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Philly’s Blog Tax: You’re Mad for the Wrong Reasons

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money

Last week, Valerie Rubinsky of the Philadelphia City Paper broke a news story that’s been getting national attention. Bloggers in this city are now required to purchase a $300 business license if their blog is designed to make money. For many bloggers, that price far exceeds the amount of money they make on their blog. Heck, even if they take the $50 per year option instead of the one-time $300 option, many bloggers are still losing money every year.

Keep in mind that this is on top of local taxes any blogger has to pay on earnings. For some bloggers, this may mean they have to shut down their blogs.

To say that this is an unpopular law is an understatement. I’m seeing bloggers across the country tweeting about it, outraged at the idea that hobby bloggers will have to buy a license. That’s typically the initial reaction whenever people have to pay more in taxes.

I’m not a tax professional. Not at all. If you want a tax professional, head to taxgirl, who is, coincidentally, from Philly. So, if you think I’m misinformed on any of the below points, please, please, please correct me. I’ve spent some time reading about this issue, doing the best research I could do in a limited time, and this is my main conclusion:

Ya’ll are mad for the wrong reason.

I get it. No one wants to pay more money. Everyone is already responsible for paying taxes on any income they earn from blogging, and this seems like overkill. But if you really are outraged by this law, you should have been fighting for small business rights a long time ago.

Hear me out.

Point One: This isn’t a new law.

This is a law already in place that they are newly trying to enforce. Yes, I do believe its because the city needs money, not because they feel like some great injustice is occurring. That doesn’t change the fact that businesses in Philadelphia have been required to buy a license for…well, I can’t find a date when this policy was first put into effect, but before last week! What is new is the fact that they are now identifying bloggers as business owners, whereas they did not before.

Point Two: Bloggers ARE business owners.

Not every blogger is a business owner, of course, but if you’re actively trying to make a profit on your blog, you certainly are! I’ve fought tooth an nail to be considered legitimate, to teach people that blogging is not just about having an online journal. Heck, there’s even a panel at BlogWorld about how to treat your blog more like a business. The definition of business is “commercial enterprise: the activity of providing goods and services involving financial and commercial and industrial aspects.” If you make money from your blog, even just a little, you’re providing goods (content) for money. Go ahead and argue with me that I’m not a business owner. I will claw out your eyes.

Point Three: Not every business is successful.

Let’s say a new restaurant pops up in your community. After about a year, the owner declares bankruptcy because they haven’t been successful at making money. Does that mean that they weren’t actually a business? No way. Businesses try to make money, but it doesn’t mean they aren’t a business if they don’t actually make any money or make only a small amount. So if you’re a blogger trying to make money, it shouldn’t matter how successful you are. You’re a business, the same way a failed restaurant is a business.

Point Four: The world isn’t fair.

Businesses, including bloggers, have to pay for a business license in Philly. They don’t have to in other jurisdictions. That’s not fair.

Dude. The world isn’t fair. No matter where you live, there’s going to be something that isn’t fair about it. It’s not fair that I have to pay for trash removal when my friend, who lives a few towns over and pays the same tax rate, has his trash picked up for free. It’s not fair that my parents have to pay more money for Internet service than I do because they live in a rural area. It’s not fair that people in some counties of Pennsylvania have to pay for an annual emissions test on their car, while people in other counties do not.

I am not saying that you should just live with it. If you disagree with the fact that Philly requires a business license, you don’ t have to live there. Move outside of the city limits. I know that’s not an easy thing for many people to do, but we all get to choose where we live. No one’s holding a gun to your head and making your live in Philly, so if you don’t agree with the city’s policies, don’t live there.

Or, better yet, head to the polls and vote for people who make policies that fall in line with what you believe. Get out there and support Bill Green and Maria Quiñones-Sánchez in their quest to change this law so that a clear line is drawn between what is and what is not a business. But don’t do so because you don’t think it’s fair for you to have to pay for a license. Do so because you think it is the most fair option for all businesses in the city, both online and brick-and-mortar.

