Small-business tax relief bill has nine sponsors and 337 days in committee
Bill 251026 would exempt sole proprietors and single-member LLCs from the Business Income and Receipts Tax. It has never had a hearing.
A bill to exempt Philadelphia's smallest businesses from the city's main business tax has been stuck in committee for nearly a year. The Inquirer reported that Council President Kenyatta Johnson is holding it up.
The bill matters to freelancers, contractors, therapists, vendors and other one-person businesses. They lost a break when the city ended the $100,000 exclusion from the Business Income and Receipts Tax (BIRT) after a legal challenge argued the exclusion violated the state constitution's uniformity rule, the Inquirer reported. Billy Penn has also covered the push for relief.
What the bill does
Bill 251026, sponsored by 6th District Councilmember Mike Driscoll, would amend the BIRT chapter of the city code to exempt sole proprietorships and single-member LLCs from "some or all" of the tax. The goal, as the Inquirer described it, is to help small firms while avoiding the constitutional problem that sank the old exclusion.
The administration's fiscal note, dated March 17, 2026, estimates the cost at about $118 million over five years. It also estimates that nearly 55% of current BIRT filers would qualify. The Inquirer cited an administration estimate of at least $29.5 million a year. The Department of Revenue also warned that businesses might restructure to qualify, which could raise the cost.
What our records add
- Introduced Nov. 20, 2025, and referred to committee the same day. That is the only action in its Legistar history. As of Oct. 23 it has spent 337 days in committee with no hearing listed.
- Committee: Finance, chaired by Majority Leader Katherine Gilmore Richardson, according to the Inquirer. She previously supported the idea but declined to comment, the paper reported.
- Sponsors: Legistar lists nine. They are Driscoll, Anthony Phillips, Quetcy Lozada, Jeffery Young Jr., Kendra Brooks, Jim Harrity, Nicolas O'Rourke, Brian O'Neill and Mark Squilla. Nine is a majority of the 17-member Council, which lines up with the Inquirer's report that most members back it. Johnson and Gilmore Richardson are not listed.
- Meanwhile, Finance has met. The committee heard and advanced the police forensics lab financing on Oct. 7. That bill went from introduction to law in 32 days.
What officials have said
Driscoll told the Inquirer that the president "wasn't interested in moving any bills that could risk revenue generation." He added that "sending a message to small business that we're not here to help right now" is the wrong message.
Johnson did not explain the holdup to the Inquirer. He said that "all of us on City Council understand the challenges" small businesses face, and that Council is reviewing tax relief as part of the fiscal 2028 budget. The mayor's office declined to comment, the paper reported.
Johnson made a similar point about costly bills this week. Talking to the Inquirer about the Transit Access Fund, he said his scrutiny "has nothing to do if they are good ideas or bad ideas."
What's next
The bill moves only if the Finance Committee schedules a hearing. Johnson's comments point to the budget cycle. The mayor presents the fiscal 2028 budget in the spring, and Council must pass a budget by June. The bill as written would have applied to tax year 2026 and taken effect July 1, 2026, according to the fiscal note, so any version that moves would likely need new dates. Watch the Legistar calendar for Finance Committee hearings.