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Amending Title 19 of The Philadelphia Code, entitled “Finance, Taxes and Collections,” by adding a new Chapter 19-4800, entitled “Automated Services Displacement Tax,” to impose a tax upon certain services performed within the City of Philadelphia by automated devices in place of services formerly performed by human beings, including delivery services and transportation services; all under certain terms and conditions.
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THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1.
Title 19 of The Philadelphia Code is hereby amended by adding a new Chapter 19-4800, to read as follows:
TITLE 19. FINANCE, TAXES AND COLLECTIONS
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CHAPTER 19-4800. AUTOMATED SERVICES DISPLACEMENT TAX
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§ 19-4801. Legislative Findings and Purpose.
(1) Council finds that delivery, passenger transportation, and other services historically performed in the City by human workers are increasingly being performed by automated devices, including sidewalk delivery robots and highly automated motor vehicles operating without a human driver.
(2) Council finds that the displacement of human labor by automated devices reduces the City’s Wage Tax and Business Income Receipts Tax base, imposes transition costs upon displaced workers and their families, and places new demands upon City streets, sidewalks, curb space, and public safety resources, while the persons deploying such devices derive substantial economic benefit from operating within the City.
(3) The purpose of this Chapter is to impose a tax upon the privilege of performing certain services within the City by means of automated devices in place of human workers, and to generate revenue that Council intends to be used to mitigate the economic and public costs of such displacement.
§ 19-4802. Definitions.
In this Chapter, the following definitions apply:
(1) Automated Device. Any machine, robot, motor vehicle, aircraft, together with any software, artificial intelligence, machine-learning model, sensor array, or programmed instructions that direct it, that performs all or substantially all of the physical or operational tasks of a Covered Service without a Human Operator directly and continuously controlling the apparatus in real time. The term includes, without limitation:
(a) a Highly Automated Vehicle;
(b) a Personal Delivery Device;
(c) any apparatus that is monitored, supervised, or remotely assisted by a natural person who is responsible, at any given time, for more than one (1) such apparatus, or who does not directly and continuously control the apparatus’s movement or task performance.
The term does not include a tool, appliance, or vehicle that is directly and continuously operated by a natural person, or that merely assists a natural person who is personally performing the Covered Service (including, without limitation, driver-assistance features that require a human driver to remain engaged in the driving task).
(2) Consideration. Anything of value, whether money, credit, a subscription or membership fee allocable to the service, or otherwise, received or receivable by a Deploying Entity, directly or through an affiliate or platform, in exchange for a Covered Service.
(3) Covered Service. A Delivery Service or a Transportation Service performed within the City for Consideration by means of an Automated Device, being a service of a kind that, on or before the Base Date, was customarily performed in the City by natural persons.
(4) Delivery Service. The conveyance of food, beverages, groceries, retail merchandise, parcels, packages, prescriptions, documents, or other goods to a recipient, where either the point at which the goods are loaded onto the Automated Device or the point at which they are delivered is located within the City of Philadelphia. The term includes, without limitation, last-mile and sidewalk delivery by a Personal Delivery Device, delivery by a Highly Automated Vehicle, and includes a delivery in which an Automated Device performs any segment of the conveyance within the City.
(5) Deploying Entity. Any person who owns, leases, operates, controls, dispatches, or deploys an Automated Device to perform a Covered Service within the City, or who offers, sells, or arranges a Covered Service to the public or to any third party and receives Consideration for it, including any digital network, application, or platform through which a Covered Service is requested or paid for. Where more than one person meets this definition with respect to the same Covered Service, each is jointly and severally liable for the tax, but the tax shall be paid only once.
(6) Department. The Department of Revenue of the City.
(7) Gross Receipts. The total Consideration received or receivable for Covered Services, without deduction for the cost of goods delivered, labor, equipment, fuel, electricity, platform fees, or any other expense; provided that Gross Receipts shall not include (a) the price of goods delivered when separately stated to the customer, (b) gratuities paid in full to a natural person, or (c) any tax or assessment imposed by the Commonwealth or the City and separately stated.
(8) Highly Automated Vehicle. A motor vehicle equipped with an automated driving system capable of performing the entire dynamic driving task on a sustained basis without the intervention of a human driver, and any vehicle meeting the definition of “highly automated vehicle” under 75 Pa.C.S. § 8501, as amended.
(9) Human Operator. A natural person who directly and continuously controls the movement and task performance of a single Automated Device, whether physically present in or with the device or operating it remotely in real time.
(10) Personal Delivery Device. An electrically powered device intended to transport cargo primarily on sidewalks, crosswalks, or road shoulders, operated with or without active control or monitoring by a natural person, and any device meeting the definition of “personal delivery device” under 75 Pa.C.S. § 102, as amended.
(11) Transportation Service. The carriage of one or more passengers for Consideration by a Highly Automated Vehicle operating without a human driver physically present and engaged in the driving task, where the trip originates or terminates within the City. The term includes, without limitation, automated taxicab, “robotaxi,” automated shuttle, automated microtransit, and automated transportation network service, and further includes the carriage of freight or cargo for Consideration by a Highly Automated Vehicle where the shipment is loaded or unloaded within the City.
