So you want to open a business in Philadelphia?
A Technically Philly reader recently launched her first venture in the city’s limits and thought the process was agonizing enough and the help non-existent enough to share.
She’s fairly straight-laced, she tells us, so she wanted to open her operation as legitimately and legally as possible. Yes, a good tax-paying business opening up shop in Philadelphia, so I’m sure we all expect the red-carpet treatment from the city.
Except, of course, as you know, the process was laborious and involved so many wrong turns, that we decided to give you all a short hand.
Below, in addition to the 15 steps and more than two months this passionate entrepreneur took to give money to the city, we show you the right way to launch your business in Philadelphia in five (oh my God, we know it won’t actually be easy) steps.
Our reader has asked to remain anonymous, so as to focus our attention on the real problem: that opening a legitimate business and trying to pay taxes in Philadelphia should be so easy that you could do it accidentally while falling out of a truck. But it’s not.
How to legally start a business in Philadelphia in as few steps as possible
- Decide what type of business — sole proprietorship, partnership, LLC or otherwise.
- Register for an EIN with the IRS.
- File the state’s Fictitious Name form with the Pa. Dept. of State Corporation Bureau, and wait for your number.
- Complete online the PA 100 form from the Pa. Dept. of Revenue.
- File the Philadelphia Business Privilege tax form.
Below, we rehash her own account of the process:
- Not fearing liability and planning on working with only independent contractors, she decided that a sole proprietorship was best for her and got cooking on Aug. 24.
- That day, she applied for an Employee Identification Number (EIN) with the U.S. Internal Revenue Service, basically a social security number for a business.
- She tried to apply for the Philadelphia business privilege tax form on Aug. 25, but found two problems: she couldn’t access the form online, which said it could only be accessed in Internet Explorer and downloading IE onto her Mac didn’t help. “It’s Philadelphia’s fault,” she said then, and gave up.
- On Aug. 26, she took her EIN to open up a business checking account but was told she needed the city’s business privilege tax form and a state doing-business form.
- On Aug. 27, she called the city’s Licenses & Inspections department, whose hours — despite what they were listed as online — were suddenly 10-3, according to a recording.
- On Aug. 28, she called L&I again, at 1 p.m., the same recording asked her to call during normal business hours.
- On Aug. 31, she used the city’s new 311 service, which directed her to phila.gov/li, where a PDF of the business privilege tax form is available to be printed and mailed. The form, she was told, can be be filed online — for “a small fee.”
- She printed the form and then called 311, L&I and finally the state Revenue Dept. before someone knew what a Pennsylvania Sales and Use Tax license number was, which was needed for the city’s business privilege tax form.
- To get the PSUT license number, she was told to file the lengthy online PA 100 Business Tax Registration survey.
- Four business days later on Sept. 7, she was e-mailed the PSUT number.
- She used the number to finish her city business privilege tax form, which she mailed to the city’s license issuance unit of L&I.
- A month after mailing her $300 check along with the Business Privilege Tax form, she hadn’t heard a thing from the city. Upon calling 311, she was told it could take up to eight weeks for her check to be cashed and license to be mailed.
- Not wanting to wait, she pleaded with her bank to let her open the account sans forms. They did so, using her EIN and PSUT form. (Some banks, we’re told, don’t require the BPT license at all, while others do.)
- The reader’s city Business Privilege Tax License arrived in her mailbox on Friday, Oct. 29, a full two months after she sent it.
- She now has the privilege to do business in Philadelphia and file another quarterly tax!
Thanks for doing business in the City of Philadelphia!
Is this unfair? Is this any different in other big cities? Or other municipalities? Who has experience doing this elsewhere?
This is a semi-regular department we may or may not call Top Ten Tuesdays. There’s no judging in brainstorming. See others here. Yes, this was 15 steps, but you didn’t expect that we’d do anything with the city government in the actual allotted number of steps, did you?
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