Committee on Commerce and Economic Development, March 20, 2024

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 20, 2024 9:31 a.m. PRESENT: COUNCILMEMBER MARK SQUILLA, CHAIR COUNCILMEMBER JAMIE GAUTHIER COUNCILMEMBER KATHERINE GILMORE RICHARDSON COUNCILMEMBER CURTIS JONES, JR. COUNCILMEMBER RUE LANDAU COUNCILMEMBER JEFFERY YOUNG, JR. BILL 240019 - An ordinance adopting an Amendment to Section V of the Articles of Incorporation of the Philadelphia Authority for Industrial Development by increasing the Authority's term of existence... BILL 240087 - An ordinance amending Chapter 9-600 of The Philadelphia Code, entitled "Services and Other Businesses", by adding a new section regulating the operation of establishments providing tax preparation... - - 3/20/24 - COMMERCE - BILLS 240019 & 240087

Good morning, everyone. Today, March 20th, we are ready to start the Committee on Commerce and Economic Development. We welcome you to the hearing. I note that the hour has come. We now have a quorum. To my left, Councilmember Gilmore Richardson. To my right, Councilmember Young, Councilmember Jones. A quorum is present. The hearing is now called to order. This is a public hearing of the Committee of Commerce and Economic Development regarding Bills No. 240019 and 240087. Mr. McMonagle, can you please read the title of the bills.

Bill No. 240019, adopting an Amendment to Section V of the Articles of Incorporation of the Philadelphia Authority for Industrial Development by increasing the Authority's term of existence to a date fifty years from the date of approval of Articles of 3/20/24 - COMMERCE - BILLS 240019 & 240087 Amendment by the Secretary of the Commonwealth, under certain terms and conditions. Jodie Harris. (Witness approached witness table.)

For the record, before you start, Jodie, present is Councilmember Gauthier. Just state your name for the record and then proceed with your testimony.

Jodie Harris, President, PIDC. Good morning, Chairperson Squilla, Vice Chairperson Jones, and members of the Committee. My name is Jodie Harris and I am President of PIDC, the City's private-public economic development corporation. I'm here today to provide testimony in support of Bill 23 No. 240019. This bill would amend the Articles of Incorporation of the Philadelphia Authority for Industrial 3/20/24 - COMMERCE - BILLS 240019 & 240087 Development, also known as PAID, by increasing its term of existence to a date 50 years from the date of approval. By way of background, PAID is a public authority incorporated by the City of Philadelphia and organized under the Commonwealth's Economic Development Finance Act to undertake three main activities. First, PAID is a vehicle through which PIDC manages properties and industrial sites on behalf of the City, including property acquisition, improvement, environmental remediation and/or sale. Second, PAID also issues taxable and tax-exempt bonds on behalf of non-profit organizations, qualified manufacturers, other exempt organizations, and the City of Philadelphia pursuant to IRS and Commonwealth regulations. And, last, PAID serves as a conduit for City and other governmental 3/20/24 - COMMERCE - BILLS 240019 & 240087 contract and grant program funding for economic development projects throughout the City. In accordance with the Commonwealth's Economic Development Finance Law, economic development authorities can only exist for up to 50 years, and they are not permitted to enter into agreements with initial terms that extend beyond that. In order to accommodate requests for longer term agreements, it is critical to our operations that PAID's existence be extended to the full 50 years. PAID was initially incorporated by City Council in 1967 and, thus, its original term as authorized in 1967 would have expired in 2017. We have previously come before City Council twice over the last few decades to extend PAID's term of existence. Our current term expires on September 19th, 2061, providing less than 37 years of remaining term, which would be problematic for any transactions 3/20/24 - COMMERCE - BILLS 240019 & 240087 extending beyond this time. The proposed bill I'm here to testify in support of simply extends PAID's existence. This has previously been done with similar legislation, most recently in 2011 and 1991. In closing, extending PAID is important to Philadelphia's continued economic growth, and we thank you for your consideration of the legislation that does just that. I'd also like to take this opportunity to let all Councilmembers know that we very much look forward to meeting with you in the other Council session tomorrow for a briefing on the various ways PIDC supports the City's broader economic development efforts, and we hope to see you there. Thank you for inviting PIDC to testify today. I'm now happy to answer any questions the Committee may have. Thank you.

Thank 3/20/24 - COMMERCE - BILLS 240019 & 240087 you. Are there any questions from the Committee? Councilmember Jones.

First of all, thank you for PIDC and PAID's contribution to the skyline and neighborhoods of the City of Philadelphia. I will note that PIDC is not my grandfather's PIDC. It is more diverse. It is more inner city. It is representative of the demographics of the City of Philadelphia, to the degree that they can. This was evidenced during the pandemic when you, Commerce Department, and others stepped up to the plate to try to make sure that the economic character of the City of Philadelphia didn't go by the wayside of the pandemic. So thank you for that. I want to put you on the spot, because we met before. I've had the 3/20/24 - COMMERCE - BILLS 240019 & 240087 opportunity to serve on your Board. This 50-year extension, we can look back easily and see what you have meant to the City of Philadelphia. Give me -- and I know you're going to do it tomorrow -- give me a little bit of flavor for the record, how does PIDC play a role 50 years going forward?

Thank you for your question. Without having prepared an official answer to that question, because I think there's so much detail I could go into, I do believe that over the course of the next 50 years, PAID will continue to serve as a critical instrument for the City to move economic growth in terms of supporting large-scale projects, in terms of supporting projects that need to be in existence for up to 50 years that will provide some longevity and also contribute to the planning of the City. PIDC has a number of roles in the City, and one of them is managing the operations of PAID. In addition to that, 3/20/24 - COMMERCE - BILLS 240019 & 240087 we also provide financial services to small businesses and developers across the City. We provide technical assistance to small businesses and developers across the City, and we also work very closely with Commerce to move the City's economic agenda. So I think those three prongs all tied together relate to the ability to extend PAID for another 50 years, because in order to continue to do what we do, we need to have these proactive measures to ensure that there are no 15 issues that arise should the City want to undertake a long-scale development.

So that is indeed what I was hoping for, but I would encourage also for PIDC and its Board to play a greater role in advising this Council and also the Mayor's Administration. So what do I mean by that? In the past, Administrations have tended to think smaller than I believe they should. 3/20/24 - COMMERCE - BILLS 240019 & 240087 It was big-picture thinking to do the CAP over I-95. That was major visionary kind of expansion of what exists to make what is necessary. We have situations -- in my district, I have a, I think, 40-acre paper mill that was abandoned up in Manayunk and Roxborough. Advising us on how we can use that land better is what I'm hoping you'll provide us. You guys are deep thinkers and think in ten-year spurts, where we might think in four-year spurts. So that guidance we are seeking. Transportation on that paper mill, that kind of planning to say that to develop that plot would mean congestion in that neighborhood, here's how you build around that working with our partners in the county. Those are the kinds of things that we need, whether we should do a stadium on Market Street. We'd love to hear your opinion about those things guiding us. You will have your say, we will 3/20/24 - COMMERCE - BILLS 240019 & 240087 have our way, but we want to hear what you have to say. So that kind of advice is priceless, and we look forward to a partnership that allows us and you to feel free to come in these Chambers or come into our offices and say what you think. Thank you, Mr. Chair.

Thank you.

Thank you, Councilmember. Councilmember Gilmore Richardson.

Thank you so much, Mr. Chair. And thank you so much, Jodie, for your testimony. Welcome back to the great City of Philadelphia.

Thank you.

I know you've been here and back quite some time, but we truly appreciate your work, and I actually enjoyed listening to you on a panel recently. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I wanted to just quickly ask about PIDC's theory of change and the work that you all have done around strategic planning and particularly your thoughts around the future of work. I know that you all work particularly with small businesses and helping them with technical assistance, which we've heard from our diverse chambers is necessary in order to help those businesses scale and grow, but if you could talk specifically about what you all found and what you are planning for your future of work for the upcoming years for PIDC.

Great. Thanks, Councilmember. That's a really timely question. So our theory of change includes three lenses. It's racial equity, sustainability and resilience, and the future of work. We have embedded these three lenses in our lending practices in a number of ways. One is part through our technical assistance in terms of working 3/20/24 - COMMERCE - BILLS 240019 & 240087 with borrowers to make sure that we are being equitable in terms of how we distribute our funding, that we are contributing to projects that have a sustainability component in terms of ensuring that a community is sustainable, and then the future of work also looking at job creation and the quality of those jobs. So your timing of your question is great, because while we have set up our theory of change and we have these three lenses, we need to do a better job of measuring our progress. So we will be embarking in the next few months on an exercise to look at one of our key performance indicators and making sure that we have a baseline from which we can manage our growth and our project size, and in looking at that, creating a loop where we go back and say, okay, we didn't hit our targets or we didn't make as much progress as we thought, let's go back and recalibrate and see within those three 3/20/24 - COMMERCE - BILLS 240019 & 240087 lenses what else we need to do. So we have the three lenses and I think we have a strong foundation. We just need to build the performance indicators on top of those to make sure that we're continuing to do what we said we were going to do.

Well, that's great news, because my mentor used to say you can't manage what you don't measure. And so we really need to understand, particularly from a small business perspective, how we can better help small businesses so that they can scale and grow with all the projects that we know are coming to the City but particularly with our diverse small business owners. So I'm happy to hear that you all will work on additional ways to continue to measure the success of the outfit of the work happening at PIDC, and I look forward to continuing to work with you all. 3/20/24 - COMMERCE - BILLS 240019 & 240087 And the last thing that I would ask is if we could just get an up-to-date copy of your entire team, not only just your leadership team but all the employees, the demographics of everyone working at PIDC and the Board. Thank you, Mr. Chair.

Thank you. Councilmember Young.

Good morning, Ms. Harris. How you doing today?

Good morning.

Just a quick question regarding, I guess, the effect. So this amendment to your Articles -- the original one expired in 2017. How has or has there been any deficiencies in how you have been able to do your business from 2017 until now without this extension amendment? Can you just process what the difficulties have been? 3/20/24 - COMMERCE - BILLS 240019 & 240087

Yeah. So, Councilmember, this is a preventive measure. We haven't run into any roadblocks or hiccups without having the 50 years on the -- with the Authority. Right now we have about 37. So we just want to make sure that if something would arise where there's a long-scale project that would take us to pass that 37 years, that we have this in place. So just more of a preventive measure to make sure we don't run into roadblocks, but it hasn't prohibited any development so far.

That's an agency that's being proactive rather than reactive. I like that in government.

Exactly.

Thank you. Thank you. Are there any other questions? (No response.)

Seeing none, Jodie, thank you so much for your testimony. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Thank you.

Appreciate it. Is there anybody else to testify on Bill 240019? (No response.)

Seeing none, thank you so much. Mr. McMonagle, can you please call -- since there's no further questions of the members of the Committee and no other witnesses to testify, let's move to Bill No. 240087.

Bill No. 240087, amending Chapter 9-600 of The Philadelphia Code, entitled "Service and Other Businesses", by adding a new section regulating the operation of establishments providing tax preparation services and providing for remedies, all under certain terms and conditions. (Witness approached witness table.)

Thank 3/20/24 - COMMERCE - BILLS 240019 & 240087 you. Can you please call -- I'm sorry. Before we start, can I recognize Councilmember Landau for comments.

Thank you. Thank you so much. This is my bill 7 that I introduced, and thank you so much for holding this hearing, for everybody who came here today. I just wanted to say that this bill does simply two things. It mandates that commercial tax preparers must disclose their fees so consumers can decide whether or not to proceed with their tax filing, and it also mandates that the commercial tax preparers would provide consumers with notice that free services may be available for eligible low-income, elderly, and/or disabled consumers. So that way, if consumers choose not to proceed with the commercial tax preparers, they'll be informed of the wonderful free services we have available here in Philadelphia. The folks who are testifying 3/20/24 - COMMERCE - BILLS 240019 & 240087 today will give more details, but I just wanted to give that context. And thank you so much.

Thank you so much for your foresight and introduction of the bill. Right now we have Kathleen. Just state your name for the record and then proceed with your testimony. COMMISSIONER McCOLGAN: Good morning. My name is Kathleen McColgan, Revenue Commissioner for the Department of Revenue.

Please proceed. COMMISSIONER McCOLGAN: Good morning, Chair Squilla and members of Committee on Commerce and Economic Development. My name is Kathleen McColgan. I'm the Revenue Commissioner and Chief Collections Officer at the Department of Revenue, and I am here today to testify in support of Bill No. 25 240087. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Bill No. 240087 amends Chapter 3 9-600 of The Philadelphia Code and requires tax preparation service providers to do the following: One, provide a document showing no cost tax preparation services provided to the City, Commonwealth, federal government, registered non-profit organizations, and legal aid services. The Department of Revenue will provide this document on a publicly available web page on the Department of Revenue's website. Two, receive a signed acknowledgment from the consumer that the consumer has received the document outlining the availability of no cost tax preparation services. And, three, provide the taxpayer a detailed explanation of the cost of services. This bill provides consumer protections to vulnerable taxpayers from predatory practices that obscure the cost 3/20/24 - COMMERCE - BILLS 240019 & 240087 of tax services that can be obtained for free. The Administration supports Bill 4 No. 240087 to ensure that taxpayers can file and pay their local, state, and federal taxes without incurring unnecessary additional costs to do so. The Administration supports any efforts that connect taxpayers with no 10 cost tax preparation services and make it easier to file and pay taxes. While we have some operational concerns, we look forward to working with City Council to ensure Philadelphia taxpayers have awareness of no cost tax preparation services and can make informed consumer decisions. Thank you for the opportunity to testify. I'm happy to answer any questions that you have.

