On Nov. 14, 2011, Mayor Michael Nutter signed legislation intended to provide relief to Philadelphia businesses subject to the city’s business privilege tax. In follow-up legislation, the name of the BPT was changed to business income and receipts tax. The BPT has long been viewed as an impediment to Philadelphia’s economic growth and sustainability since it often results in Philadelphia-based businesses paying a significantly higher amount of tax than similar businesses located outside of the city.
The BPT is imposed on any person who engages in a taxable activity in Philadelphia or attributable to Philadelphia, whether or not such person is a resident and whether or not such person has a permanent place of business in Philadelphia. For purposes of the BPT, a “person” is defined to include any individual, partnership, limited partnership, corporation, estate or trust. The presence of a taxable activity in the city for purposes of the BPT is essentially a factual determination made on a case-by-case basis. The city has been extremely aggressive in determining what constitutes the presence of a taxable activity in Philadelphia for purposes of imposing the BPT.
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