During City Council’s fall legislative session, I will be prioritizing an amendment to the city’s 10 Year Tax Abatement. Council is appropriately debating whether the abatement still makes sense as currently configured, to cut the number of years or to eliminate it altogether. I want to amend it to correct a flaw.
Currently, the only disqualifying factor to get a 10-Year Property Tax abatement is being delinquent on property taxes. The problem is the law says nothing about disqualifying developers who cheat the city out of taxes and other revenue.
Philadelphia is a red-hot market for commercial and residential developers, many of whom are out-of-state. They often fail to pull necessary construction permits and licenses, misclassify workers as “1099 Independent Contractors” to avoid payroll taxes and pay workers in cash to avoid tax implications. These unethical practices cheat the city out of significant revenue and are tantamount to being tax delinquent. That should disqualify these developers from receiving a 10-Year Tax Abatement.
This amendment to the 10-Year Tax Abatement matters because the loopholes being exploited by many commercial and residential developers are costing the city millions in lost revenue. With so many crying budget needs for vital city programs and services, Philadelphia cannot afford to forego the collection of millions of dollars rightfully owed by commercial and residential developers.
Councilman Al Taubenberger (R At-Large)