You’ve probably heard about it already. Last week the Philadelphia City Paper posted an article discussing the city’s Business Privilege Tax that taxes residents who engage in any sort of “activity for profit” – even if the activity has never profited them as much as a latte. Ever. The trouble started when bloggers discovered this tax applied to them and they, predictably, went out-of-their-mind berserk. Blog posts were written, tweets were ALL CAPS LOCKED and I even had one person tell me it was unconstitutional to tax a blogger. [I did a Ctrl+F on the Constitution to verify this but couldn’t find any mention of “blog”. Sorry.] It was pretty amusing.

In the aftermath of the outrage, I was left to wonder if taxing bloggers was such a bad thing. In fact, I think it could help bring professionalism to a “hobby” that’s long needed a push into maturity. I will totally agree that, as is, what Philadelphia is putting together makes little sense. The idea of taxing a grandmother and her crochet blog is extreme. However, tax or no tax, bloggers need to start thinking of themselves as small business owners. And maybe taxing them is just the way to start that new line of thinking. We may find it would actually help, not hinder them.

My name is Lisa and I support taxing bloggers. Here’s why.

A blog tax may:

Force bloggers to be honest with themselves

The loudest argument I’m hearing against this blog tax is that most people don’t consider their blog a business. It’s a hobby, they say. Sorry, but the moment you put ads or affiliate links onto your blog it stops becoming a hobby. That’s the moment you become a small business owner, just like Joan’s Donuts down the street that’s also making no money. Whether you take that fact seriously or not is up to you. But you started down the road of making money via your blog and you should be honest about why you did it. Are you looking to make some money via AdSense? Are you hoping to build your business by creating authority and a stronger personal brand? Are you hoping to get enough traffic on your blog to sell a product? Why are you blogging? It’s time to be honest about your intentions.

Encourage bloggers to treat their blog like a business

It’s been settled. If you attempt to make money from your blog it is now a business. That means you should start treating it like one and stop using it pen your Christmas letter to Aunt Millie. Once you start thinking of yourself as a small business owner your entire approach to blogging will change.

You’ll be more likely to:

  • Create an editorial calendar and stop phoning in your content.
  • Stop lurking and start networking with people in your industry to build authority and relationships.
  • Create a reader street team to build buzz and get the word about what you’re doing.
  • Look into REAL ways of monetization and get away from webmaster welfare.
  • Invest in blog consulting services so it stops looking like NASCAR designed it.

In other words, start putting the steps in motion to build your blog and your business. If any of that seems like too much work, again, ask yourself what the point of your blog is? What was the goal? If it was “just a hobby” why do you have ads on it? “Hobby” is often another way of saying “I’m scared to fail”.

Help bloggers take themselves more seriously

My biggest issue with bloggers and blogging is the lack of credibility assigned to the medium. And a big part of why bloggers are looked at as a joke and or imposters is because they treat themselves that way by half-assing content and not committing to what they’re doing. When you don’t take what you do seriously, you give other people license to disrespect you in the same way. I don’t think that a $300 lifetime blogger license is going to make people heed the power of the keyboard, but I do wonder if maybe it’s not a step in the right direction to make people take what they’re doing more seriously or at least question it. If you’re appalled by the idea of having to pay a one-time lifetime fee of $300 then maybe you shouldn’t be blogging. I don’t think a fee would fix blogging but maybe it would shine a light on some people who shouldn’t be there. If your blog isn’t worth $300, total, in your lifetime, then I don’t want it clogging up my Internet.

End the “even playing field” blogger myth

Last summer I wrote about why I hate bloggers. In that post I expressed a lot of frustration over folks who viewed blogs as their way to “get famous” only to declare the medium “overhyped” when their blog about being a 20-year-old college student or their passion for coin collecting didn’t transfer into a 6-figure salary. I think one of the worst things to happen to blogging was the idea that anyone could do it or that it leveled the playing field for publishing. I mean, in some ways it did. But in most, it didn’t. In most cases it just highlighted a large segment of the population that shouldn’t have been publishing in the first place. Because they couldn’t write. Or because they had nothing interesting to say.

I don’t think that applying a tax to blogger will smoke out the hacks, but I’m okay with raising that bar to entry just a tad higher, $300 higher. Go print your tax form.

Will the Philadelphia blog tax change anything in the end? Probably not. But something has to. Is your blog a hobby or is it a business? It’s time to decide. And if you decide it’s the latter, then start taking it seriously. Otherwise, get off the road. Bringing in money isn’t what determines whether or not you’re a business. The intent behind it does.  And if you  have ads on your blog or you’re using affiliate links, then your intent is showing.

Worth Noting: In June Philly council members Bill Green and Maria Quiñones-Sánchez introduced a proposal that would that would reform the current Business Privilege Tax and make it so that businesses wouldn’t have to pay taxes on their first $100,000 profits. That’s a compromise that would likely make even the angriest of bloggers happy.


About the Author

Lisa Barone

Lisa Barone co-founded Outspoken Media in 2009 and served as Chief Branding Officer until April 2012.


197 thoughts on “Why Bloggers Should Put Up, Shut Up & Pay Their Tax


  • Rebecca on said:

    I was one of the people who heard about the tax and thought it was a bit extreme. I didn’t tweet in all caps, but I did say loudly to nobody in particular, “I don’t like this.” You bring up a lot of good points about bloggers needing to take themselves more seriously, but I find a lot of the bloggers I follow have their blog attached to a small business and do take it seriously. There is definitely a middle ground somewhere in here, and I think the $100,000 rule is a great way to acknowledge not all bloggers are making money from their blog, some are just hobbies with a dollar or two in revenue a week, but if they do make significant profits, they should (and apparently one day will) pay taxes.


    • Lisa Barone on said:

      I think most people are comfortable with that $100,000 line. It makes sense that if you’re profiting you should give back in some way. I know it sounds extreme in some cases, but I’m actually not against every blog that allows advertising having to pay for the business license. Why are blogs any different than any other small business? How many of those don’t make any money but still have to pay get a business license and pay taxes? We’re getting into some really interesting areas.


  • Mike Piper on said:

    Here in Chicago we have a $250 tax for any home-based business — including blogging. We’ve had it for years. I actually assumed it was kind of normal. Apparently not, ha!


    • Lisa Barone on said:

      Ha, are you now suddenly outraged and irate? Are you going to throw your keyboard? :)

      It makes sense to me that if you’re a blogger that runs ads – you’re a business. And businesses are taxed. That’s why I found the commotion over the past few days really interesting.


  • David Zemens on said:

    One of the problems with our economy is the notion that government -(federal, state, city – no matter) can tax itself into prosperity. This is yet another example of this notion. Can’t work. Won’t work.

    Ultimately the business environment fails. We are living in that world right now. Here’s a clue for Philadelphia and other government entities: Spend less. Don’t tax more.

    Government needs to *encourage* small business. Not *discourage* it.


    • Lisa Barone on said:

      Well, I think that’s why we have people proposing that they not tax the first $100,000 in profits. But regardless of those taxes, people need to take a look at what they’re really doing and be honest about it. ARE you trying to create a business/source of income with your blog? If you’re putting ads on it, then the answer to that seems like it’s “yes”, doesn’t it? Why shouldn’t that be taxed? We tax other SMBs.


      • David Zemens on said:

        Yes, we tax other SMBs, but gosh darn it we tax them to frigging death. Granted, no business tax is *ever* paid by the business as it ultimately get’s passed down to the consumer. Am I the only one who sees that the *consumer* is over taxed and needs a break here?

        As I said in my original comment, Philly needs to SPEND LESS.


      • Suthnautr on said:

        Bravo Lisa! You’ve just shown everyone how blogging about a very controversial topic (and in this case taking the less popular position) and good marketing through Twitter gets real results. Tons of people are now posting content rich replies on Outspoken Media about the proposed Philadelphia $300 Business Privilege Tax on Bloggers.

        Your excellent ability to debate this issue leaves so many incapable of debate foaming at the mouth, insulting, screaming IN ALL CAPS (I love all caps – they really say I care), and generally stooping to the level of name calling.

