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Senate of Pennsylvania
Session of 2015 - 2016 Regular Session


Posted: December 9, 2014 04:43 PM
From: Senator David G. Argall
To: All Senate members
Subject: Clarifying definition of Philadelphia’s Business Income and Receipts Tax applicability to brewers
In the near future, I will introduce legislation that would ensure breweries located outside of Philadelphia are not subjected to the city’s business income and receipts tax (BIRT). Under current law, Philadelphia can impose the (BIRT) on the gross receipts or net income of businesses that have an active presence in the city.

My proposed legislation would clarify the definition of business under the BIRT enabling act by providing that the term business does not include the sale of beer by a licensed manufacturer of malt or brewed beverages to a licensed importing distributor located in Philadelphia which sells and delivers to retailers. This would also avoid double-taxation since the importing distributor already pays the BIRT when it sells to a retailer in the City.

Breweries are already subject to extensive federal and state taxation and regulation and unlike any other business, they cannot sell their product directly to consumers and must utilize the three tier system established after the repeal of prohibition.

Breweries cannot establish a market in Philadelphia like other businesses and should not be subject to the same taxation.

This legislation will be similar to Senate Bill 1462 of 2014.

Introduced as SB858