The city of Philadelphia is going micro. The cash-strapped city has decided one way to increase revenues will be to require all bloggers to acquire a business license. All blogs with profit making potential via ads or other means must apply for the $50 a year ($300 for lifetime) licenses, no matter how micro the profits from the blog are.
The Philadelphia City Paper cites the example of blogger Marilyn Bess who writes a blog on green living. According to the report, Bess makes a profit of about $50 a year on the work she considers a hobby. But the city would like its share. Any Philadelphia blogger who reports their earnings (no matter how meager) has been asked by the city to pay the $300 for what the city calls a "privilege license" plus taxes.
The City Paper reports that from the city's point of view, they have a right to collect on any business engaged in "activity for profit," says tax attorney Michael Mandale of Center City law firm Mandale Kaufmann. This applies "whether or not they earned a profit during the preceding year," he adds. Business licenses are required for any business located within an incorporated city's limits. According to Andrea Mannino of the Philadelphia Department of Revenue, in fact, simply choosing the option to make money from ads -- regardless of how much or little money is actually generated -- qualifies a blog as a business.
With the economy still struggling and the federal government trying to lend assistance to small businesses, does it make sense to slow the potential for growth, even in the smallest of small businesses in the city of Philadelphia? Not to City Council members Bill Green and Maria Quiñones-Sánchez. According to the City Paper, in June they proposed a reform the city's business privilege tax to make Philly a more attractive place for small businesses. The proposed bill will still require Philadelphia bloggers to get a privilege license if their sites are designed to make money, but they would no longer have to pay taxes on their first $100,000 in profit.
For now, Philly bloggers can choose not to have an revenue-generating ads on their sites if the blog is really just a hobby, or to pay the baseline $50 a year license fees. Or, they may choose to blog out in the wide world -- beyond the Philly city limits.
- Cash-strapped Philly: Bloggers must pay for business license (New York Daily News)
- Starting a Business: License and Permit Checklist (FindLaw)
- State Guide: Obtaining Licenses & Permits (FindLaw)
- What is a Franchise License? (FindLaw's Free Enterprise)
- Kid's Lemonade Stand Shut Down by County Inspectors (FindLaw's Legally Weird)
- Tax Evasion and Failure to File: An Overview (provided by The Law Firm of John R. Teakell)
- Business Organization & Transactions E-Newsletter (provided by Wang, Hartmann, Gibbs & Cauley, P.L.C.)