Councilmember Gilmore Richardson.

Thank you so much, Commissioner McColgan. Thank you very much for your testimony. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I'm just seeing here that you're stating you have some operational concerns. Have you shared those concerns with the sponsor? COMMISSIONER McCOLGAN: I think the concerns are really just related to understanding how any amendments to the bill, the final language that's in it, if and when passed, and at that point, we will work to implement the requirements of the bill.

Okay. I'm only asking because I know that when we did the information sheet with the tangled title legislation, we had worked with Records and CAO to develop the sheet, and we met with all the external stakeholders to ensure all the appropriate information was included in the sheet and we sort of worked together. So you all will be able to help develop and work with the sponsor on the information sheet, make it available to 3/20/24 - COMMERCE - BILLS 240019 & 240087 the tax preparers. And then, lastly, this was something that we always talked about in Council, the education that's so important, the education for the broader community. How do you all plan to educate the broader community about this sheet? COMMISSIONER McCOLGAN: Yes. The Administration is happy to work with Council to implement this bill. In the Department of Revenue, we have an excellent communications team, so we will work to make sure that we have plain language in place to help folks understand the resources that are available to them and put that on our website. We also do extensive outreach in communities, so we can be happy -- I mean, we will be happy to provide that information to communities as well, and then I think there's other City agencies that we can potentially partner with to get that information out. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Okay. That's great. I just wanted to ensure that I had an understanding of sort of the consternation that was mentioned. Thank you very much. COMMISSIONER McCOLGAN: Thank you.

Councilmember Gauthier.

Good morning, Commissioner. COMMISSIONER McCOLGAN: Good morning, Councilwoman.

Thank you for your testimony. Can you talk to us about how many eligible residents are taking advantage of the City's free tax preparation services on an annual basis and can you also talk about how that number compares to how many could take advantage of the service if they knew about it? 3/20/24 - COMMERCE - BILLS 240019 & 240087 COMMISSIONER McCOLGAN: Thank you for the question. I don't have that information with me right now, but I'll be happy to look into it and get back to you.

Thank you. That would be very helpful.

Thank you. One last question too then I guess is, how would the Administration be able to enforce the legislation? COMMISSIONER McCOLGAN: I think that that is -- once we have the final language of the bill when passed, that's something that we'll need to talk through and work with Council to understand how we can implement compliance. So I understand that this wouldn't be effective until the fall, so we have some time to do that.

All right. Thank you very much. Councilmember Young. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Thank you. So if this bill were to pass as is, are you able to work with, I guess, your staff and Council to implement this as is if it were to pass today? COMMISSIONER McCOLGAN: Yes. As I mentioned, we can go ahead and publicize the information that's required. I think what we need to just talk through and understand better is the compliance component.

Thank you.

Thank you so much. Any other questions? (No response.)

Okay. COMMISSIONER McCOLGAN: Thank you.

Kathleen McColgan, thank you so much for your testimony, much appreciated. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I'll now call the next panel. Christine Speidel, Dr. Nikia Owens, and Will Gonzalez, if you want to come up. (Witnesses approached witness table.)

Christine, if you want to just go first. Just state your name for the record and then proceed with your testimony.

Thank you. Good morning. My name is Christine Speidel. I'm an Associate Professor at the Villanova University Charles Widger School of Law and I direct the Federal Tax Clinic. The Federal Tax Clinic provides free legal services to people in disputes with the IRS. We serve low-income taxpayers from throughout Eastern Pennsylvania through representation, education to community groups, and advocacy. Many low-income people pay hundreds of dollars each year for tax 3/20/24 - COMMERCE - BILLS 240019 & 240087 preparation despite being eligible for free help. I see this locally in our clinic, but it's a national problem. In my testimony I cited some federal research indicating that perhaps three percent nationally of eligible taxpayers take advantage of these free services. Ensuring that people know about free tax preparation is especially important in communities where lots of lower income people live, like Philadelphia, and this is because tax refunds are the single largest source of economic support for low-income children and low-income families. Programs like the Child Tax Credit and the Earned Income Tax Credit are crucial anti-poverty programs, and unnecessary tax preparation costs drain funds from families that really need them. In particular, families earning roughly 15,000 to 40,000 a year are the main beneficiaries of these credits. 3/20/24 - COMMERCE - BILLS 240019 & 240087 These are families for whom every dollar counts, yet they're routinely charged $200 to $300 or more for a simple tax return that could have been prepared for free at a volunteer tax site. The complexity of the Internal Revenue Code and the realities of poverty can push people to pay tax preparers who promise quick cash. The bill's requirement to disclose costs up front should help level the playing field between responsible tax preparation businesses that provide an important community service and fly-by-night, tax-season-only shops that open up seasonally to drain refunds from families in poverty. Low-income people are especially vulnerable to being overcharged by these fly-by-night tax preparation companies, because they usually pay the tax preparer out of their refund. In egregious cases, the taxpayer is just told the amount of the refund and 3/20/24 - COMMERCE - BILLS 240019 & 240087 nothing else. In others the junk fees are disguised through confusing schedules. But too many people don't know their options at tax time and don't understand what they're being charged. Preparer fees and related charges are siphoning off important anti-poverty credits that families need. Thank you for your time.

Thank you so much for your testimony. Dr. Nikia Owens.

Good morning, honorable members of Philadelphia City Council. Today I give testimony and advocate for Councilmember Rue Landau's tax preparation transparency bill and the free tax preparation services at Campaign for Working Families for our City's residents. The service of free tax filing is not just a matter of convenience but a critical lifeline for many, especially considering Philadelphia's poverty rate 3/20/24 - COMMERCE - BILLS 240019 & 240087 and the disproportionate impact on our Black and brown communities. Philadelphia's economic landscape presents significant challenges. The poverty rate stands at approximately percent with stark 8 racial disparities. The Black 9 communities, which comprises slightly 10 over 40 percent of the City's population, 11 faces the highest asset poverty rate at 12 about 42 percent and liquid asset poverty 13 rate of about 53 percent, along with a 14 median household income of just over 15 $39,000. These figures underscore the 16 critical need for financial transparency 17 and support mechanisms like Councilmember 18 Rue Landau's bill and the Earned Income 19 Tax Credit. 20 Alarmingly, about 50,000 21 Philadelphians fail to claim their Earned 22 Income Tax Credit annually, leaving over 23 $100 million unclaimed every year. This oversight means that only 77 percent of eligible Philadelphians, which out of 3/20/24 - COMMERCE - BILLS 240019 & 240087 about 240,000 Philadelphians who are eligible, benefit from this crucial financial boost. The EITC is especially significant for families with parents with one child eligible for up to 42 -- just over $4,200. Those with two children can receive up to $6,960, and those with three or more children could receive up to $7,830. These amendments can be transformative, providing essential financial relief even for parents who did not earn a lot of money throughout the year. It is imperative we encourage all eligible Philadelphians to file their taxes to claim the Earned Income Tax Credit, ensuring they do not leave these vital supports unclaimed each year. The significance of $300 or $400 saved in tax preparation fees cannot be overstated. For many families, this sum represents a month's worth of groceries, utility bills or emergency 3/20/24 - COMMERCE - BILLS 240019 & 240087 savings to prevent a financial crisis. We know that individuals will fall back in poverty within a year even if they rise out of it over a $400 expense. Considering the potential of investing in a 529 college savings fund, these dollars, if invested in a 529 college fund over a 15-year period with an average return rate of seven percent, this investment could actually pay for the entire cost of a child's post-secondary education. Furthermore, the necessity for transparency in tax preparation fees is critical. Families often find themselves blind-sided by high service charges, exacerbating their financial strain. The practice of revealing fees only after services are rendered is just not fair. It is predatory, depriving families of the ability to make informed financial decisions. The gig economy characterized by companies like Uber, Lyft, Instacart, 3/20/24 - COMMERCE - BILLS 240019 & 240087 DoorDash presents unique tax challenges. Gig workers, a growing segment of our workforce, navigate complex tax situations without the assurance of transparent and affordable tax advice. Free tax services like those offered by Campaign for Working Families are necessary for these workers to meet their obligations without undue financial burden. Today, Campaign for Working Families is proud to highlight the personal story of one of its student interns, who is here to provide a story of their tax filing at one of the paid preparers. We have Andy Tran. (Witness approached witness table.)

Thank you for your testimony. Mr. Gonzalez. Councilmember Landau.

Chairman, the Campaign for Working 3/20/24 - COMMERCE - BILLS 240019 & 240087 Families was calling up an intern of theirs who went out and did some secret shopping and wanted that person to testify next, but --

Just state your name for the record. You want to testify?

Yes. My name is Andy Tran.

Please proceed.

So last year has been pretty busy. I got married in Vietnam and -- sorry. So I got married in Vietnam. I came over, was working, was changing careers into accounting, did Uber and Lyft just to provide for my family. Had a child in July and finally enrolled into Community College trying to better myself, but in the end, I was met with a ridiculous tax -- a ridiculous invoice from Liberty Tax. So as I was going into the 3/20/24 - COMMERCE - BILLS 240019 & 240087 office of Liberty Tax and essentially giving out so much of my personal information and getting help, every single point was essentially met with charges, hundreds and hundreds of dollars, where each gig that I ran, so it would be Uber and Lyft, would cost me about $300 just to file the tax forms for each one of them. And just for the federal return, it was another 300. For the state return, it was another hundred. It amounted to almost a thousand dollars of charges, and my refund wasn't even significant. It was only 700. So just to file with Liberty Tax, it would have cost me more than I would have gotten, and I could not afford that at all. And towards the end, all they really said was, well, you can try to file it on your own. So I was left in the dust to try to figure out how to just file my tax like every American is supposed to. So, yeah.

Well, 3/20/24 - COMMERCE - BILLS 240019 & 240087 hopefully now that you know that there's available tax services for you.

Yes.

So I just wanted to finish by saying notwithstanding last tax season, Campaign for Working Families served over 22,000 unique individuals, filed over 40,000 tax returns, returning over 32 million to hard-working individuals and families, which saved them over about $7 million in tax preparation fees. So the provision of free tax preparation services by the Campaign for Working Families is not just a matter of financial relief, but a foundational support for economic justice and equity in Philadelphia by empowering our residents to confidently navigate tax obligations and maximize the Earned Income Tax Credit. I urge the Philadelphia Council to recognize the importance of these services and support policies that ensure 3/20/24 - COMMERCE - BILLS 240019 & 240087 transparency in tax preparation fees and foster the expansion of free tax assistance programs. Together, we can make a tangible difference in the lives of Philadelphians, promoting financial stability and opening doors to future opportunities. I thank you for your attention and your commitment to the welfare of all Philadelphians. Thank you.

Thank you. Councilmember Jones.

First and foremost, let me thank you and the efforts of the Campaign in particular in my district. You for a long time were in the Parkside community. At first I confused you with another Working Families group. After investigation of who was renting space in my district, found out it was you. And it was so rewarding to hear satisfied customers say to me that you saved them money. You got 3/20/24 - COMMERCE - BILLS 240019 & 240087 them a refund. Before there was a stimulus package, before there were PPEs, there was tax return refunds, and you could hear people in the community say, you know what, if you wait a minute, when I get my tax refund, I'm going to catch up on that rent or I'm going to buy that car. And my point is that those refunds are the gift that keep on giving to small businesses in our community to buy that extra bag of groceries. And so it means so much to the people who need it most. So kudos to the author of this legislation for having the insight to actually hit it where it counts, which is at the dinner table, pocketbook, things for working families that matter so much. The only other thing that I would say is, the information that you garner on tax returns, do you parlay that to show clients what else they're 3/20/24 - COMMERCE - BILLS 240019 & 240087 eligible for?

Absolutely. So each client during the intake process can note that they want to receive additional information or services if they qualify for unemployment compensation that -- we get funding from the Department of Labor and Industry for that, and then connection to critical resources and benefits. We also offer that. And we have partnerships with banking institutions if they're unbanked to get them banked. And so there's no criteria for that. Even if you had a previous bad experience, we still can get them connected. So, absolutely, we definitely have wraparound services for all of the individuals that we serve.

Well, thank you again. Thank you, Mr. Chairman.

Thank you, Councilmember. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Councilmember Gauthier.

Good morning.

Good morning.

