1/2/3

Y/N

TRC Recommendation

Status

2

Y

1: Make real estate taxation more fair by separating the property assessment and appeals process so the assessing agency does not judge its own work.

Enacted by Charter Change in May 2010.  This recommendation is now the law of the land.

2

N

2: Make real estate taxation more fair by establishing a taxpayers’ advocate to represent taxpayers in matters regarding real estate assessment and appeals.

Embodied in an executive order that must be enacted by the Mayor. (Issue must be revisited)

1

Y

3: Make real estate taxation more fair by establishing accurate land and structure values for all property parcels.

The city agency that assesses property for tax purposes has improved overall assessment accuracy. (We must now monitor progress)

2

N

4: Make real estate taxation more fair by establishing a set of assessment-practice principles to guide assessment procedures.

1

Y

5: Make real estate taxation more fair by eliminating fractional assessments so tax bills are based on actual property value.

The city has eliminated fractional assessments and now bases assessments on full actual property value.

2

N

6: Make real estate taxation more fair by implementing a property tax buffering program so that assessments are based on a rolling, three-year average to prevent one-time spikes in Real Estate Tax bills.

2

N

7: Rationalize the way the City levies its Real Estate Tax by implementing a system of budget-based property taxation so that City Council sets tax rates after it knows the true assessed value of the City; currently, Council sets tax rates before assessments are performed so increases in assessments can result in increasing tax bills and fiscal windfalls for the City.

2

N

8: Change the incentives and disincentives of real estate taxation by phasing-in land-value taxation to decrease tax rates on structures and increase tax rates on land so that the City provides an incentive for economic development and a disincentive to blight creation and speculation.

3

N

9: Help those who cannot afford to pay their Real Estate Tax burden by expanding efforts to address property tax “ability to pay” issues: implement a quarterly payment plan so taxpayers who do not pay taxes through their mortgage companies do not have to assemble the cash to make their tax payment on one date; apply tax payments to the current year’s tax liability so that delinquent taxpayers who are making tax payments can qualify for state assistance; and consider developing a low-income property tax relief program for truly needy taxpayers.

The city administration has committed to work to help develop appropriate programs to address “Ability to Pay” issues. (We must now monitor progress)

3

Y

10: Help those who cannot afford to pay their Real Estate Tax burden by advocating for increased property tax relief from the Commonwealth of Pennsylvania: create a state circuit-breaker property tax relief program to hold down Real Estate Tax increases for those on fixed incomes; expand state-funded low-income property relief programs for truly needy taxpayers.

As part of the law to allow expansion of gambling in the Commonwealth of Pennsylvania, low-income homeowners in Philadelphia will receive rebates on a sliding scale of up to $650 per year, plus an additional reduction of 50% for homeowners who make less than $30,000 per year. The city administration has committed to work to help develop appropriate programs to address “Ability to Pay” issues. (We must now monitor progress)

3

Y

11: Help those who cannot afford to pay their Real Estate Tax burden by increasing awareness about Real Estate Tax relief programs.

The city administration has committed to work to implement this recommendation. (We must now monitor progress)

3

Y

12: Improve the city’s ability to target its taxation by advocating for a change in the Pennsylvania Constitution to allow for variable real estate tax rates so that commercial and residential properties could be taxed at different rates.

The city administration has committed to work to implement this recommendation. (We must now monitor progress)

3

Y

13: Concentrate tax reduction efforts on the taxes that are most harmful to the city’s economic competitiveness: do not reduce the Real Estate Transfer Tax rate at this time.

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2

Y

14: Improve the fairness of the Real Estate Transfer Tax by making technical changes to the tax that will eliminate loopholes currently exploited by certain commercial entities.

This recommendation is now the law of the land.

3

N

15: Improve the rationality of the overall tax structure by eliminating the Real Estate Non Utilization Tax, which, because of questionable legality, has never been enforced or collected.

3

Y

16: Concentrate tax reduction efforts on the taxes that are most harmful to the city’s economic competitiveness: do not reduce the Use and Occupancy Tax rate at this time.

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3

Y

17: Improve the city’s ability to target its taxation by repealing the Use and Occupancy Tax if a Constitutional amendment permits Philadelphia to tax different classes of real estate at different rates; the cumbersome and confusing tax should be eliminated in favor or a more-straightforward increase in the commercial Real Estate Tax rate.

The city administration has committed to work to implement this recommendation. (We must now monitor progress)

2

Y

18: Improve the City’s economic competitiveness by adopting single-sales factor apportionment, which would base taxes on business income on the percentage of a firm’s Philadelphia sales and remove the disincentive for firms with few Philadelphia sales to remain in the city.