        Keeping a cool head you really bring out the passionate responses and what most amuses me is that so many honestly reply thinking they will be able to influence you to concede that they are somehow right and go ahead and damage to your own arguments.

        Folks – This is not student congress. This is where you make your logical statements and leave it to the (quite frankly) totally entertained public to judge.

        It is always easier to argue the status quo than to take the negative position. In this Case Lisa argues the status quo (I know you think she’s taking the negative position, but it’s not) and as such she is right. Small businesses have to pay a business tax of $300. Once a Blog puts up ads it is a small business. People who want to get around this need to switch to doing yard sales on Saturday and Sunday when the inspectors aren’t around. It’s not a hobby. Period. THAT’s the status quo.

        Lisa hasn’t had to argue the whole case (though I’m sure she’s capable) but only one plank in the argument. Workability is a plank she might have problems with – how do you enforce such a tax? Do you use existing staff in the Philadelphia tax department? What happens when a blogger incorporates in Delaware (or anywhere else) and runs his blog as an out of state inc? (I have no idea, just threw that in to start people scrambling to incorporate in case it works).

        The main point I’m making here though isn’t that there should or shouldn’t be a tax – it’s that Lisa has just shown all of us, once again, how to blog.

        Thanks Lisa!


        • Jeff Gibbard on said:

          Isn’t the point of the comments to encourage discussion and in some cases debate? I think those of us taking the opposing view are honestly hoping to influence Lisa. We make clear points as to the nature of our disagreements in the hopes that it will inspire new thinking for the author in the same way that her post encourages us, her readers to think differently.

          If your point is that Lisa has shown us how to blog by putting up a controversial topic and taking the side that would cause the most argument then I would respectfully suggest you check the John C. Dvorak playbook; a man notorious for deliberately upsetting mac users to boost site traffic.


  • Amanda on said:

    As I actually live in Philadelphia, I may be the only person to whom this tax applies.

    The issue here, Lisa, is not that I am averse to paying a “Blogger’s Tax”. The title is a misnomer.

    Philadelphia requires a $300 “Business Privilege Tax” which, historically, was applied to businesses who operate within Philadelphia back when it was important to list Philadelphia as your address. You know, back in the days of Strawbridge & Clothiers , John Wanamaker and when Philadelphia was the insurance capital of the world (we long ago bowed to Hartford, CT).

    The notion that Philadelphia is a privileged address to have a flagship store or base your headquarters out of is as antiquated as the industrial era from which it came.

    The tax is not flat. You pay $300 for a license, plus an additional % of your income. In the case of the blogger who they featured in our local City Paper the flat license EXCEEDED her earnings by 6x. This is in addition to our
    – City income tax
    – State income tax
    – Federal income tax
    – Social Security tax
    – Medicare tax

    As you might imagine this adds up quite quickly.

    I am all for accountability in journalism and do not disagree with the merits of your argument that bloggers (who are serious money-pursuing bloggers) should treat their web properties as a business no different than any brick-and-mortar journalistic entity.

    That said, the Philadelphia Business Privilege Tax, when applied to bloggers who use their blogs as platforms of personal expression and who can maybe afford to buy themselves a couple of beers at Standard Tap for their efforts…? That is a bit insane.

    And atop all the rest of the taxes we pay, the Business Privilege Tax in Philadelphia creates a caustic environment for entrepreneurs and established businesses alike. It’s no wonder we are one of the worst brain drain cities in the nation (only Cleveland and dismal Detroit rank lower) and lose ground year after year, despite our comparatively low cost of living, to our neighbors in New York or Washington, D.C. for start-ups of all genres.


    • David Zemens on said:

      Exactly.

      Taxed to death. Business discouraged. Business goes elsewhere. Philly decides to tax the remaining business *more* rather than cut spending. More businesses leave. The cycle is pretty clear.


    • Lisa Barone on said:

      I do wonder what these kinds of taxes do to entrepreneurs in the Philadelphia area. If the revisions go through that will make it so that the first $100,000 in profits isn’t taxed, will that alleviate most of the burden?

      I do think Philadelphia is going about this the wrong way, however, I agree with the business line behind it and what it ultimately would mean for bloggers. Hopefully, they’ll revise what’s there so that people aren’t paying out of pocket more than they’d ever earn. Because, at that point, you do discourage local small businesses and that’s something no one wants to do.


      • Amanda on said:

        I really admire Wil Reynolds (SEER Interactive) because he has found a way to grow a business in this city on a nearly exponential basis. He is, however, the exception to the rule. We’re losing ground to small NJ cities like Jersey City and Camden (CAMDEN!) in # of start-ups precisely because this tax is in effect and, when coupled with a 4% city income tax, rips gross profits to shreds. As the 6th largest city in the country it astounds me that we don’t do more to promote internal growth, especially when you consider that we house one of the best business schools in the world (Wharton) and 17 other colleges or universities within our city limits. 30000 people a year graduate with a four-year degree from a school based here, yet only 18% of the population of the city has one.

        Simple economics is responsible.

        If they do revise the BPT (Business Privilege Tax) to exclude the first 100,000 in profits- I think it will help. But is it enough to stem the watershed of talent and business leaving Philadelphia? Especially once they meet the $100k threshold and could be most useful to the city for tax purposes?

        No.


        • Rhea Drysdale on said:

          I like that you’re arguing from the side of businesses, not bloggers. This is a small business issue with the City. The 100k exclusion would alleviate the $50/year blogger complaints. To Rae’s point, I don’t understand having ads if you’re only making $50 annually. With all of the costs associated with upkeep and as we’re seeing, business management, you need to make enough to at least cover those costs. If you can’t, drop the ads.

          You don’t seem to be arguing that point though. What you are arguing is a much bigger issue that would require a major political and economic fix. As for brain drain, I’m not geographically setup to address that issue. Some yoda advice though… if you want to see a change, be the change. I agree that Wil Reynolds is amazing and helping to keep brains local. We’re trying to do the same in Troy, NY. Successful startups can attract talent, revitalize the economy and make their voices heard with local government. Good luck over there! :)


          • Amanda on said:

            I am not arguing the point w/r/t whether or not bloggers should pay business privilege tax. As I have paid my BPT and continue to pay my 4% city wage tax, state tax, fed tax et al I am ipso facto agreeing that internet businesses are still businesses and therefore susceptible to the same rules as brick-and-mortars.

            I am simply saying that Philadelphia is an archaic industrial city and our economic policies reflect a time when we were the Industrial capital of the East Coast. But that was, what, pre-depression era? The city has been struggling for decades and our inability to enact real change inside city government, much less have city government enact probusiness economic policies- is the root of why we continue to lose ground.

            With several very entrepreneurial schools in our city limits, you’d think we would be a harbinger of start-up activity on the coast. I am unhappy to report we generate many of the ideas that then take root and grow elsewhere.


  • Chris Miller on said:

    All small businesses are taxed, I’m not sure why blogging would be any different. This does bring up a question though: Could Black Hat SEO now be in a round about way considered tax fraud? What if you run your business via proxy outside the city limits?

    I really doubt a tax will improve blogging quality either way. Money doesn’t make you remarkable, or validate your opinions.


    • David Zemens on said:

      All businesses are taxed too much. That’s the issue. The Philly blog tax is just a symptom of a problem that *cannot continue forever*. It has to stop.


      • Randy S on said:

        Dear David,

        We get your point. Businesses are taxed too much, you can stop commenting about it. But I believe the intent of the article is not to determine whether or not the tax is fair, too much or unwarranted. Rather, the post is specifically speaking to the fact that blogs that profit through ads and affiliate links, should not be treated differently than other SMB’s. Correct me if i’m wrong, Lisa.


        • David Zemens on said:

          Dearest Randy S,

          I understood the point of the article very clearly. Like most, I run my business legitimately and pay the piper at every turn of the road.

          But at the end of the day a municipality who thinks they found another goose that laid the golden egg and can squeeze yet another dime out of struggling businesses needs to be called out on it.

          So, once again, I’m screaming out: No new taxes.


          • Daniel on said:

            And just like another Republican who didn’t understand the basics, out comes the “No New Taxes” rhetoric.

            There are no new taxes. The Philly tax isn’t new. It’s just finally being applied to a segment of the small business population that had been avoiding it.