Thank you so much for your work and your testimony and just all of the advocacy that you're doing to let Philadelphians know what they are entitled to and the advocacy that you're doing around making sure that they get every dollar they're entitled to. I think one of the most striking things that I heard when we were talking about this bill last week was the story of a mom who was billed out of her tax return, but was counting on that money to take care of her son who has cancer. So when we're talking about the cash that families need, it's real. It's their healthcare costs, it's their rent, it's food. It's real. I was wondering if you could talk a little bit more, if you're able 3/20/24 - COMMERCE - BILLS 240019 & 240087 to, about the type of companies that we're most trying to impact with this bill. Who are sort of the most prolific offenders of this type of predatory behavior and can you tell us a little bit more about the companies we're trying to impact here.

Absolutely. So a larger number, Liberty Tax, H&R Block, Jackson Hewitt, we had a number of secret shoppers like Andy Tran that went out to file a tax return with them. And I can't tell you when they came back to us after kind of doing the secret shopper, you know, situation or event that, for example, with Andy Tran, it was $998 for two 99's, and that comes with like the DoorDash and the Uber or what-have-you. So there are definitely offenders, and you know that when you go to any one of them, less than $13 actually stays in the community that gets spent there. So H&R Block was a serious 3/20/24 - COMMERCE - BILLS 240019 & 240087 offender as well. One of the mothers who had two children, she worked two jobs. She had two W-2's, and she went in, and she didn't make that much money because even with two children, you could get up to $6,960. So just the fact that she got 2,000 -- she was going to get back $2,666. They charged her almost $400 to do her tax return. The same was between Liberty and H&R Block, except for the difference was when she went to Liberty Tax, she was going to get somehow $600 more than she would have gotten at H&R Block. So it was a stark difference. So between a number of those obviously bigger tax preparers that many of our Philadelphia communities from Black and brown communities go to, there are serious offenders. Even one single person that went to -- they were getting back $259 and they charged them $190. They walked out of there with $69.

Thank 3/20/24 - COMMERCE - BILLS 240019 & 240087 you so much. And, Mr. Tran, thank you so much for sharing your experience. I'm sorry that happened to you. Thank you, Mr. Chair.

Thank you. Are there any other questions? (No response.)

Mr. Gonzalez --

Thank you.

-- please come to the table. (Witness approached witness table.)

Just state your name for the record and then proceed with your testimony.

Buenos dias. Thank you for the opportunity to testify today on Bill 240087. My name is Will Gonzalez. I'm the Executive Director of Ceiba. Ceiba is a coalition-building 3/20/24 - COMMERCE - BILLS 240019 & 240087 organization in the Latino community of Philadelphia. We are the backbone to the Ceiba-Latino Equitable Development Collective. Ceiba operates the longest-serving volunteer income tax assistance, VITA, site in the Latino community of Philadelphia. We applaud your efforts to enact Bill 240087 to protect Philadelphia consumers, especially low-income taxpayers, targeted by many of the private tax preparers to extract fees from their clients' refunds and to collect their taxpayer data. In many cases, the bright lights and promises of private tax preparers blind people to bypass the information about the fees that they are being charged. This happens often because the fees are not revealed up front, and the clients have a false sense of being able to afford the fees because they are expecting a large refund. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Many families are seeing their refunds, their Earned Income Tax Credit, their Child Tax Credit, reduced by an average of to percent due to the 6 cost of private tax preparers. Bait and 7 switch is not a trick limited to used car 8 salesmen. 9 This problem of cost and 10 related junk fees is exacerbated by the 11 costs of refund anticipation loans. In 12 other words, at a cost, people can get 13 their reduced refunds quicker than the 10 14 to 14 days promised by the IRS. This 15 gives some tax preparers the opportunity to extract additional fees and to charge high interest rates for short-term guaranteed loans. The bill you are supporting -- I'm sorry; the bill we're considering today and which I hope you support gives consumers transparency. It allows people to determine the cost of the private tax preparation at the beginning of the conversation, not after time has been 3/20/24 - COMMERCE - BILLS 240019 & 240087 spent at an office sharing a year's worth of a household's private financial information. The bill also empowers consumers by giving them a right of action to go after unscrupulous private tax preparers. This is important as enforcement is in the hands of the aggrieved party. Beware of the wrath of an aggrieved consumer. The bill also offers Philadelphia additional power over private tax preparers by giving the consumer information about the availability of free tax preparation services in their neighborhoods. Philadelphia has a rich ecosystem of free tax preparation services. We need to do everything in our power to help people connect to this great resource. In most cases, those VITA sites, like Ceiba and the Campaign for Working Families, connect those clients with asset-building programs, social 3/20/24 - COMMERCE - BILLS 240019 & 240087 services, income supports, housing counseling, and utility assistance. With the consent of the clients, we use tax preparation as a gateway to asset building. So instead of extracting money from their refund, we are adding financial strength to every household we serve. That is our mission. We're not accountants. We're not tax nerds. We use this as a gateway to asset building and as a way to preserve money in Philadelphia. Most of the private tax preparers are from outside the state, and their fees end up outside of the City. Protecting people from predatory tax preparers is also important for people who are limited English proficient. Immigrants new to American financial systems and the English language are easier prey for the unscrupulous preparers. In the Latino community we call the practice of predators who rip off immigrants in 3/20/24 - COMMERCE - BILLS 240019 & 240087 financial transactions Notario Fraud. Notarios present their offices as one-stop shops for various services. One of the services that you often see advertised by Notarios is tax preparation. It is a natural extension of the scheme to defraud immigrants.

It is important for immigrants to be current with their taxes. S. Citizenship and Immigration Services. In the application for naturalization, it specifically asks, have you ever not filed a federal, state, or local tax return since you became a permanent resident. It is important for immigrants that their tax returns are filled out correctly. Tax returns reflect the makeup of a household, the marital status of tax filers, the family income sources, and a person's honesty in claiming certain tax credits. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Immigrants sometimes go to Notarios even when they know that they cannot receive immigration relief. Everyone has a duty to file a tax return, even unauthorized immigrants. In general terms, the IRS declares that anyone with $4,000 worth of income file a tax return. The IRS created a number, the Individual Tax Identification, also known as the ITIN, so that unauthorized immigrants without Social Security numbers can file a tax return. Ceiba specializes in helping unauthorized immigrants file their tax returns. We are blessed that Philadelphia, the Department of Commerce recognizes the ITIN as a tax ID number to help those unauthorized immigrants open businesses. We also are blessed in Philadelphia to have a community development financial institution called Community First Fund that helps people with ITINs secure mortgages, business loans, and personal loans. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Some people say that clients should know better and that they may be accessories to the shoddy tax return preparation by Notarios and the excessive fees charged by some private tax preparers. This is an easy characterization. It ignores the complexities of the tax laws and regulations and how intimidating it is for the average person to prepare a tax return. It also ignores the professional responsibilities that paid preparers should have. In Pennsylvania, in Philadelphia, barbers are more regulated than tax preparers. To be a barber, you need to secure a special license. That is not the case to be a private tax preparer. In many cases, taxpayers don't know that the Notario prepared their tax return incorrectly or that a paid preparer did something wrong. With a barber, at least you can easily tell a bad haircut. 3/20/24 - COMMERCE - BILLS 240019 & 240087 What makes it even worse is that when you get a shoddy prepared tax return, by the time you find out about it, the Notario, the private tax preparer, may have already closed its shop. And worse, you face serious fines and fees from the IRS. I want to end my testimony with a respectful request. Further protect consumers by adding into the legislation protections against the improper sharing of taxpayer data. I highlight for you a report prepared by some members of Congress. This 2023 report found that major tax preparation companies were sharing sensitive tax data with big tax firms like Meta and Google. This included sharing extraordinarily sensitive personal and financial information with Meta, which was used for diverse advertising purposes. It also found that big tech firms were reckless in their data-sharing practices and their treatment of sensitive taxpayer data. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I provided a link to that report. I also want to highlight a comment by the consumer -- to the Consumer Financial Protection Bureau by the Center for Taxpayer Rights, which calls additional attention to the misuse of taxpayer data by refund transfer products when client data is shared with financial institutions to connect with those products. The Center for Taxpayer Rights highlighted how we cannot overlook the dangers of some private preparers sharing their client's data. " Their comments show how some refund anticipation loan providers trick consumers into forfeiting their federal 3/20/24 - COMMERCE - BILLS 240019 & 240087 protection over their data. I also provided a link to that comment.

We need Bill 240087 to warn consumers about the dangers posed by private tax preparers in the realm of the sharing of financial and personal data. We applaud your efforts to protect Philadelphians and to help families keep more of their hard-earned money. Thank you very much for your attention to this matter. Please feel free to contact us if we could be of further assistance, and we'd be happy to help the Department of Revenue with any of the implementation needs. Muchas gracias.

Thank you. Thank you, Will. Councilmember Gauthier.

Thank you, Mr. Chair. Good morning, Mr. Gonzalez. Thank you for your testimony and for your 3/20/24 - COMMERCE - BILLS 240019 & 240087 work. I wanted to know, do you have a sense of how many people you're serving annually versus the amount of people that you could serve but aren't because they're going to the Notario? And then, secondly, what would it mean for your community to have people have free tax preparation that they're entitled to, that's prepared accurately, that gives them more money in their pocket and keeps more of that money in the local community?

Thank you for the question. Thanks to the leadership of City Council, Ceiba has been able to expand its activities around free tax preparation. We have HACE and Congreso also doing them. That's thanks to your funding of the Poverty Action Fund and The Promise. And we also -- it also has allowed Ceiba to operate seven days a week. And so, yes, we would love to 3/20/24 - COMMERCE - BILLS 240019 & 240087 see more clients. And obviously with the Campaign for Working Families and some of the other members of The Promise and the Poverty Action Fund, we can develop that capacity to serve them.

Awesome. And then what do you think it would mean for your community to have more of this funding in people's hands, in their homes, and in the local community?

Well, we've seen situations where we've literally taken people who -- including unauthorized immigrants who come in, file their tax return. As you know, due diligence requires any financial institution that lends money to see three years of tax returns. And so also to be able to keep the $500, $600, $700 that instead of paying to a preparer, to keep it in their pocket, could use that to help fix their credit, to put them in a better position 3/20/24 - COMMERCE - BILLS 240019 & 240087 for a down payment for a home. So it means a lot. Now, we have to compete with Super Bowl ads that talk about, you know, getting your refund and cash immediately, but, you know, I don't think -- I mean, yeah, sometimes it is a hardship for somebody to wait ten days to get their refund. So those are some of the challenges. I mean, some cities and some VITA sites have worked with some CDFIs, Community Development Financial Institutions, to create their own fast refund fund, but I think it's a matter of reinforcing the need to access those good quality free products. Like I mentioned before, barbers are more regulated than tax preparers. VITA sites are required to take certifications by the IRS. We get monitored by the IRS. We get audited by the IRS. So we're very regulated. We're very successful at what we do. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Having more capacity with more demand would help serve the community better and help Philadelphia keep some of that money.

Thank you. Thank you, Mr. Chair.

Councilmember Young.

Thank you. Mr. Gonzalez, do you know how many of these, what you call, Notarios are either enrolled agents with the IRS, certified public accountants or attorneys?

No. And so what happens, they play on a term of a literal translation of the word "notary" into Spanish. So to be a Notario in some Central and South American countries, not only do you have to be an attorney but you have to be like extra and to have additional power. So they just take the 3/20/24 - COMMERCE - BILLS 240019 & 240087 word "notary," translate it into Notario and then people look at it. So we have some challenges and, again, City Council has played a leadership role on this. A while back they passed some laws regulating some of the Notarios, but at the same time, they pop up. I mean, you know. You guys are in your districts. Not only the Notarios but the private tax preparers. You'll see, they'll put up a shingle, they'll put up a storefront end of December and by the end of April, they're gone. You know, some of the more national chains will retain some presence, but even they put up pop-up places and leave. So the Notarios come and go. And then there's also the informal economy where somebody's neighbor is on the side doing these things. I think this legislation will help address some of that too, because it gives a right of action for people to report some of these 3/20/24 - COMMERCE - BILLS 240019 & 240087 things.

Thank you.

Thank you.

Thank you.

Seeing no other questions, we'll call up the next panel. Panel 3, Sherlyn Martinez, Lazlo Beh, and Laura Smith. (Witnesses approached witness table.)

Sherlyn, if you want to start first. Just state your name for the record and then begin with your testimony.

Can you hear me?

Try it again.

Can you hear me now?

Yes.

