23 August 2010

Off-Topic: Philadelphia proposes "blogging license"?

A diversion away from beer for the moment: According to this report from the Philadelphia City Paper, passed on by the Washington Examiner and Instapundit, the City of Philadelphia is going after bloggers to force them to ante up $300 for a business privilege license:

For the past three years, Marilyn Bess has operated MS Philly Organic, a small, low-traffic blog that features occasional posts about green living, out of her Manayunk home. Between her blog and infrequent contributions to ehow.com, over the last few years she says she's made about $50. To Bess, her website is a hobby. To the city of Philadelphia, it's a potential moneymaker, and the city wants its cut. In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license.
"The real kick in the pants is that I don't even have a full-time job, so for the city to tell me to pony up $300 for a business privilege license, pay wage tax, business privilege tax, net profits tax on a handful of money is outrageous," Bess says.
It would be one thing if Bess' website were, well, an actual business, or if the amount of money the city wanted didn't outpace her earnings six-fold. Sure, the city has its rules; and 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.
When Bess pressed her case to officials with the city's now-closed tax amnesty program, she says, "I was told to hire an accountant."
She's not alone. After dutifully reporting even the smallest profits on their tax filings this year, a number — though no one knows exactly what that number is — of Philadelphia bloggers were dispatched letters informing them that they owe $300 for a privilege license, plus taxes on any profits they made.
Even if, as with Sean Barry, that profit is $11 over two years.
Barry's music-oriented blog, Circle of Fits, is hosted on Blogspot; as of this writing, its home page has two ads on it, but because he gets only a fraction of the already low ad revenue — the rest goes to Blogspot — it's far from lucrative.
"Personally, I don't think Circle of Fits is a business," says Barry. "It might be someday if I start selling coffee mugs, key chains or locks of my hair to my fans. I don't think blogs should be taxed unless they are making an immense profit."
The city disagrees. Even though small-time bloggers aren't exactly raking in the dough, the city requires privilege licenses for any business engaged in any "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.
Mannino says the city doesn't keep track of how many bloggers and small-website owners are affected. But bloggers aren't the only ones upset with the city's tax structure. In June, City Council members Bill Green and Maria Quiñones-Sánchez unveiled a proposal to reform the city's business privilege tax in an effort to make Philly a more attractive place for small businesses. If their bill passes, bloggers will still have 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. (If bloggers don't want to fork over $300 for a lifetime license, Green suggests they take the city's $50-a-year plan.)
Their bill will be officially introduced in September. "There's a lot of support and interest in this idea," Green says.
Perhaps, but it doesn't change the fact that the city wants some people to pay more in taxes than they earn. "I definitely don't want to see people paying more in taxes and fees than what [we] earn," says Bess. "But I do think the city needs to establish a minimal amount of money that they won't tax, whether you're a bike messenger, microblogger or a freelance typist."

The article's comments are an interesting debate.

Now, never mind that I've never hosted any advertising on this blog, and have no plans to, nor that I don't live in Philadelphia.  This, simply put, is an outrage.  It theoretically allows the city to selectively go after any blog with which it disagrees politically and pursue them for monies (that may or may not exist) in an effort to shut them down, even if there's no proof of any income.

Fine.  Here's my accounting, just in case, you know, Baltimore gets similar inspiration:

GIFTS/SERVICES IN KIND (includes free samples of beer/books/etc., admissions to festivals, etc. on the basis of this blog exclusively): >$100 for FY 2010
EXPENSES: Blog's share of transportation for writing (shared with Mid-Atlantic Brewing News stories) <$200/year
Blog's share of purchases of beer to write about (including gratuities to servers): <$200/year

So this blog is "in the red" at least $300 a year.  Guess I'd better apply for a government bail-out, if you ask me.  Or maybe we can just cut out the government middleman, and you can buy me a beer.  (^_^)

(And, yes, before you ask, my writing and photography income IS reported on my tax returns.)

UPDATE: Editorial on the topic from Investor's Business Daily.

No comments: