Tax showdown is off

Mayor Nutter and Council members Bill Green and Maria Quinones-Sanchez have agreed to take a breath and re-consider their differences in a heated battle over Philadelphia’s business tax structure. One thing both sides agree on is that small businesses should get the first $100,000 of their sales exempted from the city’s much-reviled gross receipts tax.

Green and Quinones-Sanchez have pushed hard for a bill that would eliminate the city’s tax on business profits and make up lost revenue by dramatically increasing the tax on business sales. They made a strong case in two days of hearings that the change would help Philly-based firms and encourage more manufacturing and knowledge-based businesses to stay here.

Nutter’s team argued that the change would mean big tax hikes for some major employers and a windfall of savings to big law firms.

A critical vote was expected on the proposal Wednesday, but the two sides have agreed to a truce, embodied in a letter to the Council members signed by Nutter’s chief of staff Clay Armbrister.

It says they agree on the $100,000 exemption from the receipts tax for city businesses, and they’ll gather more information on the other issues.

Green and Quinones-Sanchez, who probably didn’t have the votes to advance the bill, get credit for raising important issues. Nutter avoids a messy fight as he and Council members enter a re-election year.