Hi. My name is 3/20/24 - COMMERCE - BILLS 240019 & 240087 Sherlyn Martinez. I'm the Assistant Director of Temple's Low-Income Taxpayer Clinic. So every year we represent dozens of low-income taxpayers who have disputes with the IRS. In many of these cases, the tax controversies arise because of unscrupulous paid tax preparers. Frustratingly, the lack of federal tax regulation of paid tax preparers means that taxpayers are often without recourse to address problems that arise from these preparers. At the same time, so many taxpayers are unfortunately unaware of free tax preparation services staffed by IRS-certified volunteers. As such, too many taxpayers often see portions of their refunds withheld, for outrageous fees, by some paid preparers or fall victim to egregious errors on these returns. At worst, we have seen intentional tax preparer misconduct that has included stolen refunds and identity theft, and 3/20/24 - COMMERCE - BILLS 240019 & 240087 these cases can take years to resolve with the IRS. Therefore, it is vital that low-income taxpayers know about and avail themselves of the benefits of free voluntary income taxpayer assistance, VITA, sites. Right here in the Philadelphia region, we have many such programs, including Temple University and Campaign for Working Families and Ceiba. Overall, VITA sites have much, much lower rates of error, with a 94 percent return accuracy rate. The volunteers who work at these sites must take IRS-created tests to qualify for certifications before they work on returns. Every year we tell clients about these services, and every year some of these clients say that they had never heard of these programs. It is heartening when they tell us then that they went to these sites and got their returns done and that they even told their families and friends who then went 3/20/24 - COMMERCE - BILLS 240019 & 240087 to use the VITA services as well. Here in Philadelphia alone, there is so much money left on the table in terms of unclaimed refundable credits, like the Earned Income Tax Credit and the Child Tax Credit, that certain paid preparers sometimes miss or that they wrongly claim with incorrect documentation. When these preparers make such errors, it is costly for our clients. When you have such high poverty here in the City and such significant benefits within the tax code to help reduce poverty, it is imperative that taxpayers be aware of free, reliable, safe, and secure programs that are easily accessible and do not prey on them. At their core, these VITA sites are about just that, establishing financial security for taxpayers who rely on these refunds every year as part of their annual household budgets. Every dollar that taxpayers save to provide for 3/20/24 - COMMERCE - BILLS 240019 & 240087 themselves and their family is a dollar invested in our community. Thank you for your time.

Thank you. Thank you for your testimony. Lazlo.

Yes. Hello. Thank you, Councilmembers. Thank you to this Committee. My name is Lazlo Beh. I am a Supervising Attorney at Philadelphia Legal Assistance in our Taxpayer Support Clinic. Philadelphia Legal Assistance supports the passage of Bill No. 240087. Philadelphia Legal Assistance, otherwise known as PLA, has been in operation since 1996 and is one of the largest non-profit organizations in Philadelphia dedicated to providing free legal assistance to low-income Philadelphians. For more than ten years, PLA has run a Low-Income Taxpayer Clinic through which it has offered legal assistance to low-income taxpayers who 3/20/24 - COMMERCE - BILLS 240019 & 240087 have disputes with the IRS regarding their tax returns. Low-Income Taxpayer Clinics, otherwise known as LITCs, are congressionally established programs that are overseen by and funded in part through matching grants issued by the IRS's Taxpayer Advocate Service. Within the last few years, the IRS has begun funding a second LITC in Philadelphia at Temple University's law school. There's also a longstanding LITC just outside of Philadelphia that is run by Villanova's law school, as you heard from Christine earlier. There are several other LITCs in Pennsylvania and throughout the United States. There are over 130 Low-Income Taxpayer Clinics. PLA's LITC, known as the Taxpayer Support Clinic, does not routinely prepare tax returns and we do not hold ourselves out as tax preparers. In fact, the terms of the LITC grant prohibit us and the other LITCs from advertising tax return preparation as 3/20/24 - COMMERCE - BILLS 240019 & 240087 services we provide. In other words, we're not in competition with paid tax preparers. In essence, the LITC program is different than the volunteer income tax assistance, the VITA, sites that the IRS also oversees and partially funds and which provide free tax preparation to individuals and families making under $64,000 per year. We speak today in support of this bill from our perspective of having seen some of the outrageous prices charged by paid tax preparers in Philadelphia whose tax preparation has nonetheless oftentimes caused the problems with the IRS that lead our clients to come to us for help, and as Sherlyn said, fixing those problems can take years. We do not learn in every case how much our clients were charged, but in some cases we do, and it is both enraging and disheartening that there are business 3/20/24 - COMMERCE - BILLS 240019 & 240087 people who are not ashamed to be charging these fees. By way of examples, we have seen clients who have been charged such unconscionable tax preparation fees as $800 for a taxpayer with four children and total income less than $40,000, $680 for a taxpayer with one child and total income less than $24,000, $490 for a taxpayer with two children and total income less than $15,000. These fees do not include additional charges such as for software usage and banking products that can add well over $100 to the total to the taxpayer. And these cannot be isolated cases, because they are being charged by established tax preparation companies in Philadelphia. Incidentally, the IRS bars tax practitioners from charging unconscionable fees to represent taxpayers before the IRS, but tax preparers are not governed by the IRS because tax preparation has been 3/20/24 - COMMERCE - BILLS 240019 & 240087 determined not to count as representation before the IRS. It should be noted that the tax returns prepared in these examples could not or should not have taken the preparer more than one hour of time maximum. Remember, these tax preparers themselves are using software that does most of the work of preparing the tax return. What other industries are you aware of that charge poor people and low- to mid-income folks over $500 an hour? These fees are simply unjustifiable.

The reason that low-income people are able to pay these outrageous prices is that in almost all cases, they are not paying out of pocket and instead the fee is getting taken out of their refunds. These refunds are primarily comprised of the federal Earned Income Tax Credit and the additional Child Tax Credit, two of the United States' signature anti-poverty programs, as well as from the income tax withholdings that 3/20/24 - COMMERCE - BILLS 240019 & 240087 were taken out of their paychecks as they worked. In this way, low-income Philadelphians and taxpayers at-large who fund the social safety net are being taken advantage of by tax preparers who charge exorbitant fees. This bill will not deprive the paid tax preparation industry of substantial clientele. Many low-income taxpayers if not already aware of free tax preparation option will, even after learning of them, still choose to pay to get their tax returns prepared by paid preparers. In part, this is because the range of refund products available from paid tax preparers is often more attractive to taxpayers than what the VITA programs can offer. Chiefly, the free tax preparation services cannot offer the free advance services offered by the paid preparers, whereby the taxpayer will receive part or all of their anticipated refund from the tax preparer or from financial companies 3/20/24 - COMMERCE - BILLS 240019 & 240087 linked to the preparer before the IRS or state has even processed their return. But good news we heard from, I think, Mr. Gonzalez that maybe there is a way where the VITAs can work on having some anticipation products that would no 8 doubt be better. Additionally, for those folks who go to a paid preparer that does not offer refund advances and who have to pay out of pocket, the notice requirement in this bill will ensure that they are not forced to come up with the cash or take out a loan just to obtain the government assistance bundled into their tax refunds, and that notice requirement will likely lead by word of mouth to greater awareness in the community of both the free tax preparation options as well as the federal Earned Income Tax Credit and additional Child Tax Credits. But this bill will impose a minimum of decency on that element of the paid tax preparation industry that 3/20/24 - COMMERCE - BILLS 240019 & 240087 currently lacks such decency. If tax preparation companies are going to be allowed to charge unjustifiable and outrageous prices, at the very least they should be required to inform potential customers who qualify for free government-sponsored tax preparation of that option before taking their money. This bill echoes the Commonwealth of Pennsylvania's recent efforts begun under then-Attorney General Governor Shapiro to combat unfair profiteering by the paid tax preparation industry. As Pennsylvania's current Attorney General Michelle Henry said last year of the multi-state settlement that followed an investigation which found that Intuit, through aggressive and deceptive marketing, tricked consumers into paying for TurboTax products that were available to free, quote, "By requiring consumers to pay for tax return services that should have been available for free, Intuit cheated taxpayers out of 3/20/24 - COMMERCE - BILLS 240019 & 240087 their hard-earned money. Intuit's deceptive practices and aggressive advertising campaign were unnecessary and illegal, especially when the IRS offers free tax return services for eligible consumers," end quote. The above statements are not meant to vilify all paid tax preparers. The tax return filing requirements imposed by the federal, state, and local government are excessively complicated and are long overdue for radical simplification.

But until that happens, there is a need for tax preparation assistance, and those preparers who charge a fair price and perform competently, of whom there are many and who perhaps make up the majority of paid tax preparers, provide a valuable service in helping people comply with daunting obligations imposed upon them by their government, not to mention to obtain the crucial economic support that has been woven into the Internal Revenue Code. 3/20/24 - COMMERCE - BILLS 240019 & 240087 We see no reason why these good preparers would object to this bill, which imposes a minimal requirement and which will not take away the paying clients upon whom they depend to make their living. Therefore, Philadelphia Legal Assistance supports the passage of Bill 10 No. 240087. Thank you.

Thank you so much for your testimony. Laura.

Good morning, Mr. Chair and members of the Committee. My name is Laura Smith. I'm a staff attorney at Community Legal Services, and CLS is pleased to have the opportunity to provide testimony this morning about Councilmember Landau's Bill No. 240087 regarding tax preparation service providers. CLS was established by the Philadelphia Bar Association in 1966, 3/20/24 - COMMERCE - BILLS 240019 & 240087 nearly 60 years ago. Since then, CLS has provided legal services to more than one million low-income Philadelphia residents, representing them in individual cases and class actions, and advocating on their behalf for improved regulations and laws that affect low-income Philadelphians. As the City's largest provider of free legal services, CLS represents 13,000 of the City's poorest residents each year, working with them to navigate legal problems. Our Homeownership and Consumer Rights Unit represents low-income clients with consumer law issues, including people who have been taken advantage of by unfair and deceptive business practices. Since the late 1960s, CLS has had a neighborhood law office at Broad and Erie in the heart of North Philadelphia. In our office, we counsel clients on how to protect their limited income and avoid being scammed by 3/20/24 - COMMERCE - BILLS 240019 & 240087 predatory residential property wholesalers, shady home contractors, and high-pressure debt collectors. Meanwhile, just outside our office, within a block where we represent clients every day, commercial tax preparers lure our clients inside with promises of quick cash and maximizing their annual income tax returns. There's a couple more for-profit tax preparers just a couple blocks away. These companies charge hundreds of dollars, as we've heard, for a service that most Philadelphians can get for free by visiting a non-profit VITA site, like those posted by Campaign for Working Families. For CLS clients, filing income tax allows them to qualify for the Earned Income Tax Credit, the EITC, which can refund up to $7,000 into their pockets. This money can be used to catch up on bills, invest in their children's education or allow a family to treat itself to a weekend vacation. The EITC 3/20/24 - COMMERCE - BILLS 240019 & 240087 is widely understood to be one of the country's most successful anti-poverty policies, and each year we see CLS clients use their refund to pay for food -- I'm sorry; their EITC to pay for food, make much-needed repairs to their home or catch up on their most important bills. Unfortunately, for-profit tax preparers take enormous bites out of the EITC tax return, money that our clients so desperately need. Together, these for-profit tax preparers suck millions of dollars out of low-income Philadelphia neighborhoods every year. Councilmember Landau's bill is a commonsense approach that will help protect consumers from exploitation in the marketplace by empowering them to make informed decisions. As we've heard, the bill will do two things. First, it will require the tax preparers disclose their fees up front. No longer will consumers be forced to wait until after 3/20/24 - COMMERCE - BILLS 240019 & 240087 the tax preparer has begun their tax return when the consumer feels captured and unable to freely leave before they are advised of the basic costs charged by the tax preparer. Second, it will require that customers be informed of free tax filing options available to them. Tax preparation assistance is provided at these high-quality VITA sites for free by trained workers who have been approved by the IRS. With this information disclosed clearly from the start, this bill will allow our clients to make an informed, free choice between using a costly for-profit tax preparer or a free non-profit tax preparer such as the IRS-supervised VITA sites. And for those clients that choose to use a free site, they will be able to walk away with more money in their pockets to care for their families.

Thank you again for the 3/20/24 - COMMERCE - BILLS 240019 & 240087 opportunity to testify. We're grateful to Council for addressing this very important issue and look forward to continuing to work with Council to ensure that more clients can claim and keep their EITC.

Thank you. Thank you, Laura, for your testimony. Any questions for this panel?

Just a real comment, Mr. Chairman. You just gave me a flashback of when I used to work in the summers and for very little amount, but they took taxes out and you filed that. And I'll never forget back then those U.S. Treasury checks that would come and you will see it in the mail and get so excited about your refund, but you felt empowered in that you were getting your money back. And the more of it that we are able to do to your bill, make sure that stays in the hands of working 3/20/24 - COMMERCE - BILLS 240019 & 240087 people, the better. So thank you for what you do. CLS is amazing and in many different ways. So thank you, Mr. Chairman.

Councilmember Gauthier.

Thank you, Mr. Chair. Thank you to all of you for your testimony but, more importantly, for the hard work that you're doing on behalf of Philadelphians. For most of the hearing, we talked about sort of these outrageous undisclosed costs that are charged to folks who are mostly eligible for free services, but a few of you also touched a few times on the difference between the competency level at the VITA sites where people are well trained and certified and some of these large predatory companies. Can you expound upon the most common errors that you've seen with some of the for-profit paid preparers and what 3/20/24 - COMMERCE - BILLS 240019 & 240087 those errors have meant for people and families?

That would require a long answer. There are a lot of mistakes around who can be claimed as a dependent and who cannot be claimed about filing status, and then there's a lot of issues around sometimes how income should be reported. And there's lots of -- anyway, I'll leave it at that.

I've also see a lot of tax preparers putting their own bank account information on a taxpayer's tax return, and that's a really big issue that impacts a lot of our community, because they don't check. They expect and they put their trust in the tax preparers to get their refunds.

