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Philly Requiring Bloggers To Pay $300 456

Posted by CmdrTaco
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.'"
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Philly Requiring Bloggers To Pay $300

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  • by odies (1869886) * on Monday August 23, 2010 @09:50AM (#33340196)

    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.

    • Re: (Score:3, Insightful)

      by Lord Byron II (671689)

      The problem is that on her taxes, she was asked to list all sources of income. She was honest and listed the blog. Now, she's basically being punished for being honest.

      This is like the kid's lemonade stand that got shut down by the health department in Washington or Oregon earlier this month.

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

      • by God'sDuck (837829) on Monday August 23, 2010 @09:59AM (#33340328)

        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...

      • by betterunixthanunix (980855) on Monday August 23, 2010 @10:07AM (#33340482)

        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.

      • by VJ42 (860241) *

        Now, she's basically being punished for being honest.

        Indeed. Here in the UK her local tax office would probably tell her not to bother with a tax return* whilst technically she could be counted as self employed so would probably need to file one, it would end up costing more to collect the tax than they recovered.

        *Most people here don't need to [hmrc.gov.uk] fill in a tax return as tax is collected through PAYE [wikipedia.org]

      • Re: (Score:3, Insightful)

        by Yaa 101 (664725)

        And the common sense is not to be honest to the government since they aren't honest to us to begin with, because most are chosen as a result of lies.

    • No, this is ridiculous. I hope she fights this in court and doesn't capitulate.

    • by Shakrai (717556) * on Monday August 23, 2010 @09:57AM (#33340290) Journal

      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.

      • 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.

      • Re: (Score:3, Interesting)

        by rwv (1636355)

        I seems absurd that one can operate a webpage that serves advertisements that don't generate enough review to afford basic cost-of-business fees.

        If I sold cupcakes from my kitchen, but only earned $50/year... I may not stop making cupcakes but I'd throw in the towel pretending that I'm operating a business.

        To bloggers who make a pittance serving ads on their blogs... TAKE THOSE ADS DOWN!

        • This is offtopic, but you really don't want to start selling cupcakes from your kitchen (at least if you are in the USA). The rules and regulations are fairly rigorous because the potential for harm is so high. There are lots of great home based businesses to start - cooking or dealing with food in any form is not one of them.

    • what if the ad's pay for the website costs and $1-$2 is left over each month?

    • If I make $50 from a garage sale, should I have to get a business licence?

      • by Zerth (26112)

        In my county, you need a license to hold a garage sale(it's $10). And if you hold more than 1/quarter, then you need to collect sales tax.

    • 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.

      • Re: (Score:3, Informative)

        by Jarik C-Bol (894741)
        I poked around a bit more, and found out that the 300$ fee is for a 'lifetime' business license, that would not require annual renewal. The city says that anyone not interested in the lifetime license can pay 50$ a year for an annual license. apparently, there is a bill going up in Philly to make it so that freelancers (like bloggers) won't have to pay taxes on the first 100k$, but will still need the license.
    • Re: (Score:3, Informative)

      by captainpanic (1173915)

      Why not simply have a certain limit under which you pay no tax?

      First 1000 euro/dollar: tax free
      Next 1000 euro/dollar: get licence of 300,--
      Above 2000 per year: start paying tax as well...

      That is just an example. I just mean to say that you'd need a progressive business tax that doesn't kill small initiatives before they make any real money.

      Governments should encourage little businesses and initiatives - they make the money go round... and are often maintained by people outside office hours, therefore increa

    • by iamwahoo2 (594922) on Monday August 23, 2010 @10:24AM (#33340754)
      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.

      • Re: (Score:3, Insightful)

        by jeff4747 (256583)

        In the article, it explicitly states that she does not run a business

        And if it helped on their taxes, I'm sure Wal-Mart would explicitly state that they are not running a business. Retail stores are just their hobby.

        This is why there's rules about what is and isn't a business, and they have very little to do with the protestations of the person running the business/non-business.

    • Re: (Score:3, Interesting)

      by Hatta (162192)

      Freedom of the press is afforded only to those who can afford a press.

      • Re: (Score:3, Interesting)

        by sjames (1099)

        And Philly wants to make sure that's as few people as possible. That COULD be viewed as a constructive violation of the 1st amendment.

