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Philly Requiring Bloggers To Pay $300

Posted by CmdrTaco on from the blood-from-blogger dept.

Kurofuneparry writes "Pennsylvania generally and Philadelphia specifically have had a number of budget issues and some bloggers are seeing the results. From the article: '... yes, cash-strapped cities can't very well ignore potential sources of income. But at the same time, there must be some room for discretion and common sense.'"

34 of 456 comments (clear)

  1. Not all bloggers, just those that make money by odies · · Score: 5, Insightful

    So she says he runs a blog with ads and profits from, but is surprised that she actually needs to pay taxes and the other usual legistation while running a business? Yes, just like the Google, IGN or other huge sites on the internet that make money by advertising, he is also running a business.

    It also looks like she only made like $50 between several years. That comes down to like $1-2 a month. Why not just drop the ads and continue blogging? If you really need a few dollars, just find a few bottles from the street and return them to stores.

    1. Re:Not all bloggers, just those that make money by Shakrai · · Score: 5, Insightful

      but is surprised that she actually needs to pay taxes and the other usual legistation while running a business?

      Taxes are assessed as a percentage of your income in most cases. In this instance the city wants to compel her to obtain a "business license" and pay $300 for the privilege, regardless of the fact that the "business" in question didn't even gross that much income. It seems absurd that one should have to get permission from the city before one can write a blog on their home computer.

      --
      I want peace on earth and goodwill toward man.
      We are the United States Government! We don't do that sort of thing.
    2. Re:Not all bloggers, just those that make money by God'sDuck · · Score: 5, Insightful

      Some governments have common sense -- I'm about to shut down my NJ photography "business" because I make less annually than the minimum amount where a business ID is required. Below that, it's legally a "hobby that makes money." You still owe income tax on the profits, but don't need to handle any extra paperwork. Blogging really should be the same...

    3. Re:Not all bloggers, just those that make money by digitalunity · · Score: 5, Interesting

      It's not absurd, it's restraint on speech. To say that you need a business license to use your free speech rights if that earns you a dollar is just absurd. There is likely an income threshold where a business license isn't needed if you don't make enough money.

      She needs a lawyer. If the state laws in PA really are that fucked up and she needs a business license, she could take it to court and it will likely be found unconstitutional.

      If she does get the business license though, she can now write off all business expenses including the time she used to write in the blog. That includes a percentage of her home bills that are a needed as a part of the business.

      Her federal taxable income will go way down and she will be eligible for small business tax deductions and credits.

      --
      You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
    4. Re:Not all bloggers, just those that make money by betterunixthanunix · · Score: 3, Insightful

      There needs to be a little common-sense applied to the operation of governments.

      No, there need to be fewer and better thought out laws. A blanket $300 tax on any blog that makes money, for example, is not well thought out -- a better strategy would be a tax on blogs that turn more than, say, $1000/yr. in revenue, or perhaps a tax that cannot exceed the amount of money a blog made. Or perhaps not taxing blogs, and looking at other ways to reduce the budget gap (perhaps spending less on drug enforcement and other nonviolent crimes).

      Of course, there may be other things at work here. Like, lawmakers assuming that people fit into neat categories, and then passing laws that essentially enforce those categories.

      --
      Palm trees and 8
    5. Re:Not all bloggers, just those that make money by Shakrai · · Score: 5, Insightful

      You just need to get a business license if you're making money with it

      That's absurd. Business licenses should only exist to generate the revenue required to regulate businesses that can harm the public. As an example, restaurants require safety inspections to ensure that they are preparing their food in a safe manner. Those inspections cost money. Requiring them to obtain a license to offset the cost of these inspections makes sense.

      In this instance it's just silly. A blog can harm no one. It can't cause your street traffic to increase or your property values to go down as a brick and mortar business can. Government regulation is neither needed nor permissible in this case.

      She can pay income taxes on her blog ads without needing a business license. I'm sorry, but I just don't see a way you can defend the requirement that someone obtain an expensive license from the city before they can publish their thoughts on the world wide web.....

