Philadelphia Business License: Commercial Activity License, Tax ID and eCLIPSE

If you are starting a business in Philadelphia, the registration you will hear about most is the Commercial Activity License (CAL). The CAL sits on top of a city tax ID and a BIRT account, and depending on what you do, it may also involve zoning approval, a food license or trade licenses. Pennsylvania has no state general business license and no county business licenses, so the steps below come from the city and from state tax and filing systems. Work through them in order, because each one depends on the one before it. This is the practical path for anyone searching for a philly business license or learning how to start a business in Philadelphia.

What you need before you start

Gather these items first. Most delays come from a missing number or a name that does not match across systems.

• An EIN from the IRS, or a Social Security number. The CAL accepts either. The IRS issues EINs at no charge.
• Your legal business name and any trade name you will use. The names must match on your Philadelphia tax account and on your CAL.
• Proof that your entity is on file with the Pennsylvania Department of State. Search it at file.dos.pa.gov/search/business. An LLC name must include company, limited, or limited liability company, or an abbreviation of one of those terms.
• A fictitious name registration if you will trade under a name other than your legal name. It costs $70 and is filed statewide with the Department of State, not with the county.
• A Pennsylvania street address for your registered office. Pennsylvania does not use registered agents, and a post office box alone is not accepted. A business with no Pennsylvania address may instead contract with a Commercial Registered Office Provider (CROP) under 15 Pa.C.S. section 109.
• Your Philadelphia business address and a record of your city taxes, with all current filings and payments up to date.

Step 1: Get your EIN and confirm your entity is on file

If you do not already have an EIN, apply for one with the IRS. Then confirm that your entity appears as active in the Department of State business search. Corporations and LLCs file their formation documents through Business Filing Services at file.dos.pa.gov. Check the name on the record, because every later city application will be compared against it.

Step 2: Register with the state on myPATH

Pennsylvania retired the PA-100 in 2022. State tax and account registration now happens on myPATH, which you can reach from pa.gov/services/revenue/register-my-business-for-taxes. If your business will sell taxable goods or services, you will register for a Sales, Use and Hotel Occupancy Tax License there. This is a tax registration, not an activity permit. The Bureau of Corporations and Charitable Organizations states that it does not issue activity licenses.

Step 3: Open your Philadelphia tax ID and BIRT account

Philadelphia tax registration starts with a business tax account in the Philadelphia Tax Center. That account gives you your Philadelphia tax ID. Next, open a BIRT account for the Business Income and Receipts Tax. The BIRT account produces a BIRT ID, which both the CAL and the food license require. Finish this step before you apply for the CAL, because the application asks for the BIRT ID and checks your names against the tax account.

Step 4: Apply for the Commercial Activity License

The CAL is the license most people mean when they search for a Philadelphia business license. It is required for any person or entity doing business in Philadelphia, including outside firms that work in the city. The CAL was formerly called the Business Privilege License, so you may still see that name in older city materials.

The CAL is free. You can apply through eCLIPSE, the city's online licensing system, or in person at the Permit and License Center at 1401 JFK Blvd. Online, the license is issued automatically. Have these items ready:

• Your EIN or SSN
• Your BIRT ID
• Legal and trade names that match your Philadelphia tax account exactly
• Your city taxes, current

To use the eCLIPSE login, go to the City of Philadelphia's official website and sign in to the account you created for the business. Keep one account for your business so all of your city records stay together.

Two groups do not need a CAL. Owner-occupants who rent out 3 or fewer units, and nonprofit organizations, receive a free Activity License Number instead.

Step 5: Clear zoning and get a certificate of occupancy

Check zoning before you sign a lease or buy property. Philadelphia zoning decides which uses are allowed at a given address, and a license does not override zoning. Review the Philadelphia zoning code and zoning map for your address, and contact L&I if the result is unclear. A zoning and use registration permit confirms that your proposed use is allowed. A certificate of occupancy confirms that the space is approved for that use before you open. Confirm fees and processing times with L&I before you budget.

Step 6: Food businesses: Department of Public Health first, then L&I

Food businesses follow a two-agency sequence:

1. Submit your plans for review. The Philadelphia Department of Public Health (not the state Department of Agriculture) reviews them and issues a License Eligibility Report.
2. Apply to L&I for the food license. The application requires your CAL and your BIRT ID, so complete Steps 3 and 4 first.

The food license fees are $415 for food preparation and serving with 30 or more seats, $299 for smaller food preparation and serving operations, and $275 for caterers. The $20 application fee is credited toward the license fee. Confirm the current schedule with L&I before you pay. If you are looking for a Philadelphia food safety certificate, ask the Department of Public Health which food safety certification applies to your operation before you schedule plan review.

Step 7: Trade licenses for contractor, electrical and plumbing work

Contractor, electrical and plumbing work each require their own city trade licenses, separate from the CAL. Confirm with L&I which trade licenses your work requires. Home improvement contractors must also register with the Pennsylvania Attorney General, which is a separate state requirement.

Step 8: City taxes, including Wage Tax

Philadelphia is outside the Act 511 and Act 32 collection system, so the city Department of Revenue administers the Wage Tax and other city taxes directly. If you will have employees who work in the city, confirm your Wage Tax registration with the Department of Revenue. Your BIRT account and your Philadelphia tax account are the starting point for these city filings.

Step 9: Sales tax at 8 percent

Pennsylvania's state sales tax rate is 6%. Philadelphia adds 2%, for a combined 8% on taxable sales in the city. Register for your sales tax permit on myPATH as described in Step 2. Track sales tax separately in your bookkeeping from the first sale.

Common mistakes to avoid

• Mismatched names. A trade name on your CAL that does not match your tax account can stall the application.
• Skipping the CAL because you are an outside firm. The CAL applies to outside firms doing business in Philadelphia.
• Assuming an LLC must publish a notice. Pennsylvania has no publication requirement for LLCs.
• Looking for a state general business license or a county license. Pennsylvania has neither, so the city steps above are the ones that apply.
• Using a post office box as your registered office. Pennsylvania requires a street address or a CROP contract.
• Signing a lease before the zoning check. A license does not fix a use that zoning does not allow.
• Applying for the food license before you have a CAL and a BIRT ID, which L&I requires.

Practical tips

• Keep a single folder with your EIN letter, Department of State confirmation, BIRT ID and every confirmation page. Resubmitting a corrected application is faster when you have the originals.
• Call L&I about zoning before you sign a lease, not after.
• Confirm whether your business needs state tax registration and a city Wage Tax registration on the same day you set up your city accounts, so nothing is missed.

What to expect when you finish

If you complete these steps in order and your information matches across systems, you should generally end up with a Philadelphia tax account, a BIRT ID, a CAL or Activity License Number, and any state tax registrations your activity requires. Food businesses should be able to move to the food license once the Department of Public Health report and your CAL and BIRT ID are in place. Processing times vary and requirements can change, so verify each step on the official agency site before you act on it.

Official resources

• Pennsylvania Department of State business search and filing: file.dos.pa.gov
• Pennsylvania Department of Revenue: pa.gov/agencies/revenue
• Register for state tax accounts on myPATH: pa.gov/services/revenue/register-my-business-for-taxes
• Pennsylvania Small Business Development Centers: pasbdc.org
• SBA Philadelphia District Office: sba.gov/district/philadelphia

This guide is informational only and is not legal or tax advice. Licensing and tax rules change, and your situation may need a qualified professional. Talk with a Pennsylvania attorney or CPA before you sign a lease, hire employees or set up ownership, especially if your business involves food, construction or more than one owner.