And what do these type of errors mean for people?

Well, as Sherlyn said, when there's a mistake on the tax return and the IRS flags it or then -3/20/24 - COMMERCE - BILLS 240019 & 240087 the IRS is moving very slowly these days and it just takes a long time to unwind that stuff. Sometimes a taxpayer might not have received their refund because the IRS flags the issue before they issue the refund and it could take years for that person to actually get their refund. Sometimes the person gets more refund than they should have, and perhaps that's connected to the lowering the willingness to -- not willingness, but the ability to stomach the high fees is the refund, but sometimes when people get more of a refund than they should, that bounces back on them as a debt, which is more than just the extra refund they got but also penalties and interest, which then takes away future refunds when the IRS tries to collect and just causes general stress to be involved in a dispute with the IRS.

Thank you. Thank you, Mr. Chair. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Thank you. Thank you all for your testimony. Much appreciated. We'll now call our fourth panel, Stephen Ryan, David Ransom, Kim Busbee. (Witnesses approached witness table.)

Steve, if you want to start. State your name for the record and proceed with your testimony.

Sure. We're going to do us first and then we're going to switch out and have the other panelists sit here.

Sure.

Thank you. So my name is Stephen Ryan. I'm an attorney. I was barred here in 1980. So Lincoln and I did law together. I bring the same integrity to what I'm about to say to you that I did 3/20/24 - COMMERCE - BILLS 240019 & 240087 as an Assistant U.S. Attorney, as an organized crime prosecutor, and as chief counsel to a Senate committee. The bottom line is the industry does more than any industry I know of in America to provide free services. The program that I created with IRS in 2003 has served over 70 million people with free tax returns. During COVID, we served people with eight million EIPs where they were people who were going to get money in the COVID money but they hadn't filed a tax return. That program is a lawful program between the IRS and industry. So the industry has given away in that program alone over $2 billion worth of services if you only multiply each return by $30. If you talk about the astronomical numbers that are being talked about here, it would be $10 billion. Second, last year our industry did, if you only talked the top ten companies, 27 million free tax returns 3/20/24 - COMMERCE - BILLS 240019 & 240087 last year. So as we sit here and hear what you're being portrayed as an industry, those are facts, and I would go under oath and give you those facts, because I'm the one who collected it. I had an FBI agent interact with each company and get those numbers, and then we submitted them in writing to the IRS as a requirement of the program that we serve. So what I want to convey to you is, we actually share the same intent for transparency as an industry and to give free services when we can. But at the same point, and Mr. Ransom will pick up at this point, this bill is unconstitutional as drafted. I'm retiring from the industry. I would not take this case to defend the bill because it violates the First Amendment in terms of speech, not on the transparency issue. Transparency issue is independent. You can't make businesses talk 3/20/24 - COMMERCE - BILLS 240019 & 240087 about the services that government wants you to provide. And I know that's the case because we all support that not occurring when women would have to be told something about abortion because a state passes a law that requires that they be told certain things. In other words, it's the same First Amendment right. So I would ask you to actually get an opinion from the City's lawyers about that aspect of the bill, and then we would like to work with you on making the transparency provision in this as workable as it is. And you'll find when you talk to the people who actually do tax preparation for a living, you can't tell exactly what the return is going to look like. There are 400 major forms that are used. In my Free File program, we provide 40 forms, but if you go outside of that, you can't do it. Seventy-eight thousand dollars this year is the level -- if anybody has 3/20/24 - COMMERCE - BILLS 240019 & 240087 an AGI of below 78,000, you can use our free program, which is on the IRS website. So I thank you for your time and attention today to knowing that the industry has a side that I wanted you to make sure you knew factually.

Chairman Squilla, members of the Committee, my name is David Ransom. I'm counsel to the American Coalition for Taxpayer Rights, also known as ACTR. We're the trade association for the national tax preparers. Steve is my former law partner, and we collaborate daily on these issues. Thank you for giving me the opportunity to speak on Councilmember Landau's bill. Yesterday, ACTR members and the Councilmember and her staff had the opportunity to have a cordial, respectful conversation about the bill and our concerns about it, and I'll share those momentarily. 3/20/24 - COMMERCE - BILLS 240019 & 240087 First, a word about the trade association. It was formed in 2011, and as I mentioned, it's national tax preparers, not just the retail brick and mortar storefronts that you're familiar with and some other witnesses will testify about from Block and -- H&R Block and Liberty and Jackson Hewitt. But our members also include the DIY companies, do to yourself, predominantly online like Intuit, TurboTax and others. And then our membership also includes those companies that make a professional product that you're all familiar with that accountants and lawyers who prepare taxes typically would use. So our members assist in the preparation of about -- preparation and filing of approximately 120 million, our small membership. There's only 12 of us, 120 million of the 160 million federal income tax returns that are filed annually. So I just wanted to give you that scope. And we also are obviously 3/20/24 - COMMERCE - BILLS 240019 & 240087 involved in the filing of state income tax returns for Pennsylvanians, state income tax returns here as well. As Steve said, the figure we have is 28.6 million free returns last year provided by this industry, and Steve outlined the methodology that we used to aggregate that figure, and that 28.6 million includes 2.8 million within the IRS Free File program and 25.6 million free federal income tax returns through the preparers' commercial websites and whatnot. That figure does not even include the, I believe it's, approximately 4 million through the VITA program that operates with the Internal Revenue Service.

We support VITA, by the way, as well as an association.

So as we explained, and I'll be brief here, as we explained to the Councilmember yesterday, we want to work with her and we want to work with you to begin a dialogue that 3/20/24 - COMMERCE - BILLS 240019 & 240087 ensures that her bill does not have unintended consequences for businesses and taxpayers in Philadelphia. We've seen this a lot in other jurisdictions over the time that we've represented the industry. We believe there are significant issues with the bill as currently drafted, including the filing, and Steve touched on this. In our judgment -- and in my written testimony that was submitted for the record, the case is cited. In our judgment, the bill 15 does violate the First Amendment. And the real rub here is that you would be requiring commercial enterprises in the City to tell customers seated right in front of them perhaps about free competing alternative services. If the City of Philadelphia wanted to promote free services, whether VITA, Free File 23 that Steve operates or other free offerings, which we've heard from some of the other witnesses, if the City wanted 3/20/24 - COMMERCE - BILLS 240019 & 240087 to do that or you wanted to do that respectfully in your districts, absolutely 100 percent that is fine. But our view is that requiring private-sector tax preparers to tell customer/clients, taxpayers literally in their office, about competing products, that that is a violation of the First Amendment per United States Supreme Court. I'll be very brief. We redlined the Councilwoman's bill and I'd ask that our redline be put in the record, Mr. Chairman. And if the City, again, if the City wants to put a document on its website about no cost alternatives of free tax preparation, that is 100 percent permissible. We have no problem with that. So we do believe that the bill's language needs to be tightened in several respects. One of the most important is the language currently regarding the disclosure "has provided a detailed explanation of the cost of 3/20/24 - COMMERCE - BILLS 240019 & 240087 service." We believe that's too broad and undefined. In the redline you'll see we believe that you should require a policy or statement setting forth the services and the estimated cost, which would be much more useful for taxpayers. And then, finally, on the private right of action, we believe that your enforcement mechanism, the City should be the enforcer. We don't believe that you should create a new private right of action for taxpayers. Equally important, we think that where there is an alleged violation, that in fairness to the preparer community, that they be given the opportunity to cure. So the City would send them a notice, we believe you're in violation of our policy or our ordinance, that they be given a number of days, 20 or whatever that might be, to cure that deficiency, and in fact, if they don't and there is a deficiency, that then they would be subject to penalty. 3/20/24 - COMMERCE - BILLS 240019 & 240087 So, again, on behalf of our membership ACTR, we want to work with you. We want to thank you for your consideration and willingness to talk with us, to the Councilmember. We really appreciate that. Finally, we would ask that you hold a vote on this bill for today and that we continue our dialogue and let the process move forward. Thank you.

Thank you. We'll hold questions until your completed testimony.

Mr. Chair and members of the Committee, thank you for the opportunity to speak with you today. My name is Kim Busbee. I have been born in Philadelphia, educated through the Philadelphia public school system, and have been an H&R Block tax professional and team lead for the last 37 years. I manage three H&R Block offices that are located within South Philly. That 3/20/24 - COMMERCE - BILLS 240019 & 240087 includes me serving over 30 preparers and staff members under my care. I'm here today on behalf of H&R Block and as a tax preparation professional to ask you to amend Bill 7 240087. Each year we are proud to help thousands of Philadelphians prepare their taxes and receive their benefits. We understand and support Council's consumer protection goal, but without change, we believe this bill will be difficult to apply in practice and have unintended consequences for taxpayers and professionals alike. Asking potential clients to sign the list of City-approved free tax preparation services does not consider rather those taxpayers are in fact eligible for those services. Many common filing situations are not supported by the free tax preparation services available. There is sure to introduce confusion on the part of the taxpayer and 3/20/24 - COMMERCE - BILLS 240019 & 240087 the tax professional. We well know that services that cannot be provided by free services, then to talk about it is confusing. We have the example of gig workers such as Uber or Lyft. Many of them are not eligible for the free services, and we are now required to ask them to review and sign a document before we even start the conversation. We ask you to amend the bill to instead require the City to make available a list of all available free tax preparation services on their website and through their other channels. We at H&R Block are proud to have an up-front, transparent policy. We support this part of the bill's intent, but we ask you to amend the language to ensure it considers the nature of the tax preparation process. Because each client situation is different, we often don't know the final cost of the preparation service until the end of the interview. 3/20/24 - COMMERCE - BILLS 240019 & 240087 There are many scenarios where the total price of the client's service could change, and we ask that the bill consider this. H&R Block has long advocated for policies that protect taxpayers from unscrupulous preparers, and we are leaders in up-front, transparent pricing disclosure. I see it every day how my tax professionals at H&R Block truly put their clients first. I ask that you please consider amending Bill 240087 so that we can continue to serve our clients in the best way possible. Thank you again for the opportunity to speak to you today.

Thank you. Thank you all for your testimony. Councilmember Landau.

Thank you. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I just wanted to clarify that the bill would require the City to hold the list. This wouldn't be a list that would be distributed by the tax preparers. You would instruct people that if they're eligible, the City would have these lists of free tax sites available to you.

Thank you. Councilmember Gauthier.

Thank you, Mr. Chairman. I had questions about Mr. Ryan's testimony and Mr. Ransom's testimony, which was sort of similar. Much of the testimony talked about how much the industry is already providing by way of free tax preparation services and talks about the industry in a very benevolent way, that you share that goal. I don't know if what you're testifying about as far as the First Amendment violation is true, but I'm 3/20/24 - COMMERCE - BILLS 240019 & 240087 imagining that only becomes a problem if you challenge this. So if the industry is as benevolent and shares the same goals around providing free tax preparation, why would you challenge or not be in support of an effort to provide low-income people with free tax preparation and let them know what they're entitled to?

First, let me say -- that's a great question, Councilmember. H&R Block, and Ms. Busbee can speak to this, they have a program internally where they identify people who come in that they determine are eligible for free service. So they have their own processes there. Why would we consider challenging this, which I don't think needs to be the case, but the problem is that if this were to occur in multiple jurisdictions, you can imagine the practical difficulty of national companies trying to conform to each of 3/20/24 - COMMERCE - BILLS 240019 & 240087 these jurisdiction's requirements, right? And so we had an example in Albuquerque, and thankfully we're talking about this bill, the Councilmember's bill, before it's been considered by the full Council. There was a situation in Albuquerque where it became law before we knew about it. So then we went to the staff and the Council -- I'm telling you this just because we pointed out the First Amendment issues, among others, and we talked with them, and ultimately the City Council amended the bill, and it was amenable to both industry and the City Councilmembers who were trying to do the same thing, which was well intentioned, is to help lower- and moderate-income folks out. So does that answer your question?

So you're not going to challenge this? You support the goal of this and you're not -3/20/24 - COMMERCE - BILLS 240019 & 240087

The whole of this? No, I didn't say that. No. No. 4

You said that the industry is providing a lot of free tax preparation?

Yes.

So it seems like you would support the goal of this legislation.

Well, we support -- no. Maybe I misunderstood your question. Yeah, we're absolutely supportive of providing -- as Steve and I said, our industry provides millions of free tax returns annually. We're very supportive of that. The issue here is the requirements that are associated with this bill and if you applied them in multiple jurisdictions all around the country, that would be problematic from industry's standpoint.

Thank you. I have a question for 3/20/24 - COMMERCE - BILLS 240019 & 240087 Ms. Busbee. Thank you for your testimony. I definitely understand your testimony around maybe wanting to see more fullness in the description of the free tax preparation services, but I don't understand why -- I mean, that would just demand giving more information through the tax preparation services. If you want people to have more of an accurate description about the free tax preparation services available to them, I don't think that there needs to be an amendment to not have the for-profit or private tax preparation services provide that info. Maybe that's just about providing more info about who is eligible. Would that work?