In 2011, the city legislated the phasing in of single-sales factor apportionment for payers of the Business Privilege Tax.  The city administration has not yet implemented the regulations necessary to do so for all firms. (We must now monitor progress)

2

N

19: Improve the City’s economic competitiveness and the fairness of its business taxes by granting unincorporated businesses a deduction for payments to partners, members, and sole proprietors when calculating net income under the business privilege tax; by enacting this recommendation, the City would phase-in an elimination of the current disparity that forces partnerships to pay a higher tax burden than their corporate competitors.

2

N

20: Improve the City’s economic competitiveness by lengthening the Business Privilege Tax net operating loss carryforward period from three years to ten years so that start-up firms that will experience initial losses are no longer discouraged from locating in Philadelphia.

2

N

21: Improve the fairness of the City’s business taxes by establishing two estimated payment dates for the Business Privilege Tax so taxpayers no longer have to the cash to make their tax payment on one date.

2

Y

22: Improve the fairness of the City’s business taxes by unifying statutory refund and assessment periods so the City and taxpayers have equal rights to collect back taxes and seek refunds.

This recommendation is now the law of the land.

1

Y/N

23: Improve the City’s economic competitiveness by incrementally eliminating the Business Privilege Tax by fiscal year 2015.

This recommendation — amended to incrementally eliminate the Gross Receipts Portion by 2017, and incrementally reduce the Net Income Portion to 6.0% by 2017 — is now the law of the land.  IN THE WAKE OF THE INTERNATIONAL FINANCAIL CRISIS OF 2008, THE SCHEDULE WAS SUSPENDED; THE NET INCOME PORTION REDUCTIONS WILL PHASE IN BY 2023 AND THE GROSS RECEIPTS PORTION WILL BE SET AT .1415%.  FIRMS WILL RECEIVE A CREDIT FOR THE FIRST $100,000 IN GROSS RECEIPTS BY 2016.  NEW FIRMS WILL NOT HAVE TO PAY THE BUSINESS PRIVILEGE LICENCE FEE AND WILL NOT BE SUBJECT TO THE BUSINESS PRIVILEGE TAX FOR THEIR FIRST TWO YEARS IN BUSINESS.  IF ECONOMIC CONDITIONS IMPROVE, THIS TIMETABLE MAY BE ALTERED.

2

Y

24: Reduce the complexity of the City’s Wage Tax by adjusting tax rates on January 1st so taxpayers will apply a single rate to a given tax year instead of the current situation where the tax rate changes in the middle of the tax year.

This recommendation is now the law of the land.  IN THE WAKE OF THE INTERNATIONAL FINANCAIL CRISIS OF 2008, THE SCHEDULE WAS ALTERED TO MAKE CUTS ON JULY 1 AGAIN.  IF ECONOMIC CONDITIONS IMPROVE, THIS TIMETABLE MAY BE ALTERED.

1

Y

25: Improve the City’s economic competitiveness by dramatically reducing the Wage Tax Rate to 3.25% for residents and non-residents by 2014.

This recommendation — amended to reduce the Wage Tax to 3.6% for residents and 3.25% for non-residents by 2013 — is now the law of the land. (See recommendation 26 for additional notes).  IN THE WAKE OF THE INTERNATIONAL FINANCAIL CRISIS OF 2008, THE SCHEDULE WAS ALTERED AND THE WAGE TAX IS TO BE REDUCED TO 3.7974% FOR RESIDENTS AND 3.3546% FOR NON-RESIDENTS BY 2014.  IF ECONOMIC CONDITIONS IMPROVE, THIS TIMETABLE MAY BE ALTERED.

3

Y

26: Improve the City’s economic competitiveness by dramatically reducing the Wage Tax Rate to 3.0% for residents and 2.5% for non-residents in 2014 if the city receives support from the Commonwealth of Pennsylvania for Wage Tax relief.

As part of the law to allow expansion of gambling in the Commonwealth of Pennsylvania, Philadelphia receives an infusion of revenue to reduce the Wage Tax, which will drop to 3.6% for residents and 3.25% for non-residents by 2013.  This recommendation is now the law of the land.  IN THE WAKE OF THE INTERNATIONAL FINANCAIL CRISIS OF 2008, THE SCHEDULE WAS ALTERED AND THE WAGE TAX IS TO BE REDUCED TO 3.7974% FOR RESIDENTS AND 3.3546% FOR NON-RESIDENTS BY 2014.  IF ECONOMIC CONDITIONS IMPROVE, THIS TIMETABLE MAY BE ALTERED.

3

N

27: Assist low-income Philadelphians by supporting efforts to help residents apply for state and federal income tax relief through existing programs that are currently underutilized.

The City administration did not include funding for this initiative in its proposed current operating budget or Five-Year Financial Plan. (Issue must be revisited)

3

Y

28: Concentrate tax reduction efforts on the taxes that are most harmful to the city’s economic competitiveness: do not reduce the Sales Tax, Parking Tax, Amusement Tax, Vehicle Rental Tax, Hotel Room Rental Tax, Liquor Sales Tax, Mechanical Amusement Device Tax or Hotel Use or Occupancy Tax rates at this time.

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