The department said in a bulletin posted online Tuesday that its temporary nexus relief instituted in April 2020 amid the onset of the novel coronavirus pandemic would this week on Wednesday, matching the state's expiration of its own nexus relief. Starting Thursday, entities outside the city will have nexus with Philadelphia for the purposes of its business and income receipts tax, or BIRT, if a city resident works from home, according to the bulletin.
The bulletin noted that a limited exception will apply if an employee's activities are protected by the Interstate Income Tax Act of 1959
. That law, known as P.L. 86-272, insulates businesses from tax on net income when soliciting tangible personal property orders is their only connection to a state. The bulletin said that the federal law shields businesses from the net income portion of the BIRT, which is currently imposed at 6.2%, but that businesses are still liable for the gross receipts portion of the tax, which is imposed at a rate of 1.415 mills.Additionally, the bulletin said that the sourcing and apportionment relief for the BIRT and the city's net profits tax expired on June 10, when Gov. Tom Wolf's emergency declaration was lifted. The temporary relief said that Philadelphia residents who normally worked outside the city but were working from home during the pandemic shouldn't have sourced their receipts to the city. With that provision lifted, the bulletin said the city's normal sourcing an apportionment rules will apply.
The bulletin was dated June 25.
--Editing by Vincent Sherry.
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