A study commissioned by the Philadelphia Growth Coalition says raising commercial real estate taxes could lower other taxes and help create nearly 80 thousand new jobs over the next ten years. Any proposal to raise the commercial property tax rate would require a change to the state's constitution, since all property must be taxed at the same rate under state law.
Econsult Solutions Inc. was hired to analyze the impact of the proposal by the Philadelphia Growth Coalition to raise the commercial property tax rate by 15% (1.60% for commercial compared to 1.39% for residential owners).
The report says higher commercial property taxes would generate enough funds for the city wage tax to drop by 3% by 2025. It would also allow the net income portion of the Business Income & Receipts tax to be cut in half.
The tax shift would potentially create 79,000 jobs over a decade. "That compares to an increase of just 18,000 jobs over the same period if the charges are not enacted," the report said.
Legislature Must Act
An amendment to the state constitution would be required to allow Philadelphia to charge a higher tax rate for commercial properties than for residential.
The Philadelphia City Council approved a resolution calling on the state legislature to pass an amendment giving the city authority to charge higher commercial property tax rates. A bill is expected to be introduced in the General Assembly this fall.