Kenney said the tax incentives - backed by the Greater Philadelphia Chamber of Commerce and said to be the first offered by a major city - were the heart of the bill.
The bill features two tax credits. One is for businesses that extend health benefits to employees' life partners and their children, the same as they would to spouses and children. The second is for companies that make health coverage available for transgender care.
Kenney said 42 percent of the jobs in Philadelphia offered coverage to domestic or life partners; less than 10 percent have transgender health coverage.
"The city should treat all of its employees the same, but for private-sector companies, we try to get them to do the right thing," Kenney said. "The way you do that is to incentivize them, not penalize them."
The bill passed by a 14-3 vote, with Republican Council members David Oh and Brian J. O'Neill and Democrat Bill Green voting against.
Nutter plans to sign the bill into law, his spokesman said.
Mark Segal, publisher of the Philadelphia Gay News, heralded the vote as another milestone for the city's LGBT community.
"I sat there in amazement, awe, and just pure emotion," he said of the vote. "It's one of the strongest pieces of legislation in the country in support of the LGBT community."
Segal compared Thursday's relatively uncontroversial vote to the raucous protests that accompanied the first "gay rights" bill more than 30 years ago, banning discrimination on the basis of sexual orientation.
Since then, he said, Philadelphia has been in the vanguard of protecting the rights of the LGBT community.
Last year, the Human Rights Campaign surveyed municipal laws affecting the LGBT community across the nation. Philadelphia was one of 11 cities to score 100 percent, Segal said, and with bonus points was judged the most progressive city on LGBT issues.
"This is what a giving, caring city does," he said. "We're making this a city where young, vibrant people want to come."
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