Philadelphia, PA Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Governing tax
- Business Income and Receipts Tax (BIRT)
- Rate structure
- Uniform: same mills + % for all businesses
- Carve-out
- Regulated industries pay receipts-tax only
- License required
- Commercial Activity License, no fee
- 2026 rate
- 1.395 mills receipts / 5.65% net income
Summary
Philadelphia taxes almost every business under one uniform BIRT rate structure, with only a narrow carve-out for regulated utilities and securities dealers.
Every business shall pay an annual tax on each dollar of annual receipts at the millage rate shown in the second column ... and an annual tax on net income at the percentage rate shown in the third column ..., except that a regulated industry shall only pay an annual tax on each dollar of annual receipts at the millage rate shown in the second column, and in an amount not to exceed the percentage of net income shown in the third column
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: 2026 Code: Electronic version of The Philadelphia Code and Home Rule Charter is current through August 19, 2026).
Full Breakdown
The Business Income and Receipts Tax (BIRT) applies to any business, trade, profession or commercial activity in Philadelphia at a single receipts-mills-plus-net-income-percent rate that applies across industries and business types, there is no separate rate schedule by NAICS code or business classification. The only carve-out is for a "Regulated Industry" (a public utility taxed under PUC tariffs, or a business taxed under Articles VII, VIII, IX or XV of the state Tax Reform Code), which pays only the receipts-mills tax, capped at what the net-income percentage would otherwise yield. Every business must also hold a no-fee Commercial Activity License from Licenses and Inspections before operating, that license itself is not tiered by business type either.
Violations & Fines
Operating without procuring the required Commercial Activity License, or failing to file BIRT returns and pay tax owed, can trigger license denial or revocation by Licenses and Inspections and referral to the Department of Revenue or Law Department for collection.
Frequently Asked Questions
Does Philadelphia classify businesses into different tax tiers?
Do I need a special license for my type of business?
Sources & Official References
Other rules in Philadelphia
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