date are subject to interest and penalty charges.
Tax rates, penalties, & fees
How much is it?
The current rates for the Business Income & Receipts Tax (BIRT) are 1.415 mills (1.415% per $1,000) on gross receipts, and 6.35% on taxable net income. In 2016 the rate was 6.39% on taxable net income.
The BIRT is based on both gross receipts and net income. Both parts must be ﬁled.
This is a completely separate tax from the Net Profits Tax (NPT), so it’s possible to have to pay both the BIRT and the NPT.
What happens if you don't pay on time?
Payments made after the original tax due date are subject to interest and penalty charges. There are no extensions for tax payments, but you can apply for an extension if you need more time to file your return.
Your Commercial Activity License can be suspended or revoked if you haven’t paid your taxes. For-profit businesses are not allowed to operate in Philadelphia if they don’t have an active Commercial Activity License. This means that if you fall behind with your tax payments, you may have to suspend your business operations until you pay the taxes you owe.
For more information about interest and penalty rates, visit the interest, penalties, and fees page.
Discounts & exemptions
Are you eligible for a discount?
Beginning in tax year 2016, there is an exemption of the first $100,000 in gross receipts and a proportionate share of net income from the Business Income and Receipts Tax.
Some tax credits reduce the amount of BIRT owed to the City. Regardless of whether your business qualifies for reductions or exemptions, you’re still required to file a BIRT return.
Tax credits that can be applied against the BIRT include:
- Sustainable Jump Start
- Community Development Credit
- Distressed Business Tax Credit
- Green Roof Tax Credit
- Jobs Creation Tax Credit
- Keystone Opportunity Zone (KOZ)
- Life Partner and Transgender Care Health Benefits Tax Credits
- Philadelphia Re-Entry Employment Program (PREP)
- Sustainable Business Tax Credit
- Veterans’ Employment Tax Credit
Visit the Tax Credits section of this site to find specific eligibility and filing requirements. For a complete listing of all credit programs, you can also visit the City’s online Business Services Center.
Section 103 of the BIRT regulations includes a definition of “doing business” in Philadelphia. If your business meets certain regulatory criteria, it may qualify for “active presence” treatment. This would be subject to the tax on gross receipts only.
Can you be excused from paying the tax?
Full exemptions are only available to certain organizations. In general, organizations that are exempt from filing and paying the BIRT are:
- Nonprofits and religious organizations.
- Individuals engaged in a hobby or other not-for profit activity.
- Port related activity.
- Public utilities.
The list above is not exhaustive, and exclusions are based on the facts and circumstances of each business. Review the City’s Code and Revenue’s BIRT regulations to make sure you are eligible for an exemption.
Businesses in the first two years of operations may be exempt from paying BIRT through the Jump Start Philly program. Businesses in the first three years of operations may be exempt from paying BIRT through the Sustainable Jump Start program.
How to pay
File and pay online
You can file BIRT returns and make payments through the City’s eFile/ePay site. Starting with payments due in April 2018 for Tax Year 2017, taxpayers who owe $5,000 or more for the Business Income and Receipts Tax are required to pay those taxes electronically.
File a return by mail
Mail your return to:
P.O. Box 1660
Philadelphia, PA 19105-1660
Pay by mail
Mail all payments with a payment coupon to:
P.O. Box 1393
Philadelphia, PA 19105-1393
Request a refund by mail
Mail your return and refund request to:
P.O. Box 1137
Philadelphia, PA 19105-1137