The city of Philadelphia, owed nearly $70 million in unpaid business taxes since 2010, has launched a feasibility study to determine if it is worthwhile to sell some of the debt to a third party.
The study will focus on delinquent business income and receipts taxes and evaluate whether selling some of the debts is a better strategy than current tactics that Philadelphia's Revenue Department has in place to recoup the money. No debts will be sold to a third party during the study, said Mike Dunn, a spokesman for the city government.
Existing strategies include incurring penalties, referring accounts to collection agencies and revoking business licenses, according to the city.
The study will start once the city's Law Department determines whether the city would face any restrictions in selling the business tax debts. If cleared by the Law Department, the study will review operational needs to complete the debt sales, costs associated with any sales and potential revenue that could result.
Councilman at-Large Allan Domb said he expects a sale of business tax debts will prove to be an effective tool in keeping businesses compliant. Domb, who focused his election campaign and his first few months in office on finding efficiencies within government to help generate more funds for city coffers, joined Philadelphia Mayor Jim Kenney in announcing the study.