How to invoice in Philadelphia

What the city adds to the state rules

A business that works in Philadelphia deals with three levels at once: Pennsylvania (home improvement registration, state sales tax), the City of Philadelphia (licences and local taxes), and the federal government. Invoices are where all three meet, because your customer sees the price, the tax and your numbers on one page.

Everything below is general information. Philadelphia’s rules and forms are on phila.gov, and the city’s tax and licensing offices are the place to confirm anything specific to your business.

The Commercial Activity License and BIRT

Most businesses that operate in the city need a Commercial Activity License (CAL) from the city, and file a Business Income and Receipts Tax (BIRT) return every year. BIRT is a city tax on gross receipts and on net income, so your invoices are the record the receipts side is built from. Keep every invoice, paid or not, and export them at year end.

The city ended its $100,000 exemption, so even small businesses now generally file. How much you owe depends on your receipts and income; confirm with the City of Philadelphia Department of Revenue.

Trade licences from Licenses and Inspections

The city’s Department of Licenses and Inspections (L&I) licenses contractors and issues the permits for building, electrical and plumbing work. Which licence you need depends on the trade and the job, and a permit number is often something a customer or building owner asks to see. If you hold a city licence number, add it to the invoice with the state registration number so the customer can find both.

In Paylark, the licence number is one optional field in Settings, with a label you can change, so write what the customer expects to see.

• Plumbing and electrical work in the city generally involves licensed trades and permits through L&I.
• Home improvement work for homeowners also needs the Pennsylvania registration number.
• Larger building jobs may involve permits that carry their own numbers.

Sales tax in the city

Philadelphia’s combined sales tax rate is 8 percent: the state’s 6 percent plus 2 percent for the city. That applies to taxable sales only; most services are generally not taxed in Pennsylvania, but some are, so check the Department of Revenue before adding a line. If you sell taxable goods or services, show the rate on its own line and keep the total clear.

Getting paid on city jobs

Plumbers, electricians and contractors working in rowhouses and apartment buildings often finish a job at the door. A plumber invoice with a payment link or QR code lets the customer pay before you leave. Look at pricing, or try the demo with no sign-up. This page is general information, not legal or tax advice.

Official sources

Check the rules with the people who write them:

• City of Philadelphia (licences, taxes, L&I): phila.gov
• Pennsylvania Department of Revenue: pa.gov/agencies/revenue

Rules change and this page is a starting point. Confirm with your state revenue department and licensing board before you rely on it. State rules: Pennsylvania.