The City of Philadelphia uses various methods to collect unpaid taxes. For example, we may, revoke your commercial activity license for non-compliance with tax rules. This blog post explains how to prevent revocation and what to expect if it happens.
Revocation reasons
Anyone conducting business in Philadelphia is responsible for filing and paying the City’s Business Income and Receipts Tax (BIRT) and, if you are not incorporated, also the Net Profits Tax (NPT). These are two separate taxes. The BIRT is based on your gross receipts and net income from business activity in Philadelphia. The NPT is based on the net profit you earn from your business. Both taxes are due before or on April 15 for prior year business activities.
The City may revoke your license if you fail to comply with these filing and payment requirements.
Before revocation
We send you two warning notices; one is mailed to your address on file, and the other is hand-delivered. The first “Notice of Intent to Revoke License” provides details of your business entity’s unfiled and unpaid taxes.
This notice also gives you a 10-day period within which you must pay off your tax debts or enter into a payment agreement. It also provides the name and contact details of a case worker with whom you should work directly to resolve your tax debts. It also provides instructions on how to contest the revocation of your license.
If you do not respond within the 10-day period, we hand-deliver a second letter notifying you that your business license will be revoked in two days.
After revocation
A revoked license affects your ability to conduct business in Philadelphia and limits your access to some payment agreement options. For example, you will not be allowed to conduct business in the City two days after receiving the second Notice of Revocation. If you continue operating your business with a revoked license, the City may fine you $300 per day.
The City will also post a Cease Operations Order at your business location. This means your business cannot be open or serve customers. If necessary, the Philadelphia Police Department will help enforce the closure.
How to prevent revocation
The best way to maintain a good tax standing with the City is by paying all taxes as they become due. You can find all Philadelphia tax types, rates, and associated due dates or filing requirements on the Department of Revenue website.
You can pay all City taxes on the Philadelphia Tax Center without creating a username and password. Nevertheless, you must be logged in to file returns on this website.
Paying your debt in full is always best, but you can always contact us if you are experiencing difficulty resolving your tax debts. We have several payment agreement options with flexible terms to help you get back on track. If you have questions or need help, please call (215) 686-6705.
