Key Philadelphia tax policy changes you need to know now

Philadelphia will eliminate the $100,000 Business Income and Receipt Tax (BIRT) exemption in 2026, affecting numerous businesses that previously were not required to file. The annual Use and Occupancy (U&O) tax exemption will also end for businesses occupying city properties, with the first payment due on January 25, 2026. Tax Year 2024 marks the last opportunity for businesses to benefit from the BIRT exemption, as they must file and pay starting in 2026. Businesses can receive a credit against the Net Profits Tax (NPT) based on their BIRT payments, which may help offset increased tax liabilities. The city advises businesses to consult tax professionals to navigate these changes effectively.

Philadelphia is committed to supporting businesses through this transition and has scheduled information sessions on July 24, 29, and August 7. These events will cover upcoming tax changes, preparation strategies, and available financial support. Business owners are encouraged to register for these free sessions to gain crucial insights and assistance.