Tuesday, July 29, 2014
Inquirer Daily News

Coalition pushes for hike in the gross receipts portion of the BPT

We mentioned this morning the various budget-balancing scenarios that Council seems to be considering. Isaiah Thompson at City Paper reports on a coalition that's pushing an additional idea -- a hike in the gross receipts portion of the business tax, to mid-nineties levels.

Coalition pushes for hike in the gross receipts portion of the BPT

We mentioned this morning the various budget-balancing scenarios that Council seems to be considering. Isaiah Thompson at City Paper reports on a coalition that's pushing an additional idea -- a hike in the gross receipts portion of the business tax, to mid-nineties levels.

The idea is this: the gross receipts tax is a tax on net sales – rather than revenue/income.

Because large companies can easily hide or move their income, the reasoning goes, the gross receipts tax is the only way to tax the operations of major, national retailers in the area.

One of the strongest arguments against raising this tax is that, because it taxes sales regardless of income, it can tax a business that isn't turning a profit. To answer this challenge, the Coalition is proposing that all businesses with receipts under $500,000 be exempted.

Councilmembers Green and Sanchez have expressed interest in reconsidering the conventional wisdom about the gross receipts tax (that because it taxes sales rather than profits, it needs to be reduced), but we're not hearing much talk about this in the current budget cycle.

My thoughts on my experience with the Business Privilege tax over here.

Update: Sorry, the coalition in question is the Coalition for Essential Services.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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