Philadelphia Taxes Bloggers… And Hot Dog Vendors, And Lemonade Stands, And…

The internet got very, very mad at Philadelphia this week:

So, this little story intern Valerie Rubinsky wrote about the city hitting up small-time bloggers for a $300 business privilege license has sort of exploded on the Interwebs, from the New York Daily News to Yahoo to Michelle Malkin to freaking nutball conspiracy site Infowars (!) to Fox 29 — which did a piece on it without, you know, mentioning where their brilliant story idea came from. (What’s that word for ripping off a story without attribution again?)

Kudos to you, Valerie Rubinsky, for finding a story that combines two things people like to rant about on the internet — blogs and taxes — with something that everyone likes to make fun of: Philadelphia.

Of course, it’s not really a tax on bloggers per se, it’s a lifetime licensing fee ("business privilege tax") imposed on any business within the City limits. The City just started getting clever about it and monitoring federal tax returns to see if people reported any income on the side, and, if so, hit them with the BPT. Some of those people turned out to be bloggers.

Some commentators — bloggers even! — see it as another cost of doing business:

Understandably, some Philly bloggers — particularly those who have received notices requesting payments for the BPT license — are extremely irate about this tax. After all, it does seem ridiculous when the cost of the license vastly exceeds the revenue generated by a blog.

Still, it’s important to note that this tax provision is not singling out bloggers. Freelance writers are also affected by this provision, as is any other contract worker who primarily operates within the city limits. The Business Privilege Tax is oft-criticized and members of the City Council are planning on introducing a bill in September that makes some changes to the program.

Additionally, although the $300 license fee is steep, it is a lifetime license. After the license is paid, the tax rate on either gross receipts or taxable net income is pretty low. If a blogger truly intends to try to earn income or revenue off his or her blog, it’s only fair to adhere to the tax policies in the city where they operate.

But the whole issue does raise a fair question: why do we have a business privilege tax in the first place? 

As Rob Pegoraro says at the Washington Post:

Kidding aside, there are real policy issues here. The city government put itself into this box with a law requiring anybody running a business of any sort to pay for this license, so bloggers running ads next to their copy shouldn’t be exempt if the requirement also applies to people selling old junk on eBay, collecting an ad-revenue share from funny cat videos posted on YouTube or hawking custom t-shirts at CafePress. For that matter, I wouldn’t object to Philly taxing transactions in FarmVille… but maybe that’s just me.

In other cities, no such problem exists. The District, for example, only requires a business license for activities that would require other forms of oversight, such as food sales or rental housing. Blogging and other sorts of writing are free from that requirement, although if you make real money from your blog–hey, stop laughing!–D.C. will want its share.

I think Washington, D.C. has it right. While there plenty of reasons to impose general taxes on the population — I, for one, have no trouble paying both wage taxes and sales taxes in exchange for having, e.g., policemen and firemen available at my beck and call — an arbitrary tax on microbusinesses, the proprietors of which are are already being taxed through other general taxes, just doesn’t make any sense. Blogging isn’t like owning a car or operating a hot dog stand; there’s no additional licensing or regulatory framework that needs to be funded to monitor the activity.

No need for monitoring, that is, in terms of compliance with the law. In terms of quality…

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