A few weeks ago, the Greater Philadelphia Chamber of Commerce sent a list of questions to Council members Bill Green and Maria Quinones-Sanchez regarding their proposal to overhaul the business privilege tax.
In case you were waiting with baited breath, here are the answers the members sent back yesterday.
The city's business-privilege tax has two parts - a gross-receipts portion, which taxes firms on their sales, and a net-income portion, which taxes profits. Green and Quinones-Sanchez are proposing a five-year phase-out of the tax on profits in favor of a higher gross-receipts tax. They argue that this would remove the disincentive for businesses to locate in Philly, and would spread tax burden more fairly.
But the Chamber asked about "winners and losers" under the proposal and wanted to know how the plan would impact industries like retail, hospitality and construction. They also asked how such tax models have played out in other regions.
The council members say they plan an amendment to protect construction from being hit with multiple taxes. They also say that an improved economy could boost the hotel industry in the long run. And they say it's hard to find another city to directly compare Philly with to show how this would work.
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