Point Five: It is really easy to not be a business.

The last point I want to make is this: if you honestly don’t consider your blog a business, you should have no problem taking down your advertising. From what I’ve read, Philly is not saying that hobby blogs with no form of income have to buy a license. The city is only requiring to purchase the license if you make money some way. So, if you made $10 in the past year and are outraged that someone would consider you a business because it’s only $10, remove your ads and truly be a hobby bloggers. After all, in your own words, it was only $10.

If that thought makes you mad, if you believe you have the right to make back some money for the content you provide on your blog, congratulations – you are a business. Yes, you absolutely have the right to make money – just remember that in Philly, the law says you have to be licensed to do so, no matter how much money you make.

I hope I haven’t created too many enemies with this piece. Even some of the other people here at BlogWorld may not agree with me on this one. It certainly is a hot topic right now, and whenever people are told they owe money, it’s an involuntary reaction to go on the defense. As it is written, the law isn’t fair, in my opinion…but there needs to be a threshold in place for all businesses, not just bloggers.

Allison Boyer is a writer for BWE’s blog and the owner/manager of After Graduation. She’s promises not to claw out your eyes if you disagree with her, only if you tell her she’s not a legitimate business owner. Disagreeing (in a mature way) is as encouraged as showing support!

Allison Boyer freelance writer and content marketing consultant. She also runs the food blog The PinterTest Kitchen with her mom and sister. You can follow her shenanigans on Twitter (@allison_boyer) or contact her at allisonmboyer@gmail.com.


Feedback

7
  • PacoDG

    “if you honestly don’t consider your blog a business, you should have no problem taking down your advertising.”

    Well written. Had an argument with co-workers about this topic. Having a *slight* bloggy background in me, I felt that the tax is right (not that I enjoy it), but they are in the right.

  • Kirsten Wright

    I think you have made some awesome points – and I absolutely agree with the law, now that I have done more research. Of course at first I thought it was rediculous (we all did) but after spending some time looking at it like you did, and then reading your thoughts, it just makes sense. Will this be an unpopular belief? Sure. Does that make it wrong? Nope.

  • Brandon Eley

    I’m curious, since a blog has no physical location, how are they enforcing that these bloggers are required to pay for this business license IN Philly? Would it be possible to somehow get a mailing address (i.e. MBE) somewhere else for the business?

    I understand getting a local business license when you have a local presence… but a blog is virtual and the only thing that is local is the owner. I could live in Philly and own businesses all over the country, would I have to buy a local Philly business license for each of them?

    I’d love to see the actual law. You can bet someone is going to challenge it in some way, shape or form.

    • ShortWoman

      My understanding (I think it was in the CNN article) is that they looked at the Federal tax returns of people whose physical address is in Philly. If the taxpayer declared income on the 1040 as a business and didn’t pay for a city license fee, they got the nastygram. This rather supports the author’s point: the bloggers in question considered themselves a business enough to declare the $10 they made on their taxes, but couldn’t be bothered to get the required city license?

  • Amy Phillips

    I completely agree with you on these points. It is a glaring example of how laws have not kept pace with technology, would love to see the end result of this.

  • Amy Parmenter

    Allison…what an amazingly well-written perspective/argument. as i believe you know, i am both a reporter and a blogger. I kind of have dual citizenship in phila and connecticut and work for news outlets in both. i have forwarded your post to my news director and editor in phila. so that maybe they will cover the story from that perspective. you rock!

    Amy parmenter
    http://www.TheParmFarm.com

  • Amy

    As a philly girl at heart…I have to include this article. Phila. Mayor says he is NOT singling out bloggers. Only asking that any freelancer who reports income on a federal tax return, also pay the city licensing fee.

    http://kyw.cbslocal.com/2010/08/25/nutter-says-hes-not-singling-out-bloggers-for-unpaid-taxes/

    This should not take away from Alison’s well made point!

    Amy Parmenter
    TheParmFarm.com

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