  • Armando Di Cianno on said:

    All your points are 100% valid, but they don’t really address the Philly-blog-tax issue. First, I think you are understating the financial hit this tax would have to an incredibly small business owner (i.e. the blogger), who may be running ads only to recoup hosting costs (or other small, repeating fees). Second, I believe you don’t adequately address what could be considered actual, taxable work-product.

    There are lots of tax exemptions out there. Heck, newspaper corporations generally do not pay sales tax (in most states), even though every newspaper contains lots of advertisement. Extending an exemptions to bloggers, or any small business below a certain threshold, makes plenty of sense.

    Also, I’m not convinced a purely online business legally owes taxes to the city a writer/blogger is living in. If my servers are in Sacremento, CA and my work-product is only ever impressed into bits there, even though I may be typing in Troy, NY, where do taxes go? Do both locales get to tax me? Neither? One or the other? If anyone reads my blog in Philadelphia, do I owe that city money, because an ad impression in their locale occurred?

    This scenario changes once there is a “brick and mortar” locale that facilitates actual business being conducted, of course.


    • Lisa Barone on said:

      I think you’d owe taxes in the places that you live, not where you have hosting, but that would just be my guess.

      I intentionally skirted the tax issues, because that’s not really my interest, to be honest. My interest is more in what this means to bloggers EVERYWHERE and how it should alter their thinking about what it is they do. Are you a hobby blogger? OR are you trying to make money? If it’s the latter, you’re a business. And you should start running your blog that way.


      • Randy S on said:

        If you work in an ecommerce business that ships product across state borders, I believe you still pay based upon where you live, regardless of server situation.


      • Armando Di Cianno on said:

        “Are you a hobby blogger? OR are you trying to make money?”

        I don’t believe this dichotomy you’re arguing is exactly apt, and it’s definitely an either/or argument fallacy.

        Many people have hobbies make a small amount of money. Sometimes the products of these hobbies can definitely be taxed — e.g. sale of goods at a fair, or even on etsy. Sometimes the product of the hobbies aren’t so clearly taxable, or I would argue, the product of work shouldn’t be taxed, at least for the social good.

        I suppose the discussion of this topic is inherently conflated — taxation and licensing are related, but different things. I think that busker’s have to pay for licenses like this, too — but I wouldn’t want to see tax money wasted on enforcement of non-licensed busking. I also don’t want to see money wasted on chasing down bloggers that filed taxable income anyway.


        • Lisa Barone on said:

          If you make bracelets and sell them on Etsy, in my opinion, you have a small business. I think that’s where my thought process differs from a lot of people.


  • Joe Hall on said:

    Blogs, and blogging shouldn’t be free. Period.

    Blogger.com and WordPress.com are responsible for most of the garbage on the internet. If you have something to say that you think holds value. Then put your money where your mouth is and make a small investment in your ideas. I mean hell if you aren’t willing to put forth a tiny bit of change for what you believe in, then why the hell should I take what you have to say seriously??


    • DanielthePoet on said:

      People who don’t use hosted solutions are already paying for a hobby. A hobby! They pay hosting companies, domain registrars, and maybe graphic designers/developers. They pay to do something they love.

      Are we going to require bloggers who have a donation link to pay tax? Why or why not? If the money is the same, what is the real issue?

      The problem is most people don’t donate to bloggers, even when the blog is really good. When a person’s business is blogging, then the only action they’re asking the visitor to perform is to read, watch, or listen. Not purchase. If they want to buy what the blogger has bought and recommended, so be it. If the blogger gets a cut from the sale, I don’t think that necessarily makes his blog a business.


      • Joe Hall on said:

        Forget the debate of weather the blog is a business or not….and for a moment forget the tax….I am saying that if you blog because you think your ideas have value, then shouldn’t you do everything possible to make sure your ideas are delivered to your readers? Even if that takes paying money to a hosting company or government??

        If you aren’t willing to invest in your ideas, then you have no right to share them. Its your responsibility to pay for the cost and repercussions of your own ideas, its part of existing in a civil society.


        • DanielthePoet on said:

          If you think your ideas have value, you have the right to do everything possible to make sure your ideas are delivered to readers. And paying hosting companies is essential because they are providing the service of hosting your content and making it accessible. What service is the government providing to the non-business blogger? If you can show me the service, I will likely concede.

          My point is that just because the idea of a tax exists, does not make it a good and right idea. The mafia can come to me and demand 10% of my take on whatever I do. They threaten to fit me with cement shoes if I refuse. I have a choice. Does that mean I SHOULD pay them just because they demand it? Does my love and passion for what I have to say dictate that I comply with unjust requirements?


          • Joe Hall on said:

            I suppose the argument about whether the tax is just or not is something that others in the comments are already talking about. …I quit complaining about whats “unfair in life” a long time ago…

            I am just addressing the overwhelming assumption that you can and should have the right to a free platform with out any investment.


            • Alysson on said:

              DISCLAIMER: This comment is not relative to the topic of this post.

              The notion that one should have to have money to get his or her ideas out into the world is the very approach that kept the all mighty dollar in charge of information for so long. Thanks to the Internet, and to blogging in particular, that is no longer the case. And that’s a good thing.

              What is garbage to you is genius to someone else. You don’t get to decide what is “worthy” of being published and what is not by obligatorily stating that anyone who can’t afford to pay to put their ideas out there and have their voice heard doesn’t deserve to exist in the virtual world of the Internet.

              For some people, $100 a year to host a blog is a lot of money. That doesn’t mean their points of view have no value and should remain trapped within the confines of their dire financial circumstances. The best ideas never come from a boardroom. They never come from the guys wearing the expensive shoes while congratulating each other on being masters of the Universe behind the closed doors of it. Ideas are free. And expressing those ideas should be free, too.


            • Joe Hall on said:

              @Alysson

              How can you truly place value on your ideas if you don’t have to work to spread them? Anyone can stand on their soapbox and yell, few can climb a mountain and sing.


            • Joe Hall on said:

              Yes, ones ideas carry different value based on the context and each person’s subjectivity. You are right about that.

              I have a friend who is currently building her first personal blog. She is paying for hosting, and a professional custom theme. She values her own ideas enough to pay to make sure that their delivery is flawless. Is she the best blogger in the world? Will her blog be popular? Who knows. But, the point is that she cares enough about what she has to say that shes putting her money where her mouth is.

              You don’t have to be like her, but I would rather read content from some one that cares that much then someone who just blogs for the sake of blogging.


    • Alysson on said:

      @Joe – you imply that having money to spend is considered “doing work”. Doing the work to spread ideas and bring attention to causes you believe have value involves much more than money. With your experience in grassroots advocacy, you already know that.

      While it’s nice to have money to invest from the get-go, that’s not always the case. And that doesn’t mean that your ideas should have to remain trapped within your mind until you do.

      Okay, Lisa…I’m done. I won’t hijack the conversation with any further off-topic comments.


        • Kim Krause Berg on said:

          Cre8pc.com (the blog) started out on Blogspot in 2002.
          Cre8pc, the business, started out on free hosting from AO in 1995.

          Free doesn’t equate to “garbage”, in my opinion. It was all this single mom living below poverty level, but who had “intent”, could manage.

          Thank god for free.


          • Lisa Barone on said:

            If you’re trying to equate what the blogosphere/Web looked like in 1995 or 2002 compared to what it looks like today, that’s not even close to being an even fight.

            Yes, thank God for free. And thank God for people who invest in their businesses.


            • Kim Krause Berg on said:

              Joe didn’t specify a time. I took his words literally, and with some personal offense for those of us who had nothing, started with nothing and to this day help those who have nothing. Hell, its the premise for my next web project :)

              So many of us had access to free and used it to build businesses. I disagree with Joe or you that today is any different. Or I don’t want to. That would be sad.


            • Suthnautr on said:

              Listen! I started with nothing, and I still have nothing. I am an American and I have the RIGHT to nothing! (Did I just say that?). This law will ensure that I have less than nothing – and all I have is a debit card (that’s why it won’t work).

              P.S. If anyone is going to get my $300 its my wife (she just told me to tell you that).


