Philly business privilege tax reform legislation working group: discussing 'contours of a proposal' in March - Technical.ly Philly

Jan. 19, 2011 12:02 pm

Philly business privilege tax reform legislation working group: discussing ‘contours of a proposal’ in March

A joint Philadelphia City Council and Nutter administration working group is examining details on business privilege tax reform, says City Councilman Bill Green. “[We are working] to achieve the underlying policy goals of the BPT reform legislation, which includ[es] helping small businesses, encouraging job creation, closing tax loopholes and making Philadelphia an attractive location for […]

Councilman Bill Green, with Councilwoman Maria Quinones Sanchez to the left. Photo courtesy WHYY.

A joint Philadelphia City Council and Nutter administration working group is examining details on business privilege tax reform, says City Councilman Bill Green.

“[We are working] to achieve the underlying policy goals of the BPT reform legislation, which includ[es] helping small businesses, encouraging job creation, closing tax loopholes and making Philadelphia an attractive location for businesses to locate, expand, and stay,” Green tells Technically Philly.

The working group is charged with taking elements of City Council Bill 100635, primarily sponsored by Green and City Councilwoman Maria Quinones Sanchez, and creating a new version more palatable to a big business community that labeled the legislation ‘ill-timed’ in recent council testimony.

Who is in this working group?

There are two working groups, Councilman Bill Green chief of staff Sophie Bryan says.

There’s “a technical one made up of staff-level folks, and an overarching one that includes Bill, Councilwoman [Maria Quinones] Sanchez, the Mayor’s chief of staff Clay Armbrister, Finance Director Rob Dubow, Revenue Commissioner Keith Richardson and others,” she tells Technically Philly.

While there is “no hard and fast deadline for the working group,” Green chief of staff Sophie Bryan says “there has been discussion about trying to have the contours of a proposal prior to the Mayor’s budget address for the next fiscal year, which likely will be sometime in March, but again, no firm deadline.”

“It couldn’t be more simple,” Green says. Among other things, the legislation would move the city from taxing a company’s net profits to its “gross receipts,” meaning all the money a business earns, regardless of how much it spends. The bill also included a popular initiative to cut taxes on businesses with gross receipts lower than $100k, city revenue that would be made up in the aforementioned shift. Overall, Green, Sanchez and other supporters touted their legislation as revenue neutral.

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To better show the process, Green’s staff worked with some developers at Indy Hall to create a Tax Calculator on a website dedicated to their tax reform initiatives.

On Nov. 30, in council testimony, Greater Philadelphia Chamber of Commerce Executive Vice President Joseph W. Mahoney applauded the attention to the city’s ‘onerous tax burden’ but questioned Green’s claim of the policy being revenue neutral.

“At the end of the day, this bill in its present form is a tax shift, not a tax cut,” Mahoney said then. “This complex tax shift not only creates inherent winners and losers across various economy sectors, but also depending on how a business entity is legally structured, disadvantages within an economy sector as well.”

Yesterday, chamber representatives confirmed that stance, until a new version of the legislation is shared with their policy desk.

In a Dec. 15 Daily News editorial, Green and Sanchez shared what they called the facts, suggesting the current system has winners and losers, including making winners of big companies based elsewhere and losers of smaller Philly companies.

“People who think they are opposed to it are really for it once we get the chance to explain,” Green told Technically Philly last month. “The trouble is that, of course, we can’t explain it to 1.5 million Philadelphians.”

Listen to an early December It’s Our Money podcast on the initial proposal with City Controller Alan Butkovitz, who opposed the original legislation.

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