Philadelphia Net Profit Tax

Resolving Problems under the City Net Profit Income Tax

The Philadelphia Net Profit Tax is actually one component of the city's Business Privilege Tax (BPT), which covers income from both gross receipts and net profits of entities doing business in Philadelphia, regardless of where they are based or located. If you have received a notice from the City of Philadelphia Law Department or Department of Revenue, contact Joseph A. Gembala III, Esq. & Associates. Our experience with resolving or compromising liability under both the BPT and the Philadelphia Net Profit Tax can save you considerable trouble and expense.

Simply put, the Business Privilege Tax requires businesses operating in Philadelphia, or performing work in Philadelphia under client or customer contracts, to pay municipal taxes on both the gross receipts generated within the city and on the net profits of the business for that work. Theoretically, all businesses performing work in Philadelphia will obtain a business license and will file both gross receipts and net profit tax returns to satisfy the Business Privilege Tax requirements.

Many of our firm's clients get into trouble with the BPT by neglecting to acquire the license, failing to file the gross receipts return, and failing to file the net profit tax return. Any of the three violations can threaten your business profit by exposing you to the risk of interest and penalties as well as liability for the unpaid tax. With respect to the net profit tax, the city applies a 10-year lookback period with the right to levy taxes for years prior to the year of immediate concern.

At Joseph A. Gembala III, Esq. & Associates, our experience with representing businesses throughout eastern Pennsylvania and southern New Jersey can help you resolve net profit tax disputes on terms you can live with. In many cases, tax attorney Joseph Gembala can obtain a compromise of the taxes owed, full or partial forgiveness of the interest and penalty charges that can severely inflate your liability, and make sure that you receive full credit for gross receipts payments that can reduce your liability under the Philadelphia net profit tax.

For additional information about your most constructive legal alternatives to resolve Philadelphia net profit tax problems, contact an experienced municipal income tax lawyer at Joseph A. Gembala III, Esq. & Associates.