          • Joe Hall on said:

            Kim,

            The vast majority that utilize free platforms to build a business aren’t serious about it. I am not saying thats true for everyone, you for example have done an awesome job with it!

            To be completely honest, its kinda a slap in the face to see folks go around claiming that anyone can build a business with free tools….especially when developers and designers struggle to compete with outsourcing markets….I bet at least twice a month I get asked to work for free…..folks assume that because WordPress and blogger are free, obviously the folks that program to support them work for free too, right?

            i am going to stop here and turn this into a post…..stay tuned.


            • Kim Krause Berg on said:

              Just remember that anyone can use free tools, but tools don’t create the business. Yes, there’s some really bad stuff out there in blog-land. I call them poor decisions, bad choices, and uneducated attempts. But it’s not the tool (software, hosting) that destroyed the biz.

              Same with stores we see appear and disappear in our towns. They each lease the same building. Some businesses will survive in that building and some will disappear overnight. Maybe there was no market for their product there. Whatever…

              My point is that it’s not the blog software or the hosting that determines a legit biz. And, some big name companies started out in their garages and got really, really big :)


            • Joe Hall on said:

              But my point is that when a business decides to go the free route and folks go around touting the “free model” they are effectively saying, “Don’t hire Joe Hall, because lets face it, you can get it all for free” And that attitude DOES ruin businesses, mine.


  • Todd Mintz on said:

    Blogging itself isn’t a business…though monetizing your blog is a business which is taxed along with the rest of your income. Pretty much everyone earns some money somehow so why wouldn’t your blogging income be thrown into the mix with everything else you earn? It seems a bit rough to surcharge people who create online content who are paying taxes on their earnings anyway.

    This almost sounds like a municipal attempt at linkbait.


    • Lisa Barone on said:

      This almost sounds like a municipal attempt at linkbait.

      Hahaha!

      That’s a good point about essentially being taxed twice. I think if bloggers are paying the business license, they shouldn’t be taxed on what they make…only to be taxed on it again with the rest of their earnings.


  • Alysson on said:

    Here’s the thing, if a blogger generates revenue from their blog, it IS a business. And those profits should be taxed just like the profits from any other business. Duh.

    From that article, one line really stood out:

    To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut.

    Just because a blog has the potential to make money doesn’t mean it does…or ever will. And to assume a blog is a business and that the blogger intends to use it for profit at some point is asinine. That’s like saying anyone who owns a handgun has the potential and intent to kill someone, so let’s just go ahead and act as though he already has.

    If local and state economies weren’t in the crapper, 1) Philly probably wouldn’t have done this in a feigned attempt to generate revenue; and 2) people who are already financially screwed & turned to blogging because they’ve got a lot of free time, hoping it might get a few bucks coming in from ads, wouldn’t feel like they were being hosed by “the man” yet again.

    Any blogger in Philly who actually IS making money blogging doesn’t give two shits about that $300. If the revenue being generated from a blog isn’t being reported as taxable income, laws are being broken already. And no dumbass letter demanding that a “Business Privilege Fee” be paid is going to carry any weight with those people if potential jail time for tax evasion doesn’t.


    • Lisa Barone on said:

      But if a blogger is running ads on their Web site…isn’t that a sign they intend to make money off it? It doesn’t matter if they ever do. As Google would say (heh), the “intent” is there. They’ve decided to start a business via their blog.


          • Alysson on said:

            What if is a blog for a not-for-profit advocacy group or organization? Or the revenue generated from ads goes directly to charity?


            • Rhea Drysdale on said:

              They’re exempt. Do the research.

              “Not for profit corporations and charitable non profit 501(C) (3) corporations are not required to pay Business Privilege Taxes (BPT) nor are they required to obtain a Business Privilege License (BPL). However, they must register with the City of Philadelphia’s Department of Revenue who will require a copy of the IRS exemption letter.”


      • Kim Krause Berg on said:

        If a blogger owns the blog and chooses to put ads on it, that doesn’t automatically legally mean they are a business. However, if enough revenue actually comes from it, then the next step is to consider forming a business/sole proprietorship to write tax-write offs against those earnings. Sure, it means paying taxes but that’s fair.

        If a blogger has a blog sitting on free hosting and that free host leeches off the blog by putting ads on it, the blog is not a business. They don’t any of the proceeds.

        Taxing or demanding a business license on anyone or anything on “intent” is wrong.


        • Eric Wood on said:

          “Taxing or demanding a business license on anyone or anything on “intent” is wrong.”

          Here’s the trouble with this argument… at what point does the “intent” become a “business”? Is it an amount of money in “profit” (I put profit in quotation marks because any good accountant can hide a sizable portion of it)

          Are the ads being served proof of the intent?
          If a brick and mortar opens their doors, and never ends up making money, can they simply claim that they had no “intent” to make money, and therefore not pay taxes?

          Every business in America pays some sort of taxes, and usually these small fees are there to create a sort of minimum tax level.

          On another topic, there was a comment above that said that the $300 fee would amount to censorship because some people couldn’t afford to state their opinions. If you believed in your opinion enough, you could get a few of your friends together to pay the fee.

          Honestly, I’d listen a lot harder to someone who convinced 300 people to each contribute $1 to getting the word out than to someone who simply had no investment whatsoever.


          • Jeff Gibbard on said:

            It’s called FREE speech. Not $300 speech. Your argument is invalid.

            Now the real answer is that if you want to express your opinion and don’t want to pay the $300 don’t serve ads on your blog. A blog can still be free, just don’t put ads up.

            However, I still feel that you shouldn’t need a license until you’ve made at least $300 from your ads. Makes sense doesn’t it?


  • Loretta on said:

    While I think this time in the U.S. economy is a lousy time to introduce new taxes I will agree with the a blog is a business point. Like you said, it doesn’t have to be, but once you start trying to make profits you’re crossing into the business world even if you don’t mean to do so.


  • DanielthePoet on said:

    I completely disagree. It’s your opinion that bloggers should be small business owners or get the $%&# out. But if 20 million people want to blog instead of Facebook their thoughts, and if they want to use affiliate ads instead of lame donation links to PayPal to cover expenses, more power to them.

    If I have a garage sale, no big deal. If I have many, I need to get a permit. That permit in and of itself is lame, but legal. And it’s nowhere near $300, or the whole point of HAVING a garage sale would be moot. When you are performing minimal activity as a hobby that happens to bring in some cash, it’s still a hobby.

    If any government wants to tax bloggers, there must be an income level stated that a blogger must earn in order to pay a tax. The only other logical method I see is to create what would really be unenforceable laws that require a tax on every exchange of money online, including PayPal, Amazon, etc. It would be a sales tax and not a small business tax.

    The idea of taxing bloggers for blogging, without even requiring proof of income, is pathetic at best. It may still become law, but that doesn’t make it ethical.


    • Lisa Barone on said:

      It’s your opinion that bloggers should be small business owners or get the $%&# out.

      No. My opinion is that if you put ads on your blog you are not a hobby blogger. You are now someone trying to make money off it.

      I agree with you re: the income levels and I think a lot of people hold that same believe. That’s the reason for the proposed revision that will set that bar at $100,000 in profits.


      • David Zemens on said:

        The point is (sorry Randy S.) that bloggers do pay income tax on their two-bit Adsense ads and the like. At least they do if they are being legitimate.

        Other more traditional or brick and mortar businesses also pay income tax, often on a pass thru basis to their personal income if they are an LLC or sole proprietor entity.

        I agree with @netmeg. What is it a privilege to own a business? Philly needs to quash that tax for *all* small businesses rather than find a newly invented way to pass it on to those who were heretofore not subject to it.


    • Lynda on said:

      I agree with this.

      I don’t blog for free. In addition to my time, which is arguably worth something, I pay for my hosting and my domain. The money I make from affiliate links and ads need to be reported as income in federal taxes (and state if applicable).

      if there isn’t an income level to describe a small business, it’s outrageous taxation. Now moms selling their crafts barely making enough to cover the expense of the materials should pay a small business tax? If they’re making $3000 or more maybe throw on some additional personal taxes.

      It’s a business if I hire people – aren’t there already laws about this in most localities? What is this additional blogging tax for. It sounds like double dipping to me. This government is getting out of control.


