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WeWork Philly Opens Wage Tax Loophole to Attract Tenants

A few weeks ago, we covered WeWork’s first “Future of Philly” event which covered Philadelphia’s tech scene. A big question was asked: has Philly’s tech scene reached its Tipping Point? The question stretches far beyond just the city’s tech scene.

Philadelphia’s weak job-creation has long haunted the City of Brotherly Love. But why is such a large city, located in a centralized market between Washington D.C. and New York City, unable to attract entrepreneurs from all over the country? Fingers point to Philly’s high business tax rates.

According to a PEW research report, Philadelphia’s tax structure has been a detriment to job-creation for decades. The report notes:

“Only 11 of the nation’s 30 largest cities impose levies on corporate profits or revenue, and only Philadelphia does so on both.”

A huge factor to the business hurting tax structure is the business income and receipts tax (BIRT), according to PEW. BIRT taxes profits and revenue of businesses located in the city. This includes those engaged in commercial or residential real estate rental activity

WeWork recently announced a plan to attract entrepreneurs to the city and filling available space in their four Philly locations. According to, the company, which is valued at over $16 billion, has introduced a one-year, shared tax subsidy deal for entrepreneurs and start-ups who choose to utilize its urban co-working space.

Dave McGlaughlin, WeWork’s general manager for all its locations in East Coast and Canada, hopes to start by attracting businesses operating in the suburbs first. He commented to

“Even if they are happy with their current operations in the suburbs, many businesses would like to stick a toe in the water of the city, maybe with a skeleton crew or test project, to heighten their visibility, build relationships, and attract talents who won’t go for a suburban commute.”

MacGlaughlin also noted that this will help attract businesses both big and small.

Mayor Kenney is just as eager to attract new businesses to Philadelphia. He has been known to fully support the city’s startup scene through various initiatives. These include creating resources for startups, tax incentives, and the StartupPHL which provides early stage investments to Philadelphia startups. Now, he’s pressuring Harrisuburg toward a constitutional amendment, known as Joint Resolution 2016-3, which aims to raise the cap on business property assessments. If passed, the bill would result in a lower city wage tax. If passed by the state House and Senate this Spring, it could potentially be up for public vote this Fall.

In the meantime, WeWork is committed to attracting new tenants by rebating $1,200, or half of the average city wage tax per worker, and apply it “as a prorated, monthly reduction on the client’s membership fees and space rental,” according to The credit, in addition to an equal share via partner employers, can then be used towards a salary increase.



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