Philadelphia could restore a tax credit that had been available to businesses that made sustainability part of their missions.
The Sustainable Business Tax Credit had been a benefit for qualifying businesses for 14 years until it expired in 2023. It offered businesses up to $4,000 towards their Business Income and Receipts Tax. On Thursday, 3rd District Councilmember Jamie Gauthier introduced a bill that would bring the credit back, expanding the credit to $8,000 and making the program permanent.
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The city enacted the credit to assist Certified B companies – also known as B Corp businesses – and those that could demonstrate a commitment to sustainability. B Corp businesses must prove they meet standards of social and environmental responsibility and transparency in their day-to-day operations.
"Nothing is more make or break for the future of our city than climate change," Gauthier, a Democrat, said during Thursday's council meeting. "This legislative body must encourage our private sector partners to be part of the climate solution and reward, those who prioritize a triple bottom line of people, planet and profit."
The legislation states the council members who created the original tax credit thought B Corp businesses were desirable for Philadelphia because they tend to be locally owned, often by women or minorities, provide options for employee or cooperative ownership, offer health insurance and retirement benefits. They also are more likely to donate some profits to charity.
B Corp certifications are issued by B Lab, an organization that evaluates businesses based on their inclusivity, equitability and regenerative economy. Companies applying must demonstrate their involvement in social and the environmental causes, show a commitment to employees and stakeholders beyond their shareholders and have transparent business practices.
In Philadelphia, a business can apply even if it doesn't have the certification, which can be expensive, so long as they meet the city's criteria for sustainable companies. That includes providing proof it prioritizes employee interests, provides economic opportunities beyond jobs, protects the environment, improves human health or assists low-income or underserved individuals. Company owners also must be up to date on taxes.
Gauthier's bill does not cap the number of businesses that could receive the credit. If the legislation passes, applications would be submitted to the Department of Revenue instead of the Office of Sustainability, as they under the previous program, which Gauthier said would streamline the process.