  • Ross Hudgens on said:

    A good way to divide this line is to make a choice, perhaps every six months. You can either decide to be a monetizable blog or not one – if you are monetizable, you pay the fee. If not, you don’t. If you monetize during that non-tax period, you are subject to a large fine. This allows some beauty of the web – free publishing – to be retained, but also creates a dichotomy and allows certain blogs to be assessed more seriously.


    • Lisa Barone on said:

      You can choose to pay $50 a year instead of the $300 for a lifetime license so I wonder if that’s the same thing (i have no idea). But even if it was…is it possible to really “turn off” monetization once you start? I’d think that would get even murkier.


        • David Zemens on said:

          I understand your position Joe, but believe it or not, this economy is in the doldrums. $300.00 is a chunk of change to many, many people. Please don’t pretend that it’s not.


          • Joe Hall on said:

            David,

            Your right! $300 is a lot of money to a lot of folks….I can remember when it was a lot to me….. But just like all of the folks that helped create the current economy by getting mortgages that they can’t afford in the first place…..If you can’t afford a $300 business investment….then maybe you shouldn’t be in business? Or maybe you are in the wrong business? Go and work for what you have….mow lawns to make the $300….what ever it takes.


            • David Zemens on said:

              If you mow lawns for an income then Philly will charge you the tax on that income, too.

              If an armed bandit sticks his hand in your pocket and pulls out $300 you call the cops. If the strong arm of the tax man puts his hand in your pocket and pulls out the same $300 we roll over and give it to him. Either way we’re out $300.

              If Philly would learn to *spend less* then they wouldn’t have to continue to reach deeper into my pocket. Everybody’s pocket has a bottom to it Joe.


            • Alysson on said:

              Uh, I’m with Donna on this one. Wow, Joe.

              Mow lawns to make the $300? But then that would be a business and you’d be in the same predicament, though you’d have invested your time mowing, wear & tear on a mower, gasoline, travel time, travel to & from the lawns you mow, etc.

              What if “whatever it takes” means not paying a bullshit $300 fee some fat-cat government jackass decided was a great way to generate revenue? Just sayin’…


            • Lynda on said:

              But wait. By your logic if I mow the lawn to make $300, isn’t that yet ANOTHER business I need to be taxed for?

              Double dipping, triple dipping – how many times are we to be taxed for the SAME things? ALL income I make AND some things I purchase for personal use are subject to TAXATION. Over 40% of our household income is given to the government. Wow. That IS a high price to pay for living in America – what kind of “freedoms” is it affording us, though?


  • netmeg on said:

    I can’t get past the “business privilege” part. Silly me, I was unaware that owning a business was supposed to be a privilege. What difference does it make whether or not it’s a blog? That seems beside the point. Unless your aim is really to raise the entry level bar for bloggers. (Not that there isn’t a case to be made for that – but this is not how I would go about it)


    • Cathy Reisenwitz on said:

      I think creating a barrier to entry is the point. That’s why people already successful in an industry (successful bloggers) will tend to support barriers to entry like licensure, regulations and taxes (this blog tax), it limits their competition. They’ll claim the barriers will improve quality and “weed out” poor performers, but the market does a pretty good job of that itself, no need for artificial barriers to entry that stifle innovation and hamstring competition.


    • Kim Krause Berg on said:

      Crazy isn’t it? I live in a country town and pay $58 for the privilege of working here. They’re so nice too. They demand, via their form, that I pay $13 each quarter. I’m not allowed to pay it in full!


  • Jon Henshaw on said:

    I’m starting my blogger certification program to help sort out the real bloggers from the poser bloggers. All you need to do is pay me $500, then I’ll know you’re a serious blogger, and will send you your certificate.


  • Alan Bleiweiss on said:

    I had to sit with this for a bit before adding my 29 cents because it’s such a hot button issue.

    I’m all for pushing bloggers who use their blog as a business to actually accept that it is a business. I’m totally against a general “blog tax”. While it might weed out some really lousy content, the far more dangerous reality is that a lot of voices that would not otherwise be heard are going to get suppressed in the process.

    So while I don’t necessarily see it as a constitutional issue, it sure seems to come close.


    • Lisa Barone on said:

      I tend to disagree with this one. Saying you have a right to blog is like saying you have a right to publish a book or write for a magazine. No one’s getting on the book publishers because it’s not readily available to the masses.

      No one is silencing your voice. They’re saying if you want to be a blogger business, there may be a tax for that. Just like there’s a tax to have any other kind of business.


  • Matt Soreco on said:

    How about simply collect income tax on any affiliate money earned? And leave non-income blogs alone. In other words, leave it as it is today. Most of the people I know who have a blog do it out of enjoyment/fun and do not monetize in any way.


  • Kevin on said:

    The bloggers keep saying ‘but it’s just a few dollars?!?!1!1′

    Yup. It’s just a few dollars. Take the ads off. If you’re really only making a few dollars, you won’t miss them — and you’ll avoid the fee. In any event, if you can’t make $300 a year on your blog, you’ve got bigger issues than the fee, and the government is probably doing you a favor.


  • DazzlinDonna on said:

    Ohh, where do I begin? First, with a disclaimer that I might actually get some of my statements wrong, because I’m not in the business of either government or taxes. But these are my thoughts nevertheless.

    1. Anyone who earns any income from any means (though there are probably some exceptions) must pay taxes on that income. That’s why it’s called income tax. So bloggers who earn money from their blogs are already required to pay taxes on the income they receive from blogging. Why then, should they pay additional fees to Philadelphia?

    2. Since most people are referring to having to pay this fee as a business license fee (and I assume without having all the facts, that Philadelphia is actually referring to it that way as well), then the common argument is that they should have to pay this license fee just like all the brick and mortar businesses in Philadelphia do. Now, I don’t know exactly where the idea of “business license fees” first came from, but I assume it’s to help the city government pay for various city SERVICES provided to the business community. Such services make sense in a brick and mortar world, but I’d be willing to bet that Philly bloggers aren’t getting much in the way of services for that $300.

    3. Whether or not the bloggers choose to think of themselves as a business is, frankly, none of your business. It’s their blog. They can think of it any way they wish. As long as they pay their income taxes on the income they receive, like good little American taxpayers, no one should care how seriously they treat themselves. If a blogger WANTS to be more business-like, and wants our advice to make that happen, then I’m all for giving them whatever advice is asked for. But to put on some high and mighty “I’m a professional and you’re not” hat in a linkbaity type of post is just flat out unwarranted arrogance.


    • Kevin on said:

      Donna,
      This does not have any effect whatsoever on bloggers who do not try to make money on their site. No ads, no affiliatelinks, no products for sale, no fee.


      • DazzlinDonna on said:

        Kevin, I understand that. My points are the same. If they make money, they pay income tax. Why pay extra? Is Philadelphia going to provide something of value to the blogger in return for that fee?


        • David Zemens on said:

          Is Philadelphia going to provide something of value to the blogger in return for that fee?

          Of course they’re not. They are simply putting the big, fat hand of the tax man deeper into your pocket and mine. It’s that simple.


        • Amanda on said:

          Exactly. There is no “extra” value. Philadelphia has had a long storied history with political corruption, union pay offs and misappropriation.

          Malfeasance is expensive.


        • Matt Webb on said:

          Probably not in all honesty. This is just another money grab in my book. Great example would be how individual states have been looking at a way to tax their residents who are Amazon affiliates or eBay sellers on individual transactions over the last 3 or 4 years.

          These local governments recognize that the people are finding grey areas to make money online and want a cut. I know here in Hawaii, tax revenues are below estimated levels, so our backwards ass politicians are looking for new ways to nickel and dime us to death to meet their budget.

          If I am turning to blogging as a form of income, it’s probably because I’m not making enough income to survive decently. I’ll pay my taxes as I should of course, but this kind of experimental legislation could lay groundwork for several new tax schemes for online activity. That right there, is what concerns me the most.


          • David Zemens on said:

            I’ll pay my taxes as I should of course, but this kind of experimental legislation could lay groundwork for several new tax schemes for online activity. That right there, is what concerns me the most.