(12) Trip or Delivery. Each separate conveyance of a passenger, group of passengers traveling together, or consignment of goods from a single point of origin to a single destination.
§ 19-4803. Imposition of Tax.
For taxable periods beginning on or after the effective date of this Chapter, there is hereby imposed upon every Deploying Entity a tax upon the privilege of performing Covered Services within the City by means of Automated Devices, measured as provided in Section 19-4804.
§ 19-4804. Measure and Rate of Tax.
(1) Delivery Services. The tax on Delivery Services shall be the greater of (a) five percent (5%) of Gross Receipts from Delivery Services or (b) fifty cents ($0.50) per Delivery.
(2) Transportation Services - Passengers. The tax on passenger Transportation Services shall be the greater of (a) five percent (5%) of Gross Receipts from such services or (b) one dollar ($1.00) per Trip.
(3) Transportation Services - Freight. The tax on freight Transportation Services shall be three percent (3%) of Gross Receipts from such services attributable to the portion of the Trip within the City, apportioned by miles traveled within the City over total miles traveled.
§ 19-4805. Exclusions and Exemptions.
The tax imposed by this Chapter shall not apply to:
(1) any Covered Service performed by or for the United States, the Commonwealth of Pennsylvania, the City, the School District of Philadelphia, or any authority or instrumentality thereof, to the extent the City is prohibited by law from taxing the same;
(2) the delivery of prescription drugs, medical supplies, or blood and organ products to a hospital, health care facility, or patient;
(3) Transportation Services provided exclusively to persons with disabilities as paratransit service under the Americans with Disabilities Act;
(4) the use of an Automated Device by an entity solely for its own internal purposes, where no Covered Service is offered or sold to the public or to any third party;
§ 19-4806. Registration.
(1) Every Deploying Entity shall, before performing any Covered Service in the City, register with the Department on a form prescribed by the Department and obtain a Commercial Activity License under Chapter 19-2600, if required.
(2) The registration shall identify (a) each type of Automated Device to be deployed, (b) the number of devices of each type operating in the City, (c) the Covered Services to be performed, and (d) any digital network or platform through which those services are offered. A Deploying Entity shall update its registration within thirty (30) days of any material change.
§ 19-4807. Returns and Payment.
(1) Every Deploying Entity shall, on or before the last day of the month following the close of each calendar quarter, file a return with the Department on a form prescribed by the Department and pay the tax due for that quarter.
(2) Each return shall state, separately for each category of Covered Service, the number of Trips or Deliveries performed, the Gross Receipts received, the tax computed under each applicable measure, and such other information as the Department may require.
(3) The tax imposed by this Chapter is in addition to all other taxes imposed by the City, including the Business Income and Receipts Tax, and shall not be credited against any of them.
§ 19-4808. Records; Trip and Delivery Data.
(1) Every Deploying Entity shall maintain, for not less than four (4) years, complete records sufficient to determine the tax due, including electronic logs showing, for each Trip or Delivery, the date, the point of origin and destination (which may be reported at the level of census tract or ZIP code), the device identifier, and the Consideration charged.
(2) Such records shall be made available to the Department upon request. Data furnished under this Section that identifies individual customers shall be treated as confidential tax information and shall not be disclosed except as permitted by law.
§ 19-4809. Presumptions.
Any Trip or Delivery originating or terminating in the City by a Deploying Entity registered or required to register under this Chapter shall be presumed to be a Covered Service performed by an Automated Device unless the Deploying Entity establishes, by records maintained under Section 19-4808, that the service was performed by a Human Operator or by a natural person.
§ 19-4810. Intended Use of Revenues.
It is the intent of Council that revenues from the tax imposed by this Chapter be appropriated, in the annual operating budget, to the zero-fare program fund, or any successor fund established for the same purpose, as a permanent source of funding for that program.
§ 19-4811. Administration and Regulations.
The Department shall administer and enforce this Chapter and is authorized to promulgate regulations, prescribe forms, and conduct audits and examinations as necessary to carry out its provisions, including regulations governing the allocation of Gross Receipts among multiple Deploying Entities and between human-performed and device-performed services.
§ 19-4812. Penalties and Interest.
(1) Any tax not paid when due shall bear interest and be subject to penalties as provided in Section 19-509 of The Philadelphia Code.
(2) Any Deploying Entity that fails to register, file a return, or maintain or produce the records required by this Chapter shall be subject to a fine of up to two thousand dollars ($2,000) for each violation. Each day a violation continues, and each unregistered Automated Device operated in the City, shall constitute a separate violation.
(3) The Department may pursue collection of unpaid tax, interest, penalties, and fines by any means available by law for the collection of City taxes.
SECTION 2. Severability.
The provisions of this Ordinance are severable. If any provision, definition, or application of this Ordinance is held invalid, preempted, or unconstitutional, including as applied to any category of Automated Device or Covered Service, such holding shall not affect the remaining provisions or applications, which shall be given effect without the invalid provision or application.
SECTION 3. Effective Date.
This Ordinance shall take effect on January 1, 2028, and the Department shall promulgate initial regulations and forms no later than ninety (90) days before that date.
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