      --
      I want peace on earth and goodwill toward man.
      We are the United States Government! We don't do that sort of thing.
    6. Re:Not all bloggers, just those that make money by Anonymous Coward · · Score: 4, Insightful

      Keep your public outrage. It's not like we're talking about a small front-lawn lemonade stand. The kid made almost 2000$. At 50c each, that amounts to 4000+ sold drinks. Plus the stand was on a public fair (regularly if I understand it correctly). At that volume it is reasonable to start to apply professional rules.

    7. Re:Not all bloggers, just those that make money by Lord+Byron+II · · Score: 5, Insightful

      Have you ever sold a book on Amazon? Or a knick-knack on eBay? Or run a website with ads? Or held a garage sale? Or sold a couch on Craigslist?

      Those are all sources of income and you are required, by law, to report them. And if you did so in Philly, you would be required to buy a $300 business license.

      But most of us don't bother to report such small transactions, so yes, she is being punished for her honesty.

    8. Re:Not all bloggers, just those that make money by blackraven14250 · · Score: 3, Insightful

      It's not absurd, it's restraint on speech. To say that you need a business license to use your free speech rights if that earns you a dollar is just absurd.

      It would be absurd - If this were actually a restraint on speech. If she dropped the ads (and thus the profits), she wouldn't have to get a business license, and would still have a blog with full free speech rights.

    9. Re:Not all bloggers, just those that make money by Kalidor · · Score: 3, Informative

      Sadly, this won't work if she's a citizen and not a greencard holder. The US is one of the countries that taxes income based on both citizenship AND residency.

      Doesn't matter if you are outside of the US, the IRS will ask for it's cut unless you are in a country that has a tax treaty with the US (and you fall within the terms of said treaty). Even then, most of the treaties require proof of payment with respect to the taxes due in the other country or the IRS still takes a cut.

      If you are in a country without a tax treaty, then you are out of luck as most countries tax based on residency, therefor you are double taxed by the country where the work is done, and the US.

      --

      Code softly but carry a big magnet.

    10. Re:Not all bloggers, just those that make money by rednip · · Score: 3, Insightful

      It also looks like she only made like $50 between several years

      Yea, once she's done writing off all of her 'business expenses', website expenses, home office, computer equipment, (maybe even) a second car, travel & entertainment, etc. Just because you don't make any money, it doesn't mean that you aren't running a business.

      Of course $300 sounds like a rather high price for a business license, particularly for an enterprise which might not take in more than $20,000/ year. Seems to me that Philly would be well advised to graduate it based on revenue and/or claimed expenses.

      --
      The force that blew the Big Bang continues to accelerate.
    11. Re:Not all bloggers, just those that make money by iamwahoo2 · · Score: 4, Informative
      In the article, it explicitly states that she does not run a business, which would make blogging a hobby at which she makes a small amount of income. As long as she declares this as part of her personal income, then this is perfectly legal. The business privelige license is for businesses (according to the cities' own website), so it makes no sense that she would need to purchase this license, or pay taxes as if she were running a business.

      To make matters more difficult, if she were to attempt to declare this as a business, the IRS would expect her to demonstrate that she intends to turn this into a profitable endeavor, because running a home based business offers tremendous tax benefits and they try to crack down on the number of people who attempt to declare their hobby as a business.

      In summation, It looks like the some of the City of Philadelphia employees do not understand their own laws, or tax law, on a most basic and simplistic level.

    12. Re:Not all bloggers, just those that make money by stdarg · · Score: 4, Insightful

      Sounds more like the kid needs to be congratulated and helped. Rather than shut the girl's "business" down, why didn't the government do something like help her come up to code? It would have been a much better public relations maneuver.

    13. Re:Not all bloggers, just those that make money by KindMind · · Score: 3, Insightful

      Taxes are one thing - I agree with you there. But the business license is based on where the business is. If the hosted content is outside the Philadelphia area, I don't see how they could enforce a business license. Like if I live in Philadelphia, but I own an auto parts business in Pittsburgh, Philadelphia can't charge me for a business license. I don't see how this is any different. On a side note, how does Philadelphia even know what she paid in taxes? That should be confidential information between her and the state and the IRS.