I guess what we're looking at here is the fact that when clients sit with us, it's a build of trust. It's a shared experience between us and the client. So when we begin to talk about the free services, those that don't qualify for it want to then 3/20/24 - COMMERCE - BILLS 240019 & 240087 question why they don't. So it would depend on how much information is being provided for the client before they come to us, because as we heard, there are different levels of what can be done free by which agency is doing it. As the gentleman sat here and said if it's beyond those four forms, they don't do 10 it. So that means that we now have to 11 educate ourselves on which ones will and 12 which ones won't and then have that whole 13 conversation, which could, again, impact 14 the conversation we have with our clients.

Would that be hard for a very large national company to do? You're already taking in quite a lot of information about tax laws. Would it be hard for you to take in more information about free tax prep services?

Would it be hard? I'm sure we'd be able to have the conversation if the information is 3/20/24 - COMMERCE - BILLS 240019 & 240087 provided to us, because we would not be able to develop that ourselves, because we don't know what each of the free agencies offer. So them providing it to us, then we having to discuss it, we feel that if it's provided to us, it could also be provided to the citizens of the City without having to come through us.

The bill offers both, to my understanding. The City would provide the information and the private tax preparation services like H&R Block would provide the information.

Then we also require to have them sign something, correct?

Yes, but you're asking people to sign a lot of things during the process of your business.

We're asking them to sign documents that impact their tax return, yes, ma'am. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Thank you. And then I wanted to know if either of you had a response to some of the testimony around undisclosed large fees, errors on returns. What's your response to that?

Is that for both of us, Councilmember?

Yes.

Do you want to go?

Certainly. Again, as I said, H&R Block has a policy where we offer up-front, transparent pricing, which means before we actually begin the return, we evaluate the documents and we allow the clients to know up front what the estimated price would be based on the documents we have in front of us. Now, there are times that they bring other documents in after and then we alter the conversation through the preparation. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I guess as far as errors are concerned, H&R Block stands behind their product, because if a client has an error, we are open all year. We don't have all of our offices open, but we make sure offices are centrally located, and if the client can't get to the open office, we do arrange for tax pros to meet clients in offices that are more convenient to them and we help them resolve the issues.

Thank you.

I would say just briefly, first of all, regarding some of the prior testimony that we heard, the anecdotal stories and whatnot, I mean, that's egregious, it's outrageous in some of those senses. It can't be defended. If that was my son, my daughter, my sister, I would have a similar reaction. But I would also argue that we shouldn't allow anecdotal evidence necessarily to drive policy here. 3/20/24 - COMMERCE - BILLS 240019 & 240087 So to the question about errors, I reject fundamentally that free tax preparers -- and the other folks you're going to hear from I think in the next panel can speak in a more qualified way even than I can on this in regard to errors. The notion that free tax preparation is somehow substantively better than commercial tax preparation, I don't accept that at all. I reject that outright. Commercial tax preparers have an incentive to find every deduction and credit that you or the people you know that go to them for the service are eligible for, because they want you to be pleased. They want you to come back next year. Oh, yeah, I'm eligible for EITC. So I don't accept the idea that somehow free tax preparation is substantively better than commercial tax preparation.

Thank you. 3/20/24 - COMMERCE - BILLS 240019 & 240087 Thank you, Mr. Chair.

Councilmember Gilmore Richardson.

Thank you so much, Mr. Chair. And thank you all for your testimony. I apologize for having to leave the Chambers for a moment but was listening online to the hearing. I had a very quick question for this panel. When clients come in now who qualify for free tax preparation services, how do you engage with them now, like currently? If someone comes in that you find after reviewing their information is eligible for a free tax preparation service, what do you do?

Ms. Busbee.

Once we go through the transparent pricing, if they have concerns, I've actually directed clients to -- H&R Block has a free DIY product, and I've actually shown them how they can go -- I use my computer in the office -3/20/24 - COMMERCE - BILLS 240019 & 240087 how they can go directly to hrblock.com, where to locate it. I explain to them the actual steps they would go through. A lot of it is very simple. They can take a picture of the W-2, because the W-2 or any other tax documents has to be part of the return. Take a picture and how they can actually just upload it. And if they'd like us to review it, we also have a process of what's called a second look where we will also review that return for them to make sure it's accurate if they would like us to, and that's free of charge.

And so I guess my question is, what is the standard operating procedure? And I recognize that I believe you're a manager of several H&R Block locations. What would be the standard operating procedure in this industry at this time? I think we have representatives from another organization, from the American Coalition for Taxpayer Rights, H&R Block, and then 3/20/24 - COMMERCE - BILLS 240019 & 240087 Mr. Ryan. What is the standard operating procedure when someone comes in and you then discover they are eligible for this service? Because I think I tangentially remember a case with the federal government around TurboTax or something where they had to pay a settlement because folks weren't aware, I guess, or easily notified that they were eligible to do the Free File instead of paying. Can you just speak to what is the industry standard operating procedure and then sort of your thoughts around that particular -- because I remotely remember that litigation.

Yeah. Councilwoman, I think that's a great question. I don't -- and the gentleman in the next panel and Ms. Busbee can probably address this better than I can regarding standardization. I'm unaware of like what the standard is in the industry. I think it's company by 3/20/24 - COMMERCE - BILLS 240019 & 240087 company. So our trade association, which includes lots of companies, companies, 5 they may have varying levels of how they 6 approach this question a taxpayer 7 presents and they're eligible for a free 8 offering or free tax preparation, how 9 they handle that. I honestly am not 10 entirely sure how that occurs across 11 various companies. 12 So the Intuit, TurboTax situation really related to, without -- it's complicated for me, quite frankly. I'm not that tech savvy -- related to how search results in, for example, a Google search were ordered and was the IRS Free File program at the top of the list if someone put in IRS Free File program or was it four, five, you know, entries down, and I think that revolved around that. My understanding is that that issue was resolved, and I know that Steve's organization, the Free File 3/20/24 - COMMERCE - BILLS 240019 & 240087 program, and the IRS -- he works very closely with the IRS, as does our association -- they resolved it and it's largely not an issue now.

7 Thank you. 8

9 Councilmember Landau. 10

Just a 11 quick question. 12 Ms. Busbee, are you aware that 13 the FTC filed a complaint against H&R 14 Block in February of 2024 for deceptively 15 marketing free services where they called 16 it -- they said that H&R Block was 17 leading customers into higher cost 18 products, making for more complicated tax 19 filings despite consumers not needing 20 them? 21

No, I am not. 22

I am aware of 23 that, and I think it's frankly a little 24 bit unfair to be talking about an 25 assertion by the FTC that has really not 3/20/24 - COMMERCE - BILLS 240019 & 240087 been fully adjudicated. So I can't speak for H&R Block. I'm sure they'll defend themselves, and that's really all I can say about it on behalf of the trade association, but I would expect that the H&R Block operators in various communities wouldn't necessarily know about that either.

Thank you.

Question, you said that Albuquerque, the legislation that passed there, was that passed there for offering free tax services?

Yeah. I believe -- I have to jog my memory here, Chairman. I do believe the bill became law. We didn't know about it until after it had been voted out by Council, that it did require -- similarly did require tax preparers to inform customers/clients of free tax alternative offerings. And, again, we presented the same caselaw to 3/20/24 - COMMERCE - BILLS 240019 & 240087 the staff and the City Council after we learned that this had been enacted. So we had a good -- sorry.

You didn't sue them after it became law?

We did not, because we had a very good dialogue with the staff and the City Council and they amended the bill. That was one of the very first gives in the negotiation, if you want to call it negotiation, and the discussion, was their recognition that if they continued with this law -- and we made very clear to them that they might well -- we might well seek an injunction in court blocking the application of the law. They understood our position, and from their perspective -- and you may have a different perspective, but from their perspective, they were willing to negotiate on that and they removed that from the bill. And I believe we resolved it in a way that was amenable to industry and frankly was amenable to the city. 3/20/24 - COMMERCE - BILLS 240019 & 240087

But there was no precedent or opinion?

No. There was no 5 lawsuit. There was no legal action that was taken.

All right. Thank you. Councilmember Young.

Yes. Thank you. Can you, I guess, quantify for us if you're aware, and this is for any member that's up there on the panel, to let us know here I guess in Philadelphia, in the region, like how many of the tax preparers are some of your -- I guess for H&R Block, how many of your tax preparers are CPAs, attorneys or enrolled agents with the IRS versus those that are just annual filing season program participants and PTIN holders?

I'll let H&R Block answer that, but I'm sure, Councilman, that they could provide you with -3/20/24 - COMMERCE - BILLS 240019 & 240087 you're looking for statistics or numbers on those?

Yeah, essentially. Because, again, when this -- that's the premise of this legislation, is a consumer protection model here, and when you have attorneys or CPAs, they're held to higher standards because they are licensed professionals. And so when there are just PTIN holders or those folks that are just participating in the annual programs, yeah, there may be certain requirements, but they are not held to the same standards that some of these professionals are held to in providing information to folks and making sure that the returns that are filed are filed in a correct and moral manner essentially, right? So that's what we're trying to get to in addressing that problem with this legislation.

We'll get you those figures. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Thank you.

Thank you too. And I know Councilmember Landau, who is very fair and working with all sides and open to this, will be also working with our Law Department to go over those things. So hopefully that will -- these questions or concerns will be able to be addressed.

Thank you very much.

Sorry.

Councilmember Young.

I have another question. How much would it cost your industry to provide this type of notice to consumers?

That I personally don't know. We could get you that information as well. I don't know if Ms. Busbee would know or not. 3/20/24 - COMMERCE - BILLS 240019 & 240087

It would actually depend on -- since most of our tax professionals are hourly, it would depend on the time it takes to have those conversations, making sure the client understands exactly what they're signing and what they have or don't have to do. It would have to be kind of computated as to what it would cost. I don't have that off the top of my head.

And based on, I guess, the level of services that you all provide, how many clients do you think will opt to not use your service and decide to go to one of the VITA regulated sites?

Again, I don't have the data to answer that.

I'd have to speculate. I mean, one figure did come up yesterday, and it's good to get -- I'm glad that you asked that question. It's good to get in the record, is yesterday in our conversation with Councilmember, 3/20/24 - COMMERCE - BILLS 240019 & 240087 Councilmember Landau, H&R Block represented -- and we'll get you this figure, sir. H&R represented that last year half of the returns prepared in the City of Philadelphia were provided at no 7 cost. Half. So it's a significant number.

Thank you.

Councilmember Gauthier -- oh, Councilmember Jones.

No. I yield.

All right. He yields.

I'm sorry. Did you say half of H&R Block's tax preparation?

That is what was indicated yesterday, ma'am.

Okay. When Ms. Busbee testified, she said that the free program was do it yourself on a 3/20/24 - COMMERCE - BILLS 240019 & 240087 computer. Is that -- am I understanding that correctly or do I have that -- am I not understanding that? So the free tax prep is do it yourself?

That I'm not -- that I'm not sure if the figure that H&R -- this is again from our conversation yesterday with the Councilmember. I'm not sure if that figure was all DIY or if that was in addition some in-person tax preparation as well, but we can get those figures for you.

Thank you.

Councilmember Jones.

As I listen -- I don't know who pays you, but they aren't paying you enough, because your argument made me think about would Wendy's tell about McDonald's value menu? And I don't know if we would do that. However, in talking to my colleague here, 3/20/24 - COMMERCE - BILLS 240019 & 240087 we're not talking about burgers. We're talking about a scenario like where a hospital might let people know about free clinical services that might be cheaper or affordable, and that is in the -- because of the people's condition and particularly income, that might be a better way. So what I'm hoping is that we pass this out of Committee and allow the author of this legislation to work with you to try to find out where those nuances are, that we don't want to unfairly penalize your industry, but we do want to find a wide berth of options for people who cannot afford to pay these fees. So I'm listening to what your argument is, but I also think that there is room for amendment as we pass this out of Committee. That's just my thoughts.

Councilmember Richardson.

I 3/20/24 - COMMERCE - BILLS 240019 & 240087 just wanted to thank Councilmember Jones for those remarks. I too agree and also believe we're waiting on information, additional information, from the Law Department as well. And so I wholeheartedly concur with your remarks, Councilmember Jones. So thank you.

I'd like to thank the Councilmember for his remarks too. Can I use him with my clients?

Well, thank you for your testimony. Are there any other questions? (No response.)

Seeing none, thank you so much. Panel 5, we have Will Carter, Kamil Salter, and Maurice David. (Witnesses approached witness table.)

Will, if you want to start first. Just state your name for the record and proceed with 3/20/24 - COMMERCE - BILLS 240019 & 240087 your testimony, and we'll go in that order.

