Are you an entrepreneur considering making Philadelphia a stomping ground for your commercial activity?
Philly is indeed an ideal city for anyone with business aspirations.
Broadly, you can enjoy many benefits associated with running your operations in a big city (like access to vast target markets). Simultaneously, you can avoid the pitfalls of doing business in oversaturated, overpriced, and overpopulated places like New York or LA.
Still, there remains the matter of crossing your t’s and dotting your i’s. Managing the necessary red tape of running your business is an absolute must when participating in or profiting from any commercial activity in Philly.
One example is your Commercial Activity License.
“What is a Commercial Activity License?” you ask. We’ll explore that question below:
Are you intending to do any kind of business in Philadelphia?
The above question is relevant to our current and prospective clientele at GM Holdings because when we say “any kind of business,” we mean
any kind of business.
This list of commercial activities includes property owners renting to tenants.
All the same, you could be running a fruit stand, opening a restaurant, or launching an athletic goods store.
Regardless, anyone doing business in Philadelphia must possess a Commercial Activity License issued by The Department of Licenses and Inspections (L&I).
You could even have a business located beyond the city limits. You’ll still require a Commercial Activity License if your business activities involve Philly in any way, shape, or form.
Primarily, you need this license for your Business Income and Receipts Tax (BIRT) as it links all your businesses and the legal entity under which you’ve registered.
Exceptions for this rule exist–but it’s more of a variation than a full-on exception. We’ll examine this topic in the next section.
A Commercial Activity License doesn’t apply to
all
businesses, but the alternative requirement–an
Activity License Number–is similar.
Who requires an Activity License Number?
First, anybody renting three units in a building in which they live will need this documentation. Also, those receiving a vacant residential or commercial property license will need an Activity License Number.
Lastly, anybody operating a non-profit would require an Activity License Number instead of a Commercial Activity License.
Various odds and ends must be considered when receiving your Commercial Activity License in Philadelphia.
Tax account numbers like your Social Security or
Federal Employer Identification Number are necessary. You’ll also need your
Business Income and Receipts Tax ID.
Another crucial requirement is tax compliance. Specifically, all applicants must be up-to-date on all city taxes.
Lastly, you must offer the mailing address and name of either:
There are two methods to apply for your Commercial Activity License in Philadelphia.
The first–and likely the most convenient–approach is doing it online through
eCLIPSE.
Various prompts exist to guide you through this more streamlined process. Still, you can
book a virtual session to learn how to apply for your license via the eCLIPSE platform.
We’ll note that while the online route is quicker for completing the paperwork, you’ll have to wait a while for the city to process your application.
You can also apply for your Philadelphia Commercial Activity License in person at the Permit And License Center at 1401 John F. Kennedy Blvd. In taking this avenue, you must set an appointment from Monday to Friday during office hours of 8:30am to 3:30pm.
Note that the office closes at 12pm on the last Wednesday of each month.
Additionally, applicants without a city tax account can visit the Revenue Department during their appointment at the Permit And License Center.
Applying for your license in person allows you to receive your activity license the same day you apply.
Here it is. The part of the article where you face the financial music and deal with the astronomical upfront costs of receiving your Commercial Activity License.
Well–what if we told you it doesn’t cost a cent to obtain your Commercial Activity License? Because it comes at zero expense.
Of course, time is money, and you need to take a chunk of your day to apply–but all and all, free is free.
Alright. Finally. The kicker. That one inconvenience surrounding your Commercial Activity License that makes the whole thing seem not worth it. The renewal process.
Guess again. You don’t need to renew your Commercial Activity License. Once you’ve received it, it’s yours for life.
While this license might make for some additional red tape to navigate, it’s not much of a hindrance. All related regulatory bodies want to make this process as streamlined as possible to ensure business owners are above board.
Your Commercial Activity License is–in spirit–a Philly business license. However, it’s not the only business license required to perform commercial activities in Philadelphia. Also necessary is a Pennsylvania State Business License.
Many facets exist for Pennsylvania State Business Licensing. Read this
article from Forbes to learn more about it.
On average, business licensing from the state of Pennsylvania costs companies
around $125. However, additional fees can apply depending on the nature of your operation.
As you can see, there aren’t too many hurdles to starting your business in Philadelphia. Once you’ve navigated the minimal red tape, you can be up and running and earning revenue before you know it.
You’ve chosen wisely by selecting Philadelphia as your place to perform your commercial activities. The city offers seamless access to larger markets like Boston and New York. Local government policies robustly support the entrepreneurial spirit, tax rates are manageable, and small business growth continues to excel.
Want to learn more about the ins and outs of Philadelphia? Check out
GM Holding’s blog for deeper insights into the city’s comings, goings, and cultural intricacies.
