Philadelphia Tax Problems

Brandywine Tax Resolution has extensive experience in representing the Taxpayer with tax problems with the City of Philadelphia. This experience includes audits with the Department of Revenue, and representation before the Tax Review Board and the Philadelphia Court of Common Pleas. Additionally, Brandywine Tax Resolution has familiarity with all types of Philadelphia taxes including the Business Privilege Tax, and the Wage, Net Profits and Earnings Tax.

Business Privilege Tax

The business privilege tax is imposed on net income and gross receipts attributable to Philadelphia. The tax is levied for the privilege of doing business in Philadelphia. For those taxpayers whose primary place of business is located outside of Philadelphia, the business privilege tax is imposed on that portion of their business that is conducted within the City. All Taxpayers, regardless of their year-end, must file annual business privilege tax returns on or before April 15th following the tax year. A business privilege license must be obtained from the Department of Licenses and Inspections by any person who does business in Philadelphia.

Wage, Net Profits and Earnings Tax

The wage tax is imposed on the compensation of Philadelphia residents and the wages earned within Philadelphia by nonresidents. The tax should be withheld by the employer and remitted directly to the Department of Revenue. The earnings tax is imposed on residents of Philadelphia who earn wages from an employer (usually out-of-state) which have not been subject to wage tax.

The net profits tax is imposed on unincorporated businesses, such as sole proprietors and partnerships, doing business in Philadelphia. The net profits tax rates are the same as the resident and nonresident wage tax rates.

Philadelphia Department of Revenue

When the Department of Revenue determines that the Taxpayer is to be audited, a request for production of books and records in issued. The general statute of limitations for collecting taxes is six years, and the general limitation for an assessment of tax is three years from the latter of the due date for the filing of a tax return or the actual filing date of the tax return. Where the Taxpayer refuses to cooperate, or produce records relevant to the issues examined in the audit, the audit may be completed using any and all available records as well as reasonable estimates. The Department of Revenue is also authorized to subpoena documents. There is a three year statute of limitations for the filing of refund petitions with the Department of Revenue that begins from the date of payment or the due date for the tax, whichever is later.

Tax Review Board

At the conclusion of an audit or other determination that monies are due to the Department of Revenue, a notice of assessment or notice of determination is issued. Petition for review of such assessment or determination must be filed with Tax Review Board within sixty days of the mailing date of the notice. The Taxpayer has ninety days to file a refund petition with the Tax Review Board after the Department of Revenue has rendered it decision on the initial refund application. As a procedural matter, both merit and refund petitions require a determination on behalf of the Department of Revenue before the Taxpayer has the right to petition the Tax Review Board. Additionally, the Taxpayer may file a petition for the abatement of interest and penalties. The standard of review used by the Tax Review Board in evaluating whether an abatement should be granted is whether it believes that the Taxpayer has acted in good faith, without negligence, and without intent to defraud the City.

Philadelphia Court of Common Pleas

Tax Review Board decisions may be appealed to the Philadelphia Court of Common Pleas within thirty days of the mailing date of the notice of decision.

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