      --
      Politicians complicate life - logic is sacrificed on the altar of political expediency.
    14. Re:Not all bloggers, just those that make money by Skraut · · Score: 3, Interesting

      Net Income != Profits. She probably didn't make enough to pay for her hosting. Perhaps we need to go back to the model where people get free hosting in exchange for a 3rd party putting ads on the site. Then Bloggers can blog without having to report the "income" of trying to cover some of their expenses.

      --
      Introducing Microsoft Vacuum 1.0 The first Microsoft product that doesn't suck.
    15. Re:Not all bloggers, just those that make money by cptdondo · · Score: 4, Informative

      The kid made the money *after* they tried to shut her down, and the local businesses stepped in and gave her tons and tons of free publicity. Until her lemonade stand hit the papers, she was just another kid making a few $ a day.

      RTFM - Les Schwab and a TV station stepped in and promoted her.

    16. Re:Not all bloggers, just those that make money by hedwards · · Score: 3, Informative

      Until, people start winding up at the hospital with food poisoning. The rules surrounding food distribution exist for a very good reason. If you've ever suffered the effects of food poisoning you'd understand why it's so serious.

    17. Re:Not all bloggers, just those that make money by sglewis100 · · Score: 4, Informative

      Net Income != Profits.

      True, but not relevant. When I formed an LLC for my consulting side practice, nobody asked me if I had clients. Presumably, they could care less. Either way, I had to pay the cost of filing.

    18. Re:Not all bloggers, just those that make money by novium · · Score: 3, Interesting

      The issue with the lemonade stand, as I recall, was not tax issues but rather the lack of a temporary vendor's license from the health department. Which is quite reasonable if you have a booth at a farmer's market type-thing and serving a business-level number of customers. That's not a kid on a corner selling lemonade. That's an honest-to-god vendor, unless you think she was able to haul down all the stuff needed for a booth at those kind of things herself?

    19. Re:Not all bloggers, just those that make money by kevinNCSU · · Score: 4, Insightful

      No, you only report capital gains. So unless you you're selling that book/couch/garage sale item/knick-knack on ebay for more than you bought it for it needn't be reported. This is also why you don't have to report selling a personal used car - there usually aren't any gains.

    20. Re:Not all bloggers, just those that make money by Anonymous+Brave+Guy · · Score: 4, Insightful

      just so they get the opportunity to aggravate the hell out of the IRS.

      My money's on the tax man. Any takers? :-)

      --
      If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
  2. Bad Summary in OP by Stormy+Dragon · · Score: 5, Informative

    If you RTFA, the $300 is the Philadelphia business privelege tax, so she's not being forced to pay for blogging, she's being forced to pay for blogging for money. Which is perhaps ridiculous, but no less ridiculous than it is for any other person in the city who has to pay it.

    1. Re:Bad Summary in OP by rolfwind · · Score: 3, Interesting

      Anything that doesn't aim to recoup it's own costs, let alone make a profit isn't a business. This intent is fully visible, that operating several years with loss, that she goes on funding her hobby without making changes.

      But two wrongs don't make a right. Philadelphia has been losing population since the 1950s, partly with shit like this. In fact, all of PA has budget troubles, but not because the government doesn't rake enough cash in, but in both cases because of having too many union workers, ridiculous pensions, and spending too much. In fact, they are raising the school taxes here because of the losses in the 2008-9 stock market decline and apparently the teachers can gamble in the market and never lose. I believe Philly too was looking how to recover cityworker pensions though increased taxes? But who will bail out the taxpayers?

      And whoever wrote the line in the summary "yes, cash-strapped cities can't very well ignore potential sources of income." Fuck you. The taxpayers are not some piggybank to be siphoned off at will. There are very few places I see that really cut spending even though the private sector does. The governments' job used to be to carry out it's limited enumerated duties and impose a tax needed to cover it, not maximize it's own revenue.