All right. All right. It's great to be back in these Chambers. My name is William Carter. I am Vice President of Local Government Affairs for the Chamber of Commerce for Greater Philadelphia. I have some prepared remarks, but I also have some other remarks at the same time. It's still morning, right? Yes. Good morning, Chairman Squilla, Vice Chairman Jones, and members of the Committee on Commerce and Economic Development. My name is William Carter, Vice President of Local Government Affairs at the Chamber of Commerce for Greater Philadelphia. I appreciate the opportunity to provide testimony on Bill 21 200087 -- 240087. The Chamber's vision is to make the Greater Philadelphia region the top local destination for business and a leader in inclusive growth, and we 3/20/24 - COMMERCE - BILLS 240019 & 240087 support public policy that encourages the growth and prosperity of the City of Philadelphia and our region. This bill, although well intentioned, puts an undue burden on business owners and their operation, possibly infringes upon free enterprise, and sets a precedent that could create a slippery slope affecting the bottom line of a lot of small business service professionals. Albuquerque, New Mexico, which was mentioned earlier, adopted a tax preparer ordinance, which took effect on January 1st, 2023, with a very similar purpose. Albuquerque's ordinance 18 requires tax preparers to provide service and fee disclosures, which we agree with, both written and posted inside and outside the establishment to ensure consumers understand the tax preparers' obligations and qualifications and their rights as a consumer. A notable difference from 3/20/24 - COMMERCE - BILLS 240019 & 240087 Albuquerque's ordinance and this bill is a requirement to disclose information on free tax preparation services. This provision was also included in Albuquerque's ordinance, as was mentioned earlier, when first introduced, but was later amended to remove due to concerns about constitutionality and open potential to litigation against the city if challenged in court. Additionally, the State of New Mexico, you may not know, does not have to -- you do not have to be certified to prepare taxes, which is the impetus of this bill, and we know obviously that you don't have to be certified in PA. And this provision -- excuse me. Eligibility to register as a taxpayer in the State of Pennsylvania, you must obtain a degree from an accredited college, and this is what we understand is not the -- is the case here. The Chamber supports fair 3/20/24 - COMMERCE - BILLS 240019 & 240087 business practices. We understand that there have been reports of predatory behavior, which we do not agree with, specifically low-income individuals during the tax filing season, and we're supportive of reasonable solutions to resolve this issue. In the context of this bill, we support requiring tax preparers and the respective establishments to be transparent on the cost of any service. That should happen in any business altogether. However, there are many concerns raised by our members as to the bill as currently written -- as the bill 17 is currently written, specifically the requirement to provide consumer information with no or low cost services. The Chamber remains committed to working with key stakeholders in both the public and private sector to ensure businesses in the City of Philadelphia are conducted fairly and equitably for the same considerations for any 3/20/24 - COMMERCE - BILLS 240019 & 240087 legislation that impacts their ability to grow and access free enterprise. As I was listening to this conversation, and once again appreciate everybody here, it sounds as though we're trying to target a specific group of bad actors, as we should. I mean, at the end of the day, if you have a business, you should be disclosing your costs. People should know how much it costs. Right out of law school, I worked in the entertainment industry. I had my own entertainment practice.

I was all over the City doing contracts for a lot of nefarious people, a lot of non-nefarious people. I'm just saying, not everybody in the music industry is Babyface. But at the end of the day, I put up front these are my costs to do the contract. I was known, as Councilman Young sometime know, I was known as loyable (ph) throughout the City. I'd be down in West Philadelphia, Brooklyn Street, a studio 3/20/24 - COMMERCE - BILLS 240019 & 240087 down that way right beside Bus's Gym. You guys know Bus. He was sending people over to me all the time. But I was hustling in a good way trying to make a living. I was in debt, not rich, not poor but in debt, which is a different type of hustle when you have to make your rent, you have to eat, those type of things. And so I remember it being very hard to do business in the City as a young professional. However, as a licensed attorney, I know that I had to do it in a fair and fiduciary way, and many people in this industry -- and I have a lot of friends who are in the tax preparer industry who are certified accountants. When you became certified, you actually have something to lose. You're not out here doing anything unscrupulous, although it can happen, but there's a further thing that you have to lose, which is your license, if you're found to be doing something in an 3/20/24 - COMMERCE - BILLS 240019 & 240087 unscrupulous manner. And I think this kind of -- there's a better way to balance this bill 5 so we're not affecting the people that you see out here during tax season. The reason you see them during tax season, because that's tax season. Just like you see football players through the football season. It's not like they're fly-by-night. They come out and then, you know, they have other things that they do in the off season. But they're no less good business actors, for the most part, out here trying to make a living, and we're trying to make the City more palatable, more attractive for businesses, particularly diverse business. I'm pushing inclusive growth. Bottom line, what that means is more people making a good living inclusively, whether they work for themselves or for others. But our city gets a bad rap for businesses, because we keep on piling 3/20/24 - COMMERCE - BILLS 240019 & 240087 impediment on top of impediment for small businesses trying to grow, and it's something that is known obviously nationwide. I sat in this Chamber for years working for the former Council 8 President. I used to think that these 9 businesses were crying wolf. Now I'm on 10 calls on a regular basis where they say 11 Philadelphia is a non-starter, there's 12 just too much cost, too much red tape, 13 and I'm like -- I really get it, and I 14 also get it from my standpoint for when I 15 was a young attorney out here working for 16 myself. So I think if we limit this bill, possibly an amendment, to say let's go after non-certified tax prep services, not licensed accountants who are out here trying to pay their student loans back, which I'm still trying to pay back. I'm 53. I'm still paying my student loan back. Maybe a bill about that. But I would just say that at 3/20/24 - COMMERCE - BILLS 240019 & 240087 the end of the day, there are people who are trying to make a living in this space who are not doing the wrong thing, and maybe if we have some type of amendment, we go to the non-certified tax preparers and say, this is something you need to provide if you're going to be non-certified, may be a balance to it. So with that, I'll end my testimony and just allow these gentlemen to speak.

Please proceed. State your name for the record and then proceed with your testimony.

Good morning, Council. My name is Kamil Salter. I'm a CPA in Philadelphia. I own six Liberty Tax stores. Opened my first store back in 2008. My grandparents had a tax office in West Philadelphia for many years. My mother is a CPA and had a tax office for many years. So I'm a third-generational tax professional, but I'm also a licensed CPA. 3/20/24 - COMMERCE - BILLS 240019 & 240087 I would say, you know, just where our store is located, a lot of low-income business corridors throughout the City, all of my staff are from those corridors. You know, like my staff, for the most part, this is the longest job they've ever had. They now have careers from working at these with me. These people actually care about the job probably more than -- they care about what they do more than I do. I mean, I try to say, you know, take some time off, this and that. No, I want to come to work, I really enjoy what I do. But with that being said, having -- every year we go through 18 hours-plus of training just to be able to -- for Liberty Tax, just to be able to do tax return, just to do tax service from Liberty's perspective. And now having to offer -- like when customers come in, they want us to do their work. They don't want to go anywhere else. 3/20/24 - COMMERCE - BILLS 240019 & 240087 We'll say, hey, why don't you go check out this other place here. And for some people, it may be beneficial to get their taxes done for free, but a lot of times they still want us to provide the service. Or there may be -- the scope of the tax return may be just a little more challenging or a little more complex that a free place may not be able to do. So then they have to come back and now they're angry. Or when it comes to like after tax season per se, we are open year round. There's so many different things that happen after April 30th. Somebody gets a letter in the mail, how do I do this. My refund didn't come for whatever reason during the tax season, and now we're on the phone with the IRS trying to help you get your refund. Whether it's in August, you need help with getting a copy of your tax return, FASFA information. So many different things that 3/20/24 - COMMERCE - BILLS 240019 & 240087 we provide for services all year round. So part of the fee is not just for, oh, hey, we're going to get paid for taxes. So, no, in November 22nd when you need help, you have somebody you can call, you have a place to go and you can get assistance. Additionally, when it comes to the pricing, I mean, our price -- because a lot of times the customers that come in, everybody's return is simple when it starts. It's always a simple return, but then as you get into the interview, you start going through things, you find out they had just so much more going on, especially now a lot of people, they have the small businesses, whether it's gig workers, rental properties. Everybody is doing stocks and crypto currency, so things that come out of the conversation when they just thought, oh, it's simple, but now the price goes up, and if we were to gave you a price in the beginning -- I don't disagree with the concept of 3/20/24 - COMMERCE - BILLS 240019 & 240087 up-front pricing. Actually this year for the first time ever we have up-front pricing that the customers can see where they fall into. So it's their choice, and it's always since day one for me it's been -- it's always been free estimates with Liberty Tax. You were never obligated. But if a customer didn't like it or whatever, they didn't have to stay. We don't make you pay just to sit with us. That's never been the case. And from the customer perspective, just even things like with the City of Philadelphia, I don't know how familiar you are with the -- the City of Philadelphia's tax preparation services, just to be compliant with Philadelphia, there's so many different -- let's say just if you have a rental property, you want to get your rental license renewed.

If you don't have your tax return filed with the City, not with the state or the IRS or with the 3/20/24 - COMMERCE - BILLS 240019 & 240087 City, a lot of people don't know how to do that. I've had to -- we in our office, we have to actually pay -- I'm sorry. People have to come pay us that they've already paid or gone in other places to get their taxes now. They have to pay an additional fee, because the other places don't know how to do these additional services. So we have a lot of skills and experience that we've garnered over the years. And then, lastly, I would just say, you know, we're not -- it may appear, but we're not raking in millions of dollars. So when it comes -- like if there's ambulance chasers out there now saying -- like grouping up a bunch of people, if they give you -- did they tell you about their tax preparation fees. Okay, we're going to get all these people. So we may be able to prove that we did do these things, that we did provide service, but we have to pay 20, 30, 40, 50 thousand dollars in legal 3/20/24 - COMMERCE - BILLS 240019 & 240087 fees, we might as well just close all our businesses, which our business corridors are already dying. I mean, we're like one of the last vestige of businesses that have been there. Like I said, most of my stores, we're ten-plus years and we just -- you know, we've been handling business. So that's kind of just all I wanted to share in that space.

Thank you. Maurice David. Just state your name for the record and then proceed with your testimony.

Hi. Good morning. Good afternoon. Good morning. My name is Maurice David. I work for Jackson Hewitt Tax Service. I'm the Regional Manager for the Philadelphia area. So I just have a couple of topics to discuss. I don't want to be redundant. Most of the things have already been said. 3/20/24 - COMMERCE - BILLS 240019 & 240087 On a practical level, when you talk about a tax preparer, so if you think about coming into a store and asking a tax preparer should I prepare with you or should I go free, it would be very difficult to think practically that that tax preparer can make that assessment and understand everything that every free service offers, because that preparer would have to be trained in that, and that is not something that we regularly do. We don't train folks to teach them what this particular one offer is, what H&R Block's free offer is, what Liberty's free offer is. We don't do that. And the other problem with that that I see is if you refer someone to something for use, you in a sense own that referral. So if they go to this free service, if they go to VITA and they weren't correct or they couldn't do it, they come back to you and say, hey, you referred me there. You own that 3/20/24 - COMMERCE - BILLS 240019 & 240087 referral. So I think from just a purely practical standpoint, it would be very difficult to ask preparers to figure all this out, understand this, learn this. The question previously was how many hours, what would it cost you to train these folks. So we train about 9 to 30 hours, due diligence, tax 10 preparation. If we had to add geography, 11 you know, topography, geography, that you 12 have to go to Smith Street but you're 13 here and I need directions, we would 14 probably have to add several hours of 15 training to teach them everything. So I 16 think from a practical standpoint, that's 17 a problem. 18 And then the other comment that 19 I heard was the whole regulation thing. 20 As paid preparers, we're highly regulated 21 by the IRS, right? So if you file a 22 return that is deemed to be fraudulent, 23 your penalty is $500 per tax return. 24 These are huge penalties. We are 25 required to do due diligence. We are 3/20/24 - COMMERCE - BILLS 240019 & 240087 required to complete form 8867. Non-paid preparers are not required to do that. So we do have regulation. We are regulated. We have long-term preparers that have been preparing tax returns in Philadelphia. We operate about 50 locations here, and hundreds of Philadelphia-based employees. These are folks that live and work in these communities and prepare tax returns for friends, families for a fee. That's what we do. So I just -- the whole point of being that we are regulated. The Internal Revenue Service highly regulates us. We can't share their information. IRS code 7216 does not allow us to just share their information. We can't just give it out to anyone. They have to agree to that. So from a regulation standpoint, we are much different than non-paid preparers. So I just wanted to 3/20/24 - COMMERCE - BILLS 240019 & 240087 make that point. But, again, I'll wrap it up by just saying that we are a community-based business, just like my friend from Liberty said. We are based. We have employees that live here and work here and have year round jobs. We are open year round. We are not fly-by-night. We have 5,200 Jackson Hewitt locations around the country. If you had your return prepared in Philadelphia and you moved to California and there was a letter and a problem, bring it right into a tax office. Right now we're dealing with rejects, right? The biggest reject the IRS has right now is this 1095-A problem, right, if you got your health insurance through the exchange. Well, we work through that with the taxpayer. We make sure we get that resolved. So I'm not sure if everybody else is doing that, but we do do that. We have IP pin issues that we help taxpayers solve. 3/20/24 - COMMERCE - BILLS 240019 & 240087 So we are a service for a fee.

We are a business in the City of Philadelphia. That's pretty much all I have on this. Thank you.