            The tax man plays a very shrewd chess game Matt. You are right to be concerned.


          • Stephanie Z on said:

            Yay for wonky formatting and not paying attention. Lets try this again…

            @Matt Webb

            You say “If I am turning to blogging as a form of income, it’s probably because I’m not making enough income to survive decently.”

            But if you’re not making a decent living on your own, what difference is a “hobby blog” about knitting going to make? I think that’s the point Lisa is trying to make. If you’re operating your blog as a “hobby” than why do you even have ads in the first place? And if you want to make money off your blog and you place ads on it, than it’s no longer a “hobby,” it’s a source of income. It is now a business blog and should be treated as such.

            Lisa, feel free to delete my previous and goofy formatted comment :)


            • Matt Webb on said:

              I understand what Lisa was saying. Not arguing with it either. I should have better clarified what the intent of that statement was;

              I was speaking for myself.

              So my apologies if this was misconstrued at all. I would like to touch on what I ended that reply on earlier though.

              I do have concerns about how this works out in the end because where I live, the politicians here are getting nasty and desperate to find things to tax and apply fees to… and they definitely keep eyeballing the internet as a target. So I know these guys here are looking for a way to follow suit if another city hits a small jackpot.

              Several cities are going broke and they’re doing the only thing they can; tax, tax and then tax again. And this.. well it’s just another tax…


          • Rae Hoffman on said:

            “If I am turning to blogging as a form of income, it’s probably because I’m not making enough income to survive decently”

            That’s total crap. You can make a lot of money as a blogger dude… CAN being the word of importance. Not debating the rest of your comment one way or another, but that was too out there for me to keep quiet.


  • Steve Nicewarner on said:

    I think many people are coming at this from the wrong direction. If you are running a business and making a semi-decent income from advertising, affiliate links and whatever, then pay the tax.

    On the other hand, if you are running your little hobby blog and making $20 per month on the side with some AdSense stuff, then stop taking the advertising money. This isn’t a First Amendment issue, no one is saying you can’t blog, the government just wants its share of the income like it does with all income.

    BTW Lisa, I think you took care of the “how can I get more people commenting” issue. :)


  • Scott Randolph on said:

    I think the issue I have is with it being a city tax, if you’re making any money at all and not paying state and federal taxes, then you’re cheating on your taxes.

    If I’m the federal or state gov’t, I’m putting the ixnay on this immediately – why? Because if I’m a blogger and forced to pay a $300 “tax” to put adsense on my blog, then you can bet you’re ass I’m taking several thousand dollars in income tax deductions that just became available to me.

    Similar to slippage when you raise sales taxes in border towns, this would actually reduce the amount of tax money flowing in to the system. Because most people in politics are bumbling idiots.


  • Shane Arthur on said:

    Bloggers should leave Philly to prove it’s the government that is privileged to have taxpayers. This is a free country. Protest with your feet if you don’t like it, or protest with your votes and change it.


  • finn on said:

    Wrote about this last night. I say the move will cost Philadelphia more in the long run…but desparation does funny things to people.
    Here’s what I’d do…
    1. Take the ads off blog. Consider it “$300 earned” if you have to.
    2. Incorporate yourself in Delaware – It’s cheaper than the license and helps with liability – blogging 101 tip. You pay taxes quarterly, but now those expenses can start becoming tax write-offs.
    3. Put ads back on blog. Delaware doesn’t have the same laws

    And if the city persists.

    4) Use affiliate links.

    And if that doesn’t work

    5) Make affiliate sites and practices offsite SEO

    And if that doesn’t work

    6) Leave Philadelphia. It’s not like you’re living in Key West. Many cities are embracing tech companies, are shockingly cheaper and have better weather. And the Eagles aren’t gonna be that good this year anyway.


      • finn on said:

        Well, there in lies the question. I think if you’re running ads you should incorporate yourself if for not other reason than to CYA. Quartely taxes and all. That’s not my concen.
        But here’s a question:
        Is it, ‘make money for your blog,’ or is it ‘your blog makes money?’ or ‘you use a blog to make money?’ And, yes, the semantics makes all the difference.
        Because it’s not that the blog they’re taxing, it’s the address that is getting taxed – privledge of being a Philly blogger. And if they’re making $50 a year, they’re probably running adsense or something where they’re getting paid per click. The transaction takes place on the Philly blogger’s site.
        So, you are a Philly blogger with a Philly address. Great. leave Philly.

        But if you incorporate yourself as a Delaware company, have your site hosted in, say, Provo, UT and send traffic to another site that’s hosted in say, Atlanta where the transaction takes place, you didn’t use the Philly address to make the transaction. Why should Philly get an additional cut?


        • Rae Hoffman on said:

          I’m guessing their reasoning is that the blogger lives in Philly. Without the blogger, there would be no revenue for the blog to make regardless of how/when/why/where.


          • finn on said:

            …and if they’re using the Philly address, then until the change the law they’re subjected to it.
            But …
            1) with affiliate links, the blog itself didn’t generate the revenue. The transaction doesn’t happen on the Philly blogger’s blog. The blog provides a lead. If they lead pans out, they get paid a sales commission – which should get taxed (and then the City gov’t can spend more on filing the paperwork for the tax than they will receive in tax revenue). But in order to win that they might have to…
            2) Incorporate out of Delaware, then the Delaware address has the transactions.

            I agree with you. If Philly wants to be that smothering, people will have to pay the price until they win their fight.
            My point is that there’s ways around it – aside from moving across the line to Camden. And the ways around it involving incorporation, to which we both agree.
            I just hope people start looking for solutions starting….now!


            • Rae Hoffman on said:

              “with affiliate links, the blog itself didn’t generate the revenue”

              Really? Cause the government sure taxes me for making that revenue off a blog – so why can’t the local government require a business license as well? With affiliate links, you still earn revenue based on an initial action that happened on your blog.


            • finn on said:

              “If Philly wants to be that smothering, people will have to pay the price until they win their fight.” – I didn’t say that cities couldn’t try to invoke business licenses on recreational bloggers. Once again I agree with you.

              But everybody is arguing two different things. Two things which, in essence, are mutually exclusive:

              1) Should bloggers with ads be incorporated and taxed? Sadly, yes. Reporting it will usually help the blogger more than hurt it.

              2) The issue in Philly: the license. The license isn’t about the blog, it’s about being a Philly business with a Philly address. Philly can hit most bloggers because most bloggers signed up for the services using their home address. Their Philly home address. That’s how recreational bloggers are probably getting found out. But, going after recreational bloggers will just end up costing the city more in the end. Go after little kids lawn-mowing businesses while they’re at it. Tax the lemonade. In for a penny…Learn’m young.

              Now, the story changes if you incorporate in Delaware (where 50% of businesses in the US incorporate) and use the Delaware address. If you don’t use the sacred Philly address, then you shouldn’t subjected to the fees (glad I don’t live in Philly. I’d be contacting a lawyer at this point). You don’t get the prestige of a being a Philly-based business without the license, but it would save you a couple hundred after being incorporated.

              Unless I’m missing something about corporate law. Either way, the law is unconscionably vague in its application to recreational bloggers.

              And when does blogging with a couple adsense ads become a business and when is it additional income? When is it considered simply a gift? (under $1000 is typically the rule). Not the mention the difference between “place of transaction” and “commission.”

              I’ve taken up enough inches.
              Thank you, Lisa, for making me think. Thank you, Rae, for thundering at me. I need those challenges! It’s the kind of stuff my old boss, Adam Riemer, still throws at me.

              Your humble follower,

              Finn


  • Rhea Drysdale on said:

    Information on the BPL:

    “All businesses and self-employed persons in Philadelphia must obtain a Business Privilege License. A Business Privilege License and Business Tax Identification Number are required for all businesses and self-employed persons in Philadelphia. It is also a prerequisite for obtaining all other licenses specific to different businesses.”

    It sounds like this is nothing new and bloggers smacked with the “tax” were simply being held accountable for not operating a legitimate business according to pre-existing business regulations in the City of Philadelphia. This is being blown out of proportion for “bloggers” who are suddenly realizing that when you claim income on your taxes for your blog, you are now running a business and must abide by the same regulations as other business owners set forth by the nation, state and city in which you live. We can argue the legality of the BPL, but frankly, that’s an issue that Philadelphia business owners (I mean bloggers) need to address to their representatives.

