Philadelphia Tax Rate Changes, July 2015

Numerous tax rate changes took effect in Philadelphia, Pennsylvania, on July 1, 2015.

Rates for many taxes, such as earnings, wage, and school income taxes, have slightly decreased. Yet parking, use and occupancy tax rates have increased:

• Use & Occupancy tax
  • The tax rate jumped from 1.13% to 1.21%.
  • The assessment exemption dropped from $177,000 to $165,300 per property per year.
• Parking tax
  • The tax rate rose from 20% to 22%.

Hotel tax

In addition, the definition for hotel tax was amended to allow booking agents (such as Airbnb and FlipKey) to collect and remit the hotel tax on behalf of the operators, and to require booking agents to “alert operators of the Philadelphia tax obligations.” New legislation also stipulates that residential properties rented out for less than 31 nights in a row are subject to the hotel tax.

For additional information, please see this Tax Alert.

To facilitate transaction tax compliance, implement an automated solution such as AvaTax sales tax software or MyLodgeTax, the easiest way to manage and pay lodging taxes.