If I could just add one more thing. We talked earlier about moving it out of Committee without having the enforcement piece worked out. It could have a huge chilling effect here in the City on businesses if the community does not know what's going to happen once it's passed and it hasn't been worked out as to how it will be implemented and how it will be enforced. I think that is a concern. I'm certain it's a concern of the business community altogether on any legislation passed. And, once again, we're trying to promote business growth here. We need more jobs here in the City. We need more people like this young man and this young man growing, and when they grow, what they hire. Nobody 3/20/24 - COMMERCE - BILLS 240019 & 240087 hires just to hire. They hire because they need help, and if they don't grow, they don't need help. We want to make sure that that happens. So just around the enforcement, around a clear set of guidelines, whatever happens with this legislation, should be worked out, in my opinion, before this legislation is passed just so we don't have that chilling effect.

Thank you all for your testimony. Councilmember Jones.

Yeah. I just want to go on record thanking the Wilson family for their dedication to small business. Their Lansdowne Avenue office, I used to do -- I used to be responsible for delivering the payroll to them, who did the accounting for the House of Umoja, and that Treasury check that I talked about was because you guys did that. And is it grandparents? That's 3/20/24 - COMMERCE - BILLS 240019 & 240087 Salter. Yeah, Jeanice. Oh, gosh. I feel horrible now. You're making me feel old, sir.

I went to camp with your grandson, sir -- I mean, with your son.

And did I hear you say you have ten offices in neighborhoods?

Six.

Six. And that's incredible for that longevity. That's uncommon in business in general, but in fact for small Black and brown businesses from the neighborhood. So thank you for that. And I would hope that you work with the author to provide your insight to what impacts it has on you and your -- how many employees do you have now?

Right now, about 18.

There you go. So, again, thank your momma, your 3/20/24 - COMMERCE - BILLS 240019 & 240087 grandparents and all of you for what you do.

Thank you. Councilmember Gauthier.

Thank you, Mr. Chair. This question is for Mr. Salter. I don't know your momma or your grand-momma like other people on the Committee, but you certainly seem like an upstanding person. Thank you for your testimony. You talked earlier about providing your costs already up front as a matter of how you do your business. Can you just expound? As a franchise how bound are you by the national practices of Liberty Tax? Because it was our understanding from the national company that those fees are provided right before -- at the end of the process, right before filing.

So we are 3/20/24 - COMMERCE - BILLS 240019 & 240087 franchisees. Liberty Tax corporate gives us recommendations, but as far as how we execute, it could be different at every office. But I will say at a corporate level, they have been pushing up-front pricing this year, but because a lot of franchisees are -- you get stuck in your ways and it's a fear of change with anything, fear of change. So our offices, we jumped on it. We did do it, but it's not the case for everybody or every Liberty Tax across the country. But I'm sure there are other Liberties across the country that are doing it. I can't say what percentage in Philadelphia or just in general, but it has been a recommendation from corporate, but it's up to the individuals' offices to decide how they want to do it.

Okay. I just wanted to sort of clarify that there's a difference between what you are doing locally as an upstanding citizen and providing your cost and what we 3/20/24 - COMMERCE - BILLS 240019 & 240087 understand as the practice of the corporation more broadly. And I also wanted to clarify for the record that this bill does not -- is not requiring a referral. This is about information provided to vulnerable people about what they are entitled to. So I just wanted to clear that up. And then I wanted to thank Mr. Carter for his testimony. I can certainly appreciate that we want Philadelphia to be perceived as open for business, but I do firmly believe that our city's economic strategy cannot be built on extracting hundreds of dollars from people that don't have to put that out, right, that can keep that money in their households and in their neighborhoods.

Can I just respond? I 100 percent agree with you. I don't think anything should be built off the backs of anyone as you just described. What we are talking about is 3/20/24 - COMMERCE - BILLS 240019 & 240087 trying to make sure that we have the environment that's conducive to growth, whether you work for yourselves or for others. And as a city, our largest employers are government, eds, and non-profit eds and meds. Not a lot of business density in the City, because true data and actual anecdotal conversations have said Philadelphia is not a place to be if you want to run a business. And so when we keep on adding impediments on top of trying to grow, that message gets out there even more. I don't think anybody should be railroaded. I don't think anybody -- I do believe that there should be disclosure of fees, to the extent that you can disclose your fees, that you can forecast that, certainly. And the barber shop was mentioned earlier. You walk into the barber shop and he says, you know you go on Broad Street to get your haircut for free, which I pass by the guy every summer, it just doesn't even sound 3/20/24 - COMMERCE - BILLS 240019 & 240087 right coming out of an entrepreneur's mouth. But we want to make sure that people understand how much it costs. I didn't realize haircuts cost $50 now. Back in my day it was 20. $50 -- you know, so that's another bill. You can bring that up later. But I would just say that disclosure of cost is important so people know what they're getting into. You can't assume that all people are bad actors because there are a bad few. We have a bad few residents out here. It doesn't mean all of us are bad residents. And painting that broad brush, which could inhibit their growth and add impediment and send a message that the City of Philadelphia will always add on top of whatever they already have on top of the red tape that you go through to grow your business, is something that we don't want to be known for. We want to change that dynamic and get our city popping again. 3/20/24 - COMMERCE - BILLS 240019 & 240087

Absolutely. But just to close out as a sort of alternate view, this bill at the end of the day is about providing information to low-income residents about free tax preparations that they are qualified for so that they can keep money in their households and in our local economy, which is also a differing view on how we can stimulate our local economy. Thank you.

And having worked in this body for so long, I know when to stop.

Councilmember Young.

Thank you. Thank you. Again, I just wanted to reiterate what Councilwoman Gauthier has mentioned, that this is -- this bill 24 requires a notice, and if you look at other legislation throughout this 3/20/24 - COMMERCE - BILLS 240019 & 240087 municipality and country, notice is required for employers to place in their place of businesses. We require landlords to provide notices to tenants. We require commercial landlords to provide zoning notices about rights. It's just about letting people know what their rights are and what's available to them from a consumer protection standpoint, again. But I do have a question for Mr. Salter or even Mr. David, both of you all. What is the definition of a simple return? Like is that a standard definition or is that something that is a standard in the industry or is it flexible? Like can you describe that?

So the definition of a simple return is what everybody says they have when they walk in. So a definition of simple return to me would be a single W-2 with state and federal withholding. But that's the dilemma in this industry. Everybody, when you talk 3/20/24 - COMMERCE - BILLS 240019 & 240087 to them on the phone, when I talk to them, everybody starts with, I have a simple return, except I had five rentals in the City and I have one in Louisiana. It's not simple anymore. I think that's where the point is missing. It's complexity, complexity. It may take an hour in software, but you still have to know how to do the tax return.

I would agree with that.

Thank you. I guess if they just have a W-2 and that's it, that's simple.

One more question again. It's a similar question I asked earlier. If you could, I guess, provide us with information on, I guess, how many of your employees are actual CPAs and real agents or attorneys versus those just are participating in the annual filing season or those that are just PTIN holders. 3/20/24 - COMMERCE - BILLS 240019 & 240087

So in our model, we have owners who are CPAs, EAs. We have employees who are EAs who have taken it upon themselves to train themselves. I can't give you a percentage of the several hundred employees that we have in the Philadelphia area. If I were to throw a number out to you, I would say one out of ten would be an enrolled agent. As far as CPA and attorney, it would be hard to hire CPA and an attorney to work in a retail tax office.

And, Councilman, I'll see what I can do in terms of getting that data for you at least based off what we have at the Chamber. I just add that when we talked about the notice, absolutely, notice of rights, and I agree with you, are everywhere in all types of entities, but we're talking about notice of competition or other services, which is a little bit different. And I know you get that, and we've talked about it as attorneys. 3/20/24 - COMMERCE - BILLS 240019 & 240087 However, it's a little bit of a nuance there, and we can talk about that further.

I just think that providing -- letting consumers know that they have a right to a free tax preparation service is something that -- I don't see that as a competition to you all, because, again, consumers are going to make the decision ultimately. You're not steering them to it. You're not making them go to these places. We're not mandating that these consumers utilize these VITA sites. We're just letting them know that you have a right to this particular service. It's like when the cops lock you up, they got to tell you what your rights are, right? And we just want to let you know, we want consumers to know what their rights are in this particular space and industry.

And I appreciate that. I appreciate that. I don't know 3/20/24 - COMMERCE - BILLS 240019 & 240087 that it's necessarily a right, but there are other services. And so, yeah, your rights, you should definitely know your rights. I don't know if you have a right to these other services, but definitely we're talking about promoting that there are other options out here.

In the City of Philadelphia, if you make under $64,000 or less, you have a right to utilize the Campaign for Working Families, you have a right to utilize these free services in Philadelphia. That is a right that we as a body, as a city has given to the consumer base by putting money to these places to allow them to utilize those services.

Okay. Thank you. Councilmember Gilmore Richardson.

Thank you so much, Mr. Chair. And I wanted to thank you all 3/20/24 - COMMERCE - BILLS 240019 & 240087 for the testimony you provided. In particular to Mr. Salter, I had to put two and two together, because I also did work with Jeanice Salter, CPA. So I thank you for your longstanding commitment and continued commitment to the community. My only ask is if you could today prior to or at the conclusion of this hearing share additional information with the sponsor, Councilmember Landau, regarding your specific concerns as a Philadelphia-based small business owner, as a sort of generational business, which is very, very difficult to sustain a business for three generations, particularly with a minority business. So I ask that you could please speak with Councilmember Landau regarding your specific concerns so that you can ensure they are registered with her directly. Okay?

No problem.

All 3/20/24 - COMMERCE - BILLS 240019 & 240087 right. Thank you.

Thank you. Thank you all for your testimony. We will now go into public comment. We have two people for public comment. Andy Reid, coach for the Kansas City Chiefs. (Laughter.) (No response.)

Is Andy here? (No response.)

How about Graham O'Neill? (No response.)

Graham O'Neill. I do not see him. We have some written testimony to be added to the record beside we added also the redline legislation, written testimony from Ty Brown, the Office and Community Empowerment and Opportunity, 3/20/24 - COMMERCE - BILLS 240019 & 240087 and we also have PACDC testimony. Before we leave the hearing, we want to have a closing from Councilmember Landau.

Thank you so much. I'll be very brief. First, I wanted to thank all of my colleagues for holding this hearing in the Commerce Committee and everybody who testified today. Just two final points that I wanted to say. One, the government has decided as a policy reason that having free tax services, just like free legal services and sometimes free healthcare, is essential for us to have a thriving population and economy and making sure that we're caring for folks who can't afford it. We cannot compare telling people about free legal services as telling them the burger down the street might be cheaper, which they'd still have to pay for, because we're not subsidizing 3/20/24 - COMMERCE - BILLS 240019 & 240087 burgers down the street or fixing your car or getting a haircut. So just wanted to point that out. And the second thing I wanted to just say that I've been saying all week and remind you now, my door is open. We are still having these conversations. I'm open to all of the conversations. So thank you very much.

Thank you, Councilmember Landau. Great work, and we know you're willing to keep the conversation going and working with Law and the people who testified. Seeing that there's no other questions or no one else to testify, we'll ask that we close the hearing, and I want to thank all the panels of witnesses for their participation. We now go into a public meeting. We have a quorum present. To my left, we have Councilmember Gauthier and Councilmember Richardson. To my right, Councilmember Jones and 3/20/24 - COMMERCE - BILLS 240019 & 240087 Councilmember Young. So there is a quorum. The Chair recognizes Councilmember Jones for a motion on Bill 6 No. 240019.

Thank you, Mr. Chairman. I move that Bill No. 9 240019 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading at our next session of Council. (Duly seconded.)

The Chair notes for the record Councilmember Young seconds the motion. It has been moved and properly seconded that the Bill No. 240019 be reported from this Committee with a favorable recommendation and further moved the rules of Council be suspended as to permit the first reading at the next session of Council. All those in favor signify by 3/20/24 - COMMERCE - BILLS 240019 & 240087 saying aye. (Aye.)

Those opposed? (No response.)

The ayes have it, and the motion carries. The Chair recognizes Councilmember Jones on a motion for Bill 11 No. 240087.

Thank you again, Mr. Chairman. I move that Bill 14 No. 240087 be reported from this Committee with a favorable recommendation and further move that the rules of Council be suspended to permit first reading at our next session of Council. (Duly seconded.)

The Chair notes for the record that Councilmember Young seconds the motion. It has been moved and properly seconded that Bill No. 240087 be reported from this Committee with a favorable 3/20/24 - COMMERCE - BILLS 240019 & 240087 recommendation and further moved that the rules of Council be suspended to permit the first reading of this bill at the next session of Council. All those in favor will signify by saying aye. (Aye.)

The ayes have it. Any nays? (No response.)

The ayes have it. The motion carries. That concludes the meeting of the business for the Committee on Commerce and Economic Development. Thank you all very much for your testimony and attendance. - - - (Committee on Commerce and Economic Development concluded at 11:59 p.m.) - - CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter, and that this is a true and correct transcript of same. -------------------- MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)