    I agree with the sentiment that bloggers need to accept that the moment they take money from their blog, they are running a business. I don’t care how much you’re taking or for what purpose, but you must claim that income. Why? Because I have to for everything we take in, even those SEO trademark “donations.” And, if you owe some incredible amount more than you made, then you aren’t adequately filing your taxes or running your business (I mean blog). Taking money to cover your hosting? Why aren’t you claiming hosting as a business expense?

    Welcome to the world of being a business owner. I’d love to start a little coffee shop out of my apartment, because I make phenomenal lattes and it’s something I’m passionate about. Unfortunately, the City of Troy would shut me down for health code violations, zoning issues, improperly running a business and so much more. We have business regulations for a reason. If you have a problem with that and live in Philadelphia, go protest. Contact your local representative and demand to know why making money from a blog should be subject to the same regulations as running a small business. You might have a significant case that you are not benefiting in the same way as brick and mortars, but bitching about it on blogs isn’t the answer, get political and smarten up.

    In fact here’s a link to your local representatives in case you don’t know who they are:
    http://www.phila.gov/citycouncil/CouncilMembers.html

    Also, here’s the City on Twitter. It looks like only three individuals have bothered to hit them up so far:
    http://twitter.com/PhiladelphiaGov

    You’ve also got a City Council meeting on 9/16/2010 at 10am:
    http://legislation.phila.gov/calendar/

    #justsayin


  • Rae Hoffman on said:

    You know what’s funny? I’ve always paid a “blogger licensing fee” because my blogs have always been classified businesses and it’s a lot freaking higher than 300 dollars folks. If you can’t make enough off your blog to make the 300 dollar fee worth it? Then your blog sucks, no one cares what you say and you can rip down your 90 ads and blog on a personal level. Then at least you don’t have to pay to not be read.


      • Rae Hoffman on said:

        If you’d make to make a valid point aside from “I don’t like the way Rae refuses to pat people on the head gently and simply makes the hard point without beating around the bush” feel free Donna. My “arrogance” doesn’t change the truth behind the statement.


    • Amanda on said:

      It’s not that bloggers-who-happen-to-live-in-Philly are averse to paying their taxes. Most of us (myself included) already DO, and then some, through city wage tax, state tax, federal tax, medicare, social security and (if applicable) self-employment tax.

      The issue is simply that many (most?) bloggers do not make money on their blogs. So collecting $50 in revenue over 2 years and then being asked to pay for a Business Privilege Tax license ($300) plus 6.45% of earnings ($3.13?) is ridiculous… at least for something someone has done out of their own interest.


      • Rae Hoffman on said:

        “collecting $50 in revenue over 2 years and then being asked to pay for a Business Privilege Tax license”

        And the counter point is, if ALL you have collected in TWO YEARS is fifty dollars in revenue, why are you adverse to taking the advertisements OFF to avoid said license fee? That’s not even 14 cents a day? Why the hell bother having advertising up?


        • Amanda on said:

          I don’t know. It’s not my blog.

          The proposed $100,000 threshold would be more than enough to satisfy most “recreational” bloggers. But the larger issue is that Philadelphia’s Business Privilege Tax + City Wage Tax makes it one of the most expensive cities to operate ANY business in, regardless of its specialty, and is the reason why we lose businesses EVERY YEAR despite having a comparably low cost of living to everything else on the eastern seaboard.

          This is a perfect example of why, for example, Richard Florida (an author/ economist) has written about the “Flight of the Creative Class”. Smart, savvy entrepreneurs know that moving from hostile business environments like Philadelphia in favor of places like Toronto, even at an initial monetary loss, is a sound long-term business decision.

          We’ve talked about it before. I would give my right arm to leave this city if I could.


          • Rae Hoffman on said:

            Right, I’m just saying “well my blog only makes 32 dollars a year” isn’t much of an argument against it… if your blog only makes 32 dollars a year then you either suck at writing, promotion, monetization or all of the above and pulling DOWN the ads shouldn’t matter if you want to avoid the fee. If that makes sense.


            • Amanda on said:

              I agree, but I think our agreement may create a barrier to entry.

              If we require that a blogger who intends to make money on their blog register as a business, I wonder how many people won’t even attempt one? I guess you have to register as a business after you start making a profit? Here Iin Philadelphia there is a late penalty if, say, you have generated ‘business revenue’ and haven’t applied for a license.

              Taking nothing from you at all, Rae, but I don’t think there are nearly as many people out there who “wouldn’t have allowed myself to fail if you’d tied a fucking anchor on my neck”.

              But then maybe those people should never try?

              I guess, in that way, this license and tax is like Business Darwinism.


            • Rae Hoffman on said:

              “I wonder how many people won’t even attempt one?”

              Probably the same ones making 26 dollars a year because they have no interest in treating it as a real business. :)


            • David Zemens on said:

              Everybody can’t be financially successful at blogging. It’s impossible. Your business – as a result of hard work and a myriad of other skills – has made your business blog a success as well as your personal blog. Hats of to you with *all the credit due* for the energy, skill and sweat equity that it took to get there. You guys rock and I acknowledge that.

              But that’s not gonna happen for most bloggers. For an assortment of reasons. So they try to recover their hosting fees through some crappy Adsense ads. Quite frankly, it feels good when your little blog gets a PayPal deposit from “Google” for whatever little amount it is. For many people this validates why they write. Is it to make money? Not really. It’s a validation process in their mind.

              It’s kinda like the city coming around and shutting down the seven year old girls lemonade stand because it doesn’t have the necessary permit and licensing (read: tax) in place. It just sucks.

              My .02 cents. Keep up the good work here.


            • Rae Hoffman on said:

              “It’s kinda like the city coming around and shutting down the seven year old girls lemonade stand because it doesn’t have the necessary permit and licensing (read: tax) in place.”

              Ten bucks said they would if the amount of lemonade stands in your neighborhood was the same as the amount of useless blogs on the internet. #justsayin

              I’m not saying people shouldn’t blog… I’m saying if you’re not making any money and still want to blog, then it should be about the PASSION. If your passion isn’t worth 10 a year in domain registration and 5 dollars a month in hosting to YOU, then what value is it to anyone ELSE?


            • Rhea Drysdale on said:

              Amanda – “If we require that a blogger who intends to make money on their blog register as a business, I wonder how many people won’t even attempt one?”

              This is a bigger issue. Grow your community and blog, THEN monetize. Understand your audience, develop content, create a point difference, have a growth strategy, THEN monetize responsibly. I’m a bit hypocritical here as I don’t have properties like Rae. My baby is Outspoken Media 100%, but we approached it like a business with a plan, an understanding of the market, an editorial calendar, goals, etc. If someone is just “testing the waters” with their blog then I don’t see why they would even attempt to monetize, yet. If it’s a matter of money, get a business loan, a partner or an investor just like every other legitimate business with no cash for startup costs.

              Otherwise, it is a labor of love and that means you should be willing to front the minimal cost for hosting, registration and maybe a theme. If I want to play on the beer league softball team, I owe them $60 not counting the cost for my equipment and time. That’s a hobby that I choose to pay for, I don’t expect to make any money from it.


            • Karen Cruz on said:

              I think that is a very unfair assessment. I have been to many well written blogs, but I go there for the content. Unless I see an ad that stands out and I must know about, I do not click on it. To say someone sucks at writing because their readers are not clicking the ads is just plain ignorant and whether someone clicks on an advertising or not, holds no bearing on the blogger’s capabilities of writing good content.
              Seriously this is what people are resorting to as an argument? You have no control who clicks on your ads, at least you aren’t suppose to nor offer incentives for people to do so. I really believe this was a ploy just to get comments, it worked. I’d love to see your next topic up for discussion. Pay taxes on income derived from Adsense and other such revenue sharing, I agree, But to say you are now a business because you carry such said ads on your Photoblog about your 1st year of marriage and the wacky adventures of your golden retriever Butterscotch… Come on, that’s ridiculous. There is NO either/or, no cut and dry here. Tons of people blog, as a from of therapy, to keep family out of town/state/country updated, so many other reason besides just for fun or just for business. There is such a thing as a middle ground.


