My basic rule of thumb is that if the the bill come from a government office of taxation, and that if you fail to pay the amount they can put a tax lien on the property it is a tax.
for you the complication is in Pub530:
Assessments for local benefits.
You cannot deduct amounts you pay for local benefits that tend to increase the value of your property.
Local benefits include the construction of streets, sidewalks, or
water and sewer systems. You must add these amounts to the basis of
your property.
You can, however, deduct assessments (or taxes) for
local benefits if they are for maintenance, repair, or interest
charges related to those benefits. An example is a charge to repair an
existing sidewalk and any interest included in that charge.
If only a
part of the assessment is for maintenance, repair, or interest
charges, you must be able to show the amount of that part to claim the
deduction. If you cannot show what part of the assessment is for
maintenance, repair, or interest charges, you cannot deduct any of it.
An assessment for a local benefit may be listed as an item in your
real estate tax bill. If so, use the rules in this section to find how
much of it, if any, you can deduct.
I have never seen a tax bill that said this amount is for new streets, and the rest i for things the IRS says you can deduct. The issue is that if the Center City tax bill is a separate line or a separate bill then does it count. I would go back to the first line of the quote from Pub 530:
You cannot deduct amounts you pay for local benefits that tend to
increase the value of your property.
Then I would look at the quote from the CCD web site:
The Center City District (CCD) is a business improvement district. Our
mission is to keep Philadelphia's downtown, called Center City, clean,
safe, beautiful and fun. We provide security, cleaning and promotional
services that supplement, but do not replace, basic services provided
by the City of Philadelphia and the fundamental responsibilities of
property owners.
CCD also makes physical improvements to the downtown, installing and maintaining lighting, > signs, banners, trees and landscape elements.
and later on the same page:
CCD directly bills and collects mandatory payments from properties in
the district. CCD also receives voluntary contributions from the
owners of tax-exempt properties that benefit from our services.
The issues is that it is a business improvement district (BID), and you aren't a business:
I did find this document from the city of Philadelphia explain how to establish a BID:
If the nature of the BID is such that organizers wish to include
residential properties within the district and make these properties
subject to the assessment, it may make sense to assess these
properties at a lower level than a commercial property, both because
BID services and benefits are business-focused, and because
owner-occupants often cannot treat NID assessments as tax-deductible
business expenses, like commercial owners do. Care must be taken to
ensure that the difference in commercial and residential assessment
rates is equitable, and complies with the requirements of the CEIA.
from the same document:
Funds for BID programs and services are generated from a special
assessment paid by the benefited property owners directly to the
organization that manages the BID’s activities. (Note: many leases
have a clause that allows property owners to pass the BID assessment
on to their tenants.) Because they are authorized by the City of
Philadelphia, the assessment levied by the BID becomes a legal
obligation of the property owner and failure to pay can result in the
filing of a lien.
I have seen discussion that some BIDS can accept tax deductible donations. This means if a person itemizes they can deduct the donation. I would then feel comfortable deducting the tax because:
- they can place a lien on your property if you don't pay
- Voluntary contributions are deductible, for instance from tax-exempt property owners.
- Business can deduct it.
If you can't deduct it that would mean the only people who can't deduct it are home owners.
So deduct it. (keep in mind I am not a tax professional)
