You can avoid losing your Philly business license

Keeping your Commercial Activity License (CAL) active is key to legally operating a business in Philadelphia. The good news is, knowing what to do makes it easy to comply with City tax rules. Keep your business running smoothly with these tips:

Know what taxes you owe

When you do business in Philadelphia, you must file and pay taxes. The City has over a dozen taxes. The Business Income and Receipts Tax (BIRT) is the main tax all businesses should be aware of. You may have to pay the Net Profits Tax (NPT) if your business is not a corporation.

Depending on your type of business, you may have to pay Use and Occupancy Tax, Hotel Tax, or the Liquor Tax. If your business has employees, you may have to withhold the Wage Tax from their paychecks and remit it to the City. Visit phila.gov/revenue to learn more about the City's various taxes. Know your tax responsibilities up front to avoid surprises later.

Know the tax rates

Knowing what taxes you may owe is great, but knowing how much you may owe is even better. Philadelphia updates its tax rates regularly, and lately it has done so every year. Some taxes have different parts (like income vs. receipts, which are taxed differently). Staying on top of tax rates will help you:

• Budget properly,
• File accurate returns,
• Pay your fair share, not more or less, and
• Avoid penalty and interest.

Find all City taxes, rates, and more on our Business taxes by type web page.

Keep track of filing and payment deadlines

Missed deadlines are one of the biggest reasons businesses fall out of compliance. Philadelphia tax filing and payment frequencies depend a lot on the tax type. Make sure you know:

• When your taxes are due,
• How often you need to file, and
• Which forms you need to submit.

Several taxes can only be filed and paid online; for others, the filing frequency is determined by how much you owe. Here's a breakdown of some tax types, their due dates, and filing methods:

Visit our website for more filing info and payment due dates and frequencies.

Tip: Set calendar reminders so you don't miss anything.

Unmet obligations lead to license revocation

Doing business in Philly means having the proper licenses and permits, and keeping your business account active and compliant. License revocation is one of the tools we use to collect unpaid taxes. You can't do business in the city if your commercial activity license is revoked. A revoked license could make things even more complicated-it is mostly used in cases of serious delinquency and when business owners ignore our communication efforts, but it also affects your eligibility for preferred payment agreement terms.

Don't ignore our notices

Before revocation, we'll send you three warning letters-two mailed to your address on file, and one hand-delivered and posted at your place of business:

1. The first, "Notice of Transfer to the License Revocation Program", lists your unfiled returns and unpaid taxes. We give you 30 days to respond to this notice, either by paying in full or entering into a payment agreement.
2. The second, "Notice of Intent to Revoke License," lists your unfiled returns and unpaid taxes. You'll have 10 days to pay what you owe, or enter into a payment agreement. It also tells you how to request a pre-revocation hearing.
3. If not resolved within 10 days, we hand-deliver a "Notice of Revocation" to your place of business. We also post a "Cease Operations" sign, indicating the effective day of the revocation (usually 20 days from the posting date).

The warning letters will tell you who your case manager is and how to reach them. You should work directly with your case manager to understand your options and get in compliance.

Your business won't be able to operate or serve customers once a cease operations order takes effect. If necessary, the Philadelphia Police Department will enforce the business closure. You may be fined $300 per day if you keep running your business after your license is revoked.

Understanding your tax obligations and filing and paying on time are key to keeping your Philadelphia business license active.