The Net Profits Tax (NPT) is levied on the net profits from the operation of a trade, business, profession, enterprise or other activity by:
- Residents, even if business is conducted outside of Philadelphia and
- Non-residents who conduct business in Philadelphia.
The Net Profits Tax is filed annually. The current year estimated Net Profits Tax is payable in two estimated payments. Each estimated payment must be equal to 25% of the Net Profits Tax computed from the prior taxable year. The 1st installment is due by April 15 and the 2nd installment is due by June 15.
Visit the Department of Revenue website for current rate information.
Paper tax packages are no longer mailed to taxpayers. Tax payers must file electronically or download a paper return from the Department of Revenue website.
Who Must File
Net Profits Tax is due by businesses organized as:
- Estates and trusts
The rental of property, in most cases, is considered the operation of a business.
A return must be filed even if a loss is incurred. If no return is filed, non-filer penalties are imposed.
The failure of any person to receive a tax package does not excuse them from the responsibility of filing a return and paying the tax due. The tax can be filed and paid on-line.
Taxpayers can obtain a 60 day extension (until June 15) that can be obtained by filing an extension form. Taxpayers should go to the e-file section of the Department of Revenue Website and print a customized extension payment coupon. In instances where the taxpayer has obtained a Federal extension (for example, 6 months) the additional time will be granted, but the taxpayer needs to send in a copy of the Federal Extension. The extension period cannot exceed the end date of the Federal extension.
Exclusions from Net Profits Tax
Corporations are exempt from the Net Profits Tax
For complete information, refer to the Net Profits Tax page of the Department of Revenue website.