BIRT AND NPT

[TK2005]

A person resides in Philadelphia but works as a truck driver and earns income outside of the city. He is on the road most of the time and may not be in Philadelphia for several weeks. He receives Form 1099-NEC, which is reported on Schedule C as business income.

I understand that income must be allocated on BIRT between Philadelphia and outside of Philadelphia, but how does this apply to the Philadelphia Net Profits Tax (NPT)? Should the net income also be allocated for NPT purposes?

Please help

[AmyC]

No. Here's the difference:

Because the BIRT is a tax on the privilege of doing business in Philadelphia, it only targets the portion of your business activity that actually occurs within city limits.

The NPT functions more like a local income tax. The residency rules for NPT are strict:

• For Residents: If you live in Philadelphia, the NPT applies to 100% of your net profits, regardless of where the work was performed. Whether you are driving in California or Maine, if your "home base" is Philadelphia, the city views that profit as taxable by the city.
• For Non-Residents: Allocation only applies to people who live outside the city but do some work inside the city. 

[TK2005]

Thank you very much for your clear respons.