    • Re: (Score:3, Insightful)

      Being charged $300 for a business license for a "business" that only makes $10 a year is ridiculous. Blogs don't need health inspections, they don't need parking, or building inspectors, or any other government service that could possibly justify a business license.

      This is exactly the sort of government abuse that drives people into the black market.

  • Bad Summary in OP (Score:5, Informative)

    by Stormy Dragon (800799) on Monday August 23, 2010 @09:58AM (#33340310) Homepage
    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.
    • She isn't blogging for money. The ad revenue is tertiary to the blogging. After two years it hasn't even paid for the hosting account if she's using a web host like Blue Host [bluehost.com].

    • do the local papers also have to pay this tax? serious question...

      • Yes. Every income-generating business does.
      • Yes, it is required of every business. This is true in just about every town or city - to get a license to operate you must pay for a license. Often, there is a floor, below which you may not be required to get one, and a ceiling above which you pay a percentage of your gross receipts (or income). It means businesses pay a portion of the funds it requires to run the city (police, fire, cleanup, trash, etc.)

        This is a "privilege tax," which is simply a way to extract a minimum fixed fee for the opportunity to

    • It IS ridiculous to say that someone needs to pay a business tax to engage in any activity that nets money. Blogging isn't special because it's on the internet. It is speech, even if she did get paid a paltry sum for it.

    • Re:Bad Summary in OP (Score:4, Interesting)

      by rolfwind (528248) on Monday August 23, 2010 @10:23AM (#33340738)

      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.

    • by VJ42 (860241) *

      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.

      I did read it, It sounds like the money is probably coming from Google ads - she's hardly running a business, and even if she was, she made $50 "over the last few years" - it'll probably cost them more to collect the tax than she will actually pay back ($300 included) when you consider the cost of all the government employees involved in tracking her down, sending, signing and delivering the letter asking for the money, actually collecting and counting the money etc. etc. - the whole thing is dumb.

  • Lesson learned? (Score:5, Insightful)

    by Bai jie (653604) on Monday August 23, 2010 @09:59AM (#33340326)
    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.
    • Technically the IRS doesn't require you to report income under $20k IIRC

    • Re: (Score:3, Informative)

      by hedwards (940851)
      What you typically do is report the income as miscellaneous, which for small sums of money the IRS is OK with, you still pay the standard income tax rate for your bracket, but they can't come back and say you didn't pay your taxes. Not sure about state income tax, we don't have that here. Last I checked which was a few years back, they didn't really tax this sort of thing unless something was produced in the process. The only tax here on this sort of thing is the B&O tax, which will hopefully finally be
  • The Lesson: Don't file income on small stuff like the $5 you earned blogging because the state does have common sense. If you go ahead and file this income then neither do you.

  • by bleh-of-the-huns (17740) on Monday August 23, 2010 @10:01AM (#33340376)

    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.

    • The blogger referenced in the submission is running a personal blog.

    • by oodaloop (1229816) on Monday August 23, 2010 @10:11AM (#33340530)
      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.
      • Re: (Score:3, Informative)

        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.

        It's PA and more importantly, Philadelphia. That city is an anathema to economic freedom.

        Occupational Privledge tax (Sucks if you are an engineer that is underemployed)
        Wage tax (4% right off the top)
        Hell, I wouldn't be surprised if you needed a permit to apply for a licen

    • by iamwahoo2 (594922)
      Cracking down is completely unnecessary. The fact is, a home based business serves as an excellent tax shelter, and the IRS does not want people declaring hobbies like this as a business because they will lose out on tax revenue. If I could start a personal blog and be allowed to declare it as a business on my taxes, then I would start one tomorrow.
    • Re: (Score:3, Insightful)

      by 2obvious4u (871996)
      You do not have to follow bad rules. You do have to live by the consequences of not following a bad rule, but you should never obey a bad rule or law. You should disobey it fervently and work to get it corrected. As long as you can live with the consequences that may come your way from disobeying it, be it fines or even jail time.

