Title
Authorizing the Committee on Legislative Oversight to hold hearings on the competitive challenges created by the net income portion of the Business Income and Receipts Tax, its history, the affordability crisis and routes to take to ensure a thriving business community in Philadelphia.
Body
WHEREAS, The Business Income and Receipts Tax (BIRT) originated in the mid 1980s in the midst of a fiscal crisis, decades of economic decline, and contraction in order to direct revenue to the City; and
WHEREAS, The net income portion of the BIRT tax places a steep levy on local businesses, and the lost revenue during the COVID-19 pandemic showed that this structure leaves the City vulnerable amid economic downturns and instability; and
WHEREAS, The gross receipts portion follows many guiding principles of a well constructed tax, such as being a low rate on a large tax base, taxing items and commerce that can’t as readily move outside of Philadelphia, and taxing items where the jurisdiction has advantages that make the tax tolerable for businesses; and
WHEREAS, The net income portion of BIRT is a high rate double tax and is largely paid by a class of businesses with little need to locate in Philadelphia to capitalize and profit on our City’s assets and markets. Philadelphia, as a result, has one of the lowest business densities among the country’s largest metropolitan areas; and
WHEREAS, Philadelphia has been economically more viable after recent cuts to the BIRT tax, has shown we can attract big events, and recently attracted a third Fortune 500 company to the City. To continue this upward trajectory, the city must explore the future of the net income portion of the BIRT tax and explore options for growing our economy and tax base while maintaining services to residents; now, therefore, be it
RESOLVED, BY THE COUNCIL OF THE CITY OF PHILADELPHIA, That we hereby authorize the Committee on Legislative Oversight to hold hearings on the competitive challenges created ...
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