Philadelphia, PA – Big changes are coming to the city’s Business Income and Receipts Tax (BIRT), and they’ll impact thousands of small businesses — including many real estate agents, brokers, and investors who operate as LLCs or independent firms.

Starting in 2026, Philadelphia will eliminate the longstanding $100,000 revenue exemption from the BIRT. This means all businesses, regardless of size, will now be required to pay the tax.

How the BIRT Changes Will Work

  • Current rule (through 2025): Businesses earning under $100,000 annually do not pay BIRT.

  • New rule (starting 2026): All businesses — including those earning under $100,000 — must file and pay BIRT.

  • First-time filers: Businesses that were previously exempt will file their first BIRT return by April 15, 2026, covering only 2025 income.

  • Ongoing filing: In 2027, these businesses will pay BIRT on 2026 income plus an estimated payment for 2027.

The BIRT includes:

  • 0.141% tax on gross receipts

  • 5.81% tax on net income

  • Gradual tax rate reductions are planned through 2039.

Impact on Philadelphia’s Real Estate Professionals

For realtors, real estate investors, and property management companies, this change could mean higher annual tax obligations — even for part-time agents or small brokerages. If your gross income was under $100K and you never filed BIRT before, you will now need to prepare for annual filings.

Available Support & Resources

To help businesses adjust, Philadelphia is offering tax assistance through:

  • Commerce Department

  • Revenue Department

  • Mayor’s Business Action Team – Email: business@phila.gov | Call: (215) 683-2100

Additionally:

  • Realtors and brokers earning under $250,000 may qualify for free accounting services.

  • Small business owners can apply for grants of up to $50,000 through the Small Business Catalyst Fund.

Why This Matters for Philadelphia Small Businesses

The elimination of the $100K BIRT exemption means that more small businesses will be taxed, affecting cash flow, budgeting, and profit margins. Planning ahead — including setting aside funds for quarterly estimates — will be essential.

If you are a Philadelphia real estate professional, it’s wise to speak with a tax advisor now so you understand the impact before the changes take effect.

Source: Philadelphia Inquirer (August 5, 2025).