The City of Philadelphia has reduced the tax rate for the net income portion of its Business Income and Receipts Tax (BIRT) from 6.20% to 5.99%. The BIRT applies to gross receipts and taxable net income for business activities conducted in Philadelphia. The new rate is effective for tax year 2022.
There has been a gradual reduction in the City’s BIRT income tax rate over the past ten years, from 6.45% in 2013 to 6.20% in 2021.
The City has also increased its interest rate charged on unpaid taxes from 5% to 9% per year. The new interest rate is effective for calendar year 2023 and applies to all City taxes except Real Estate and Liquor taxes. Visit our Interest, penalties, and fees webpage to learn more about the new rate.
Philly’s BIRT in brief
If you conduct business in Philadelphia, you are responsible for filing and paying this tax. All types of for-profit businesses, including those engaged in commercial or residential real estate rental activity, estates and trusts, must file the City’s BIRT return. You must still file and pay the BIRT whether you made a profit or not.
However, businesses with $100,000 in Philadelphia taxable gross receipts or less are not required to file the BIRT return. Instead, we recommend that you file the one-page No Tax Liability (NTL) form online through the Philadelphia Tax Center. You should file the NTL for each year that your business has no BIRT liability. Review our Business Income and Receipts Tax webpage to learn more about how to file a No Tax Liability on the Philadelphia Tax Center or where to send a paper return.
Individuals or businesses with an active Commercial Activity License but not actively conducting business must still file the BIRT and let the City know that no business occurred. This is the only way to avoid receiving a non-filer notice.
Filing and paying BIRT made easy
The City has made filing and paying the BIRT easier than ever. You can file BIRT returns and make payments online through the Philadelphia Tax Center. A username and password aren’t required to pay taxes on this website. Nevertheless, you must be logged in to file taxes:
- Log into your Philadelphia Tax Center profile at tax-services.phila.gov.
- Find your BIRT account, and select “File, view, or amend returns.”
- Pick “File now” on the “Returns” screen.
- Carefully review your tax information and hit “Next.”
- On the “Tax liability” screen, enter your liability amount and hit “Next.” Follow the on-screen directions to complete the process.
If you would rather file a BIRT return by mail, please send your return to:
Philadelphia Dept. of Revenue
P.O. Box 1660
Philadelphia, PA 19105-1660
Please note: If you plan to carry forward net operating losses, we recommend filing a complete BIRT return to help you keep track of your net operating loss carryforwards. Net operating losses incurred in tax years 2022 and thereafter may be carried forward 20 years. Net operating losses incurred in tax years prior to 2022 may only be carried forward three years.
If you have questions or need more information, call (215) 686-6600.
