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Helping Low-Income Philadelphians with Tax Relief

Official:Amending Chapter 19-1500 of The Philadelphia Code, entitled “Wage and Net Profits Tax,” and Chapter 19-2800, entitled “Pennsylvania Intergovernmental Cooperation Authority Tax on Wages and Net Profits,” to expand eligibility for wage tax and net profits tax relief; to further reduce wage and net profits tax rates for low-income non-residents; and to provide for grants to low-income City residents in an amount equivalent to the PICA portion of wage and net profits taxes paid; all under certain terms and conditions.

Sponsor: Councilmember Brooks

Introduced: March 27, 2025

economic development housing taxation

Plain-Language Summary

This bill would expand tax relief for low-income non-residents and provide grants to low-income city residents equivalent to a portion of their wage and net profits taxes.

What This Bill Does

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Expands eligibility for wage tax and net profits tax relief to include low-income non-residents who meet certain criteria, such as those eligible for state low-income tax provisions or who would qualify for real estate tax relief under the Affordable Housing Tax Exemption Act.
Reduces wage and net profits tax rates for low-income non-residents.
Provides grants to low-income City residents equivalent to a portion of their wage and net profits taxes, specifically the PICA portion of their taxes.
Amends Chapter 19-1500 of The Philadelphia Code to update the definition of "Low Income Non-Residents" to reflect the expanded eligibility criteria.

Both Sides

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The case for

This municipal bill helps low-income non-residents who work in Philadelphia, but live elsewhere, by providing them with tax relief, and helps low-income City residents by giving them a grant equivalent to a portion of their taxes, making it a step towards a fairer and more equitable tax system. The bill expands eligibility for tax relief to those who need it most, and reduces their tax burden, allowing them to keep more of their hard-earned income. By amending the definition of "Low Income Non-Residents", the bill ensures that these individuals are accurately accounted for and treated fairly under the tax code.

The case against

This bill would divert millions of dollars in tax revenue from the city's general fund to low-income non-residents, while providing no comparable benefits to low-income residents who actually live in Philadelphia. By reducing tax rates for non-residents and granting them a portion of their taxes, the city would be giving a significant break to individuals who do not contribute to the city's schools, infrastructure, and public services. This policy sets a precedent that the city's tax base is a source of revenue for anyone, regardless of residency, at the expense of its own residents who bear the burden of taxation.

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