      Where would we be if we didn't constantly challenge bad laws through civil disobedience? Well for starters we wouldn't be able to drink alcohol, some of us would still be fo
  • Oh wait, I just thought of the name for my new blog.
  • by mmontalvo (831939) on Monday August 23, 2010 @10:15AM (#33340600)
    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.
    • They define a business as an entity that is expected to make a profit.

      Well, that gets Detroit's auto industry and Wall Street off the IRS hook, then.

  • by hessian (467078) on Monday August 23, 2010 @10:17AM (#33340640) Homepage Journal

    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.

    • by Bruha (412869) on Monday August 23, 2010 @10:20AM (#33340692) Homepage Journal

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

    • I thought donations counted as gifts and so weren't taxed? Naive me, I guess.

      In any case, yes, this is perfectly normal: governments throwing up bizarre barriers hobbies and businesses that have no grounding in concern for the public. The only question is whether you count this "normality" as an argument for or against this kind of thing. Are you only upset at Philly because it hits too close to home, or because you oppose things like this generally?

      Aye, there's the rub.

    • and for all that balance correction....

      what are the people getting from their country that they pay for?

      Happy unemployment.

      It seems like this does very little balance anything. If anything, the scales have been tipped in the government/upper class's favor for a long long time.

  • Slippery slope (Score:4, Insightful)

    by Wonko the Sane (25252) on Monday August 23, 2010 @10:25AM (#33340780) Journal

    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.

  • by scorp1us (235526) on Monday August 23, 2010 @10:39AM (#33341038) Journal

    The choice to incorporate is not one that the state can require you to do. It is a matter of liability. Anyone who has studied the history corporations know they are 100% about liability. If she wants to blog and generate income, then she does it with her personal liability on the line (for slander, etc)

    However, it is generally a good thing to incorporate. She will be able to deduct from her taxes in full or part, the cost of her internet connection, time blogging, etc as un-reimbursed business expenses. So she'll actually make out better because the corporation pays bills first, then pays taxes. Humans pay taxes first, then pay bills. Meaning that her company money will go farther than her personal money in paying for things. About every rich person I know has at least one fiction (a company) in their name. This means, the state will actually lose money. There is a small discrepancy when the cost of the business ($300) exceeds profits, but she can use the corporation for something else as well. She certainly doesn't live on $11/mo

    Standard caveats apply, IANAL, IANAA (accountant) , YMMV, etc. I do however have a corp.

    The ancient principle of the Anglo-Saxon common law, and Biblical law, is that everyone has a right to make a living at occupations of common right. So then, what is an occupation of common right? It is the right of all men in common to do any work that men might engage one another to do, and that does not exist as a result of some government act or establishment. Occupations of common right were some of those “inalienable rights” the writers of the Declaration of Independence had in mind. At least, that was the US supreme court’s opinion in Butchers Union v. Crescent City Co., 111 US 746:

    “The right to follow any of the common occupations of life is an inalienable right. It was formulated as such under the phrase “pursuit of happiness” in the Declaration of Independence which commenced with the fundamental proposition that “all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness.”This right is a large ingredient in the civil liberty of the citizen.”

     

  • by hAckz0r (989977) on Monday August 23, 2010 @11:01AM (#33341462)

    Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

    If the law bars you (e.g. 'free exercise', as in freedom, not as in beer) from blogging then it it unconstitutional and is therefore null and void under the US Constitution Amendment 1. If your soap-box cost you money to stand on then it would be an illegal tax on the privilege of exercising your freedom to speak. Charging you a 'business tax' is the same thing, and this tax as described does not even take into account the fact that the equipment, services, electricity, etc, likely cost more than any advertising revenue taken in, so there is no profit to tax, only a free speech tax. Charging a 'business tax' on a personal exercise of the US Constitution should be illegal until such time that the individual' NET profits exceeds the taxable amounts allowed by law under the personal income tax regulations. If the taxable amount goes high enough then that individual should file quarterly taxes as any individual would be obligated. Under no circumstances should this individual be considered a business, until the applicable laws force them to do so, or become one. Of course with that said, liability insurance as a protected corporate entity might not be a bad idea in this day and age, and that would likely be a deductible expense.

    IANAL, so don't listen to me.

  • by xandercash (1791710) on Monday August 23, 2010 @01:02PM (#33343540)
    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.

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