New program offers free tax preparation services to small businesses in Philadelphia.
The city of Philadelphia has initiated a new program designed to provide complimentary tax preparation services for small businesses earning less than 0,000 annually. Announced by Mayor Cherelle L. Parker, the Philadelphia Free Business Tax Preparation program represents a significant investment, with the city allocating .5 million annually for a duration of at least five years. This initiative aims to assist an estimated 50,000 businesses which are now obligated to pay the Philadelphia Business Income and Receipts Tax (BIRT) due to the recent removal of a longstanding exemption that previously benefited small enterprises.
Business owners seeking more information about the program can visit the official website managed by the city. Through this service, the city will engage licensed private tax professionals who will assist eligible business owners in filing not only their BIRT returns but also their city, state, and federal tax returns. It is important to note that this assistance will incur no costs for the business owners participating in the program.
The removal of the BIRT exemption for businesses generating less than 0,000 in Philadelphia revenue has brought new financial challenges to many of the city’s small businesses. Previously, this exemption allowed a large number of small firms to avoid the complexities of tax compliance associated with BIRT. However, the Parker administration decided to eliminate this exemption following a lawsuit, asserting that it contravened state law requirements for uniform taxation.
As part of the city’s endeavor to ease the transition into this new tax landscape, the funds anticipated from the new BIRT payments—estimated at approximately million—will be employed to support various business assistance programs. The city council has approved increasing this budget to approximately million, directing funds toward existing programs like the Philadelphia Catalyst Fund, which provides direct grants to local businesses.
In addition to the Free Business Tax Preparation program, there are ongoing discussions regarding legislative measures that may exempt certain classes of businesses—especially sole proprietorships and enterprises with just one employee—from the new BIRT regulations. These proposals are currently under evaluation, with legal considerations regarding the uniformity clause in Pennsylvania’s tax laws being a critical factor in their feasibility.
Overall, the Parker administration’s proactive approach aims to bolster Philadelphia’s small businesses, acknowledging their essential role in the local economy while navigating the complexities introduced by the recent tax changes.