  3. Re:So if you post on any forum you need to pay $30 by ironjaw33 · · Score: 3, Funny

    TFA is a bit confusing on this point -- it mentions something about income on a tax return, but that's about it. I'm deducing that if you bring in any ad revenue from a blog and you report it in your tax return, you're obligated to purchase the $300 business licence. Since US income taxes are limited to state and federal, I'm not sure how a municipality would enforce this. Also, I keep an informal blog that isn't ad supported -- it costs me money to run. If I were a Philly resident, would I be expected to get a business licence for that?

  4. Lesson learned? by Bai+jie · · Score: 4, Insightful

    It seems that the state only knows about these bloggers because they reported income made from blogs on their taxes. Seems like the lesson here is to not report small gains on your taxes else your state will fleece you.

    This is sad because these people did pay taxes on this tiny amount of income already on their income tax. By trying to be good citizens and play by the rules they are rewarded with a fee that would either put them out of business or make them less honest about their income in the future.

    1. Re:Lesson learned? by Shakrai · · Score: 4, Informative

      $600, not $20,000......

      --
      I want peace on earth and goodwill toward man.
      We are the United States Government! We don't do that sort of thing.
  5. Not completely outragious... by bleh-of-the-huns · · Score: 4, Insightful

    I'm sure I will get flamed for this..

    While I personnaly do not consider people blogging, to be business entities, I do not make up the rules. Whether or not the rule is flawed here is not the point, until said rule is changed people will have to abide by it. I consider a blog by a corporate entity an extension of the business they are running or services they are providing.

    That being said, there should be some common sense involved when enforcing it based on the amount of income a blog generates. In the case of those referenced in to article, making them pay seems a little ridiculous.

    --
    I came, I conquered, I coredumped
    1. Re:Not completely outragious... by oodaloop · · Score: 4, Insightful

      Unless she is incorporated, it should be considered a personally owned business. Do 17 year olds who mow their neighbors' lawns have to pay this fee? Paying tax on the income ($50) makes sense, but paying $300 for being a business doesn't.

      --
      Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
  6. She has a very good case by mmontalvo · · Score: 4, Interesting

    The IRS would consider this to be nothing more than a hobby. They define a business as an entity that is expected to make a profit. This clearly would not be expected to make a profit.

  7. Inevitable taxing of the free money by hessian · · Score: 4, Insightful

    All those ads, Examiner.com payments, "send paypal donation" buttons, etc. have been untaxed income for a long time. All that's happening now is that states are awakening and correcting the balance.

    Asking for a business license so that you can publish content and be paid for it is not an unfair thing. In fact, it's fair to those who want to sell hot dogs instead, and also have to get licensed as a result.

    --
    Futurist Traditionalism
    1. Re:Inevitable taxing of the free money by Bruha · · Score: 3, Insightful

      I'm willing to bet the hot dog man makes more than 50 dollars a year off hot dogs.

  8. Slippery slope by Wonko+the+Sane · · Score: 3, Insightful

    This kind of result is to be expected once you concede the point that a person requires permission from the government (a license) in order to engage in commerce.

    Once you have agreed to be a serf it's hardly surprising when you get treated like one.

  9. Re:A better way to screw the city ... by bem · · Score: 5, Insightful

    However, since she can prove she loses money, she should ask the city to exempt her from ALL municipal taxes, as she is obviously a non-profit.

    Being unprofitable is not the same as being a non-profit.

  10. Being an (ex) blogger from Philly.... by xandercash · · Score: 5, Informative

    Being from Philly, I have had similar experiences. In my case, my website was registered to a Philly address, so they automatically sent out the "you must have a business license" letter. I was making no money. It's their number one automatic letter. My 3 year old daughter got one, once, even. (we're not sure how, in that case). All a person has to do is call the number on the letter and say "this isn't a business" and they'll put a check-mark in the "not a business" box. They don't care about the miniscule $50 every two months businesses. Just the profitable ones. This is why, when I lived in Philly, I always had a PO box or location outside the limits for business/website purposes. Mostly to avoid the hassle. The current township I live in is MUCH more reasonable, thankfully.