Payments, assistance & taxes

Distressed Business Tax Credit

The City offers a Distressed Business Tax Credit to businesses in Philadelphia that lose 10% or more of their net income because a public works project is blocking entry to their business.

Eligibility

A business can apply this credit to its Business Income and Receipts Tax (BIRT) liability if:

  1. The business is within 100 feet of a public works project.
  2. Customer access to the business was substantially obstructed for at least 30 days to the extent that it wasn’t clear that the business was open to someone walking by.
  3. The business lost at least 10% of the business’s total net income, and 10% of the business’s total sales/receipts in the tax year in which the business obstruction occurred.

Credit amounts

Starting in Tax Year 2015, businesses that are approved for the Distressed Business Tax Credit are eligible for a credit of 20% of the business’s lost sales/receipt amount, up to $20,000, but no more than the after-tax loss in net income.

Unused Distressed Business Tax Credits may not be carried forward, and the credit is non-refundable.

Applying for the credit

Interested businesses must submit an application to the Department of Revenue and provide documentation proving eligibility.

Documentation should include:

  • Photographs of the business obstruction.
  • Evidence of the business’s proximity to the public works project.
  • Lost net income and sales receipts.
  • Duration of the business obstruction.

The application must be received on or before the due date of the Business Income and Receipts Tax (BIRT) return for the tax year in which the obstruction occurred.

Receiving the credit

The department will review your application and let you know if you have been approved.


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