I'm forming a single-member LLC in Philly for a small online retail thing. I know I need to register with the state, but does the city require a separate commercial activity license on top of that? The city website is a labyrinth. Any plain-English answer would be great.
Licensing
Does a Philadelphia LLC need a separate commercial activity license?
Yes, you need the Commercial Activity License (CAL) from the Department of Licenses and Inspections. It's separate from your state LLC registration. You apply online through the city's eCLIPSE system. I think it's around $50/year for most small businesses, but double-check because fees can vary. Also, if you're selling tangible goods, you might need a separate sales tax license from the state.
BrewerytownMike is right. And don't forget the Business Income & Receipts Tax (BIRT) and maybe the Net Profits Tax. The CAL is just the start.
Wait, do you actually need a CAL for an online-only business with no physical location in the city? I thought if you're operating from home and not seeing customers, you might be exempt. But I could be wrong.
PhillyDogDad, I believe you still need it if your business is based in Philadelphia, even if it's online. The CAL is required for any business entity operating in the city. But definitely call L&I to confirm. Their hold times are legendary though.
Calling L&I is a test of patience. I once waited 45 minutes Just to be told to check the website.
It's not just L&I. You also have to deal with the Department of Revenue for the BIRT. And if you're a single-member LLC, you might be taxed like a sole ptrop for city taxes. Fun stuff.
Thanks all. So it sounds like CAL is needed regardless. I'll bite the bullet and try eCLIPSE. If I don't come back, send help.
Let us know how it goes. I'm in the same boat, trying to figure out if my Etsy shop needs a CAL.
eCLIPSE isn't too bad once you get the hang of it. Just have your EIN and state registration handy.
Also, don't forget about the soda tax if you sell beverages. Kidding, but not really.