Title
Amending Chapter 19-1100 of The Philadelphia Code (“Personal Property Taxes”) by deleting all existing Sections and replacing them with an annual tax on certain intangible personal property, all under certain terms and conditions.
Body
THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1. Chapter 19-1100 of The Philadelphia Code is hereby deleted in its entirety and replaced with the following:
CHAPTER 1100. PERSONAL PROPERTY TAXES
§ 19-1101. Imposition and Rate of Tax.
(1) A tax is hereby imposed on the value of intangible personal property above such property valued at $100,000 owned by a natural person resident in the City of Philadelphia.
(2) Intangible personal property means all personal property which is not in itself intrinsically valuable, but which derives its chief value from that which it represents, including, but not limited to, the following:
(a) All stocks or shares of incorporated or unincorporated companies, business trusts, and mutual funds.
(b) All notes, bonds, and other obligations for the payment of money, and
(c) All comparable financial instruments, whether or not publicly traded.
(3) Intangible personal property does not include:
(a) Public loans issued by this Commonwealth or the United States, and public loans and obligations of any county, city, borough, town, township, school district and incorporated district of this Commonwealth and bonds Obligations of bodies corporate and public of this Commonwealth known as municipal authorities.
(b) Savings deposits, checking accounts, and savings certificates issued by any private bank, building and loan association, savings and loan association, credit union, savings bank, bank and trust company or trust company.
(c) Tax qualified retirement accounts such as 401(k) or IRAs.
(d) College and career savings accounts such as 529s.
(e) Shares or other indicia of ownership rights in, or the value of, a trade or business activity in which an individual materially participated. A taxpayer materially participated in a trade or business activity for a tax year if the taxpayer satisfied the requirements laid out in I.R.C. §469(h).
(4) Beginning in 2026, the tax is imposed each year at the rate of four mills on the value of intangible personal property above such property valued at $100,000 as of the end of the day on September 30 and such tax shall be payable in following calendar year, as set forth in Section 19-1102 and subject to the credits and penalties set forth in that Section.
(5) Exemption from tax. Individuals in the following classes shall be exempt from the tax:
(a) the class of individuals entitled to refund and/or forgiveness of taxes pursuant to State Low-Income Tax Provisions, including those who are eligible for the maximum refund and/or forgiveness available and those who are entitled to less than the maximum percentage amount; and
(b) the class of individuals who would qualify for real estate tax relief under a program established under the Affordable Housing Tax Exemption Act, Act of July 11, 2022 P.L.703, No. 58, 72 P.S. § 4728.102, et seq. (i.e., an individual whose income does not exceed the maximum annual income allowable for an eligible claimant to participate in the Pharmaceutical Assistance Contract for the Elderly Needs Enhancement Tier (PACENET)).
§ 19-1102. Discounts and Additions to Tax.
(1) Unless otherwise provided by special ordinance a discount of 1% shall be allowed on all personal property taxes paid up to and including the last day of February of the year in which such taxes shall be payable. If paid during the months of March, April and May of said year no discount shall be allowed. If paid during the months of June, July and August an addition of 1% per month or part thereof shall be imposed; if paid during the months of September, October, November or December an addition of 1.5% per month or part thereof shall be imposed.
(2) Upon all taxes remaining due and unpaid on the first day of January of the year next following the year in which such taxes are assessed and payable, there shall be added:
(a) an addition of 1.5% added to the additions prescribed above;
(b) interest at the rate of 1/2 of 1% per month, or part thereof; and
(c) an additional penalty of 1% on the first day of each month from February through August during the first year in which such tax is registered as delinquent.
§ 19-1103. Implementation.
The Revenue Department shall be responsible for administering and implementing the tax enacted pursuant to this Chapter and shall as necessary:
(1) Develop regulations further identifying the specific intangible personal property items subject to the tax and the manner of assessment of value of such personal property;
(2) Design appropriate tax filing forms and instructions for individuals and businesses subject to the tax;
(3) Modify by regulation the due dates for returns and payments set forth in this Section for administrative or other purposes.
§ 19-1104. Severability.
Each of the provisions of this Chapter are severable, and if any provision or portion thereof is held by a court of competent jurisdiction to be invalid, such determination shall not affect the remaining provisions. The legislative intent of the Council is that the remaining provisions of the Chapter would have been adopted if such invalid provision had not been included and any unlawful application of the law had not been made.
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Explanation:
[Brackets] indicate matter deleted.
Italics indicate new matter added.
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