For many years, Philadelphia has held the unfortunate distinction of having the highest Business Income and Receipts Tax (BIRT) and Wage Tax in the entire nation.

The distinction created a huge burden for workers and small business owners alike.

On Tuesday, June 28, Mayor Jim Kenney officially signed a bill to reduce the BIRT and Wage Taxes to create a fairer and more sustainable tax system for the city’s business owners, particularly in the aftermath of the pandemic.

“One of the things that became clear during our budget negotiations with City Council was a clear desire to support our local small, diverse business community who continue to rebound from the mess,” said Mayor Kenney.

As a result of the bill, the wage taxes in Philadelphia will be reduced to its lowest level in nearly 50 years, while the BIRT will reach its lowest level since 1988. 

Regina A. Hairston, President and CEO of the African-American Chamber of Commerce said this marks a turning point in how business is done in Philadelphia. 

“Not only does this milestone achievement alter how taxes are levied in our city, but it also shows how city government and the business community can come together to affect meaningful, inclusive change for businesses of all sizes in all neighborhoods,” she said.

Donna Allie, owner and CEO of Team Clean, has operated a business in the city for over 40 years.

Throughout her journey as a business owner, she has made the intentional decision of investing in the individuals in her community and provide job opportunities for them.

However, she revealed that one of the biggest challenges she has faced over the years is navigating the tax structure.

“For years, businesses that are located outside the city of Philadelphia have held an advantage over us located in this community,” said Allie.

She added that the signing of this bill and subsequent tax reduction is a step in the right direction and gives her hope for the future.

Councilmember Isaiah Thomas shared a similar sentiment about how the actions of today will influence the future.

“What we are doing right now today is letting people know that Philadelphia is open for business,” said Thomas. 

On June 1, the Inclusive Growth Coalition — a collection of the diverse chambers and organizations from across the region — hosted a rally just outside City Hall, calling for this very reduction in wage and BIRT taxes.

While the bill signing accomplishes this effort, Hairston made sure to note that the work is not done.

“I am proud to say the Inclusive Growth Coalition looks forward to continuing to work with this Administration on advancing strategic investments to support the growth of our economy and the ability for our diverse businesses to grow and thrive,” she said.