Blurring city line for business

City Avenue, commonly referred to as City Line Avenue or U.S. Route 1, is known throughout the region as the dividing line between the city of Philadelphia and the Montgomery County suburbs of Lower Merion. City Avenue is a hub of business activity, shopping and dining. It is home to two universities and boasts the second-densest office population in the region.

The border between the two counties is often used figuratively and literally to illustrate the differences between doing business in Philadelphia and doing business in the ’burbs. Sadly, Bala Cynwyd is often seen as the place just over the border to escape city taxes and regulations.

Each year, countless individuals open up businesses just outside Philadelphia due to the city’s Business Privilege Tax and other onerous fees and taxes. Its unusually high tax rates make it difficult for the city to compete with other jurisdictions in attracting and retaining businesses and residents.

Unfortunately, the numbers confirm what we suspect. According to the U.S. Bureau of Labor Statistics, the city continues to lose jobs. In 2010, Philadelphia had an average of 657,000 jobs. By August of this year, the number had declined to 647,000.

In an effort to turn the tide, Philadelphia City Council passed legislation last week to begin to reduce the financial burden on businesses trying to grow or start up. For years, the Greater Philadelphia Chamber of Commerce has worked hard to push for these much needed changes.

One bill, introduced by Councilwoman Maria Quinones Sanchez and Councilman Bill Green, is a BPT reform bill designed to provide significant tax relief for Philadelphia businesses — including start-up firms, which are an engine of job growth.

Another bill, introduced by Councilman Jim Kenney, seeks to eliminate, waive or reduce certain fees and permit charges on new businesses. The bill, known as “Jumpstart Philly Legislation,” is designed to entice businesses to locate here and to create new jobs for local residents. Specifically, the measure provides all new businesses with a two-year BPT exemption and a waiver on all business-related license fees for the first two years. It also eliminates the Business Privilege License Fee for all businesses beginning Jan. 1, 2014.

Together, these measures represent a significant step towards reducing the tax burden on existing and new businesses to promote growth and job development in Philadelphia.

With unemployment in Philadelphia hovering around 12 percent, the business community applauds the sponsors of these bills and Mayor Michael Nutter for recognizing that reducing taxes on new and small businesses will spur the economy and grow jobs.

– Rob Wondering is President and CEO of the Greater Philadelphia Chamber of Commerce. His column runs the second Wednesday each month.

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