9/14/11 - Reduce tax burdens on existing and new businesses
Steps in the right direction but hiring mandates for benefits may be too much
Date: 9/14/11
Bill No. 110548 seeks to reduce tax burdens on existing and new businesses as well as eliminate, waive, and reduce fees and permit charges. Overall goal of this bill is to promote growth of existing businesses, establishment of new businesses, and job creation.

Amendment would exclude the first $100,000 of receipts from taxation starting in tax year 2012 continuing each tax year after.

Amendment would eliminate the fee for the annual issuance of a business privilege license. Currently, all businesses that maintain a place of business in the city must pay for a business privilege license from the Department of License and Inspections.

New Business, which are defined as a business that was not subject to the business privilege tax (BPT) at any time during the fives years preceding Tax Year 2012, are eligible for a 0 percent Business Tax, 0 percent realty transfer tax, all fees charged by the city for licenses would be waived, and zoning fees would be waived. All before mentioned benefits for a New Business are available only when certain conditions are met.

Conditions include that a New Business must have at least 5 full time non family member employees who reside in Philadelphia by the 12 month anniversary of becoming subject to BPT through 18 months.

As of the 18th month anniversary of becoming subject to BPT through the 24th anniversary, the business must have at least 10 full-time non family employees who reside in Philadelphia.

If a taxpayer is found claiming New Business status and is not entitled to said status, the taxpayers will be liable for all unpaid taxes, fees, and charges that would have otherwise been due as well as fines and penalties. If a business closes in the two year period it will not be charged back fees. Once two years are up, the business ceases to be a New Business and is subject to BPT.

Waiving fees and tax exclusions are positive points, but the job creation aspect of this ordinance has too many strings that could potentially burry a firm in back fees and penalties if they cannot keep up with hiring standards required to be a New Business.

Aaron Colsher 215.948.9285 x105
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