        • Karen on said:

          Some bloggers use advertising to cover operating costs. They pay $100 a year for hosting, domain registration, etc. If they can earn $100 all year in advertising dollars, they break even. They don’t want to earn money from their blog; but they don’t want to LOSE money, either. In this case, they are NOT earning a profit, just covering their expenses. I think that’s a valid argument for maintaining advertising even if you’re not making a reasonable income from it.

          U.S. Tax Code keeps people from paying higher taxes than they’ve earned in income. This is why percentages make sense for taxation instead of flat fees. I wouldn’t take issue with the fee if it was a percentage of income.


          • Rae Hoffman on said:

            “They don’t want to earn money from their blog; but they don’t want to LOSE money, either.”

            How would they be losing money if they blog for hobby any more than a someone who loves roller skating “loses money” when paying the entry fee to a roller rink several times a year? If someone loves to run, they encounter expenses in shoes, clothes… are these “losses?” If someone likes to build jigsaw puzzles, is it “losing money” when they spend the money on purchasing those puzzles? If you truly love the hobby and find it worthwhile, you’ll gladly pay for your “supplies” to do it.


            • Karen on said:

              I see you point, but I disagree with your logic. If I’m a runner, and someone agrees to sponsor me and cover my race entry fees, shoes, etc. (but not pay me any income beyond my expenses), should I then be considered a business?


            • Rae Hoffman on said:

              “If I’m a runner, and someone agrees to sponsor me and cover my race entry fees, shoes, etc. (but not pay me any income beyond my expenses), should I then be considered a business?”

              You know as well as I do though that 1. people who say that really aren’t looking to only cover their operating expenses, they simply aren’t making *more* than that. Secondly, that’s a one off example. If you made apple pies and gave them away – hobby. If you made apple pies and sold them – business. If you made apple pies for a church bake sale – one off example.


            • Ryan Jones on said:

              But when it comes to laws, there’s no place for one-off examples. They have to be taken into account by the language of the law – and that appears to be the problem here.

              A shoe store needs to pay a business license before it can sell its first pair of shoes. If blogs are businesses, do they have to pay the business license before they can even publish their first post – even if they don’t have ads? It’s a slippery slope.


      • Jeremiah Andrick on said:

        Not that she needs it but I would agree with Rae on this. For some reason because these are bloggers we want to treat this as different from anyone else who chooses to do business within a particular municipality. This is not a tax on free speech. Its a tax on a funding model. Every state and city has rules that govern commerce and while the individuals who are running these blogs may not be making huge sums they are subject to the same laws as anyone else. I am not a huge fan of these municipal business licenses because I do think they discourage entrepreneurship, but guess what it is the Law. If you make an income from self-employment or from a business you start you fall under the law.

        If you live in philly and you don’t like it; speak out and get them to change the rule or lower the fee. Unfortunately, there is always a cost to doing business. Money does not rain from the sky and if you want to make money you can’t imagine that it will fall from the sky and the government won’t come looking for their cut. Either do it for rainbows and unicorns (i.e. free) or man up and learn to deal with operating expenses.


  • teevee on said:

    It’s a business. Pay your taxes. Is it fair? Probably not. Once again, that’s business.

    If you do it for your passions than keep ads off and do it for the love.


  • Ryan Jones on said:

    I’ve never considered blogging a business. You’re not selling anything or providing any services. I don’t think a business license should apply here, however I do think paying taxes should.

    If you make enough you get a 1099 every year at tax time from Google, Casale, Adbrite, TribalFusion, RockYou, or whatever ad network you use. I declare my earnings on my taxes, and make sure I write off all the hosting, domain names, and other expenses.

    For many (the authors of this blog excluded) blogging is a hobby, not a business. the real issue here is the business license, not the fact that bloggers have to pay. They should pay, just not in the form of a license.

    To me, poker and blackjack are hobbies. I make money each year at casinos. I pay taxes on it like I should, but I don’t think I should have to register myself as a business.

    I just don’t believe that all blogs are actually a “business” – many can be hobbies, and there are plenty of hobbies out there that make a small profit (bowling, pool, darts, softball tournaments, etc..) Those shouldn’t be businesses either.


    • Kathy on said:

      Ryan,

      You made more sense than any other commenter here. Thank you for that. I was really struggling to find some sane logic in the ideas being thrown around.


  • James on said:

    To my highly educated and humble mind, this issue comes in two parts.

    1) Businesses, where the term encompasses and individual or group activity performed for a profit have to pay $300 for a business license.

    2) Blogs with revenue streams are being counted as businesses.

    You can argue #1 until the cows sneak in after curfew, it’s going to come down to whether or not you believe business licenses are necessary or not. The tax or no-tax argument has been running for so long, I don’t think it needs to be rehashed here.

    Point #2 is more contentious, but at the same time, from an enforcement point of view, there has to be a simple method of assessing whether or not a blog fulfills the role of a profit making activity and the simplest and most reliable method of doing that is determining if the blog is generating revenue for the owner, whether through the sale of advertisement and/or services or affiliate earnings.
    If you have a bank of ads on your blog, then you are clearly trying to generate revenue, otherwise, why uglify your blog with them? Whether you are successful in that endeavour isn’t really relevant, you are trying to make a profit, therefore you are a business under the definition currently being employed in the BPT and you have to pay the tax just as a self employed plumber does.

    If you don’t want to pay this tax and you blog in Philadelphia, remove any revenue generating functionality and blog for fun. Otherwise, as the lady says, put up and shut up.


  • Ryan Jones on said:

    I agree that “if you only make $32″ then just leave off the ads until you get enough traffic to justify them.

    The issue I have is assuming that all blogs that make revenue are a business – as I don’t think they are. In the real world, you need a business license to even open up shop (regardless of whether or not you’re selling anything or making money)

    Does this mean the city will futher extrapolate this in the future to say that all blogs must pay the $300 fee regardless of whether or not they include ads.


  • Alan Bleiweiss on said:

    This is one of the reasons I <3 your articles Lisa. the dialogue has been great and given me a variety of insights that I hadn't looked at before. I think the bigger issue is that there are even government imposed costs on anyone running a business even if that business is not reaching a certain threshold. So the little guys who make $50 a year (or no income at all), still have to shell out the money just to play.

    I don't think such people should either be forced to pay or belittled for their individual effort. But then I'm an idealist in that regard. Better the greedy politicians paying off their crony contracts be dealt with.

    As far as those complaining about the double-hit (license and then tax on top of that) I don't buy that angle. Just deduct all your business expenses (home office, equipment, supplies, travel to Disneyworld (oh uh, I only did that one time, though it passed muster in the IRS audit I got hit with the following year because I collected receipts and considered doing web work for the vendors down at Venice Beach)…


  • Norcross on said:

    When I first saw the article going around (with all the ‘this is bullshit’ commentary) I assumed it was something bigger than what it was. But many people have made the point better than I could: if you’re a business, you abide by the rules of where you live. I think of it this way: I’m a freelancer. I work from home. Yet I am required to pay both a state (Florida) and city (St. Petersburg) fee for operating my business, although I use no services that I am not already paying for with my regular taxes. Do I pay them? Yes. Could I get around them? Probably, but the $100 or so a year isn’t that big a deal in the grand scheme of things.

    So the folks that make $30 bucks off ads that no one clicks on? Either (a) Get rid of them (b) pay the damn fee or (c) move.


  • Tony Verre on said:

    Lisa:

    First things first, we need to address this point by point:

    1) Most people actually do blog just to put their thoughts “on blast”. That’s exactly how I started blogging years ago. I wrote political commentary, opinion, and ideology (I won’t even link to it, cause it’s awful. But it’s still right on. :-) ) I was serious about it and I’m sure not a single soul read it. What I can’t argue with is if someone is attempting to monetize the blog hobby, then, maybe, there should be a tax.

    When I think about that first blog, and if I’d put AdSense on it, I would have made NOTHING. And, even though my writing was serious, it was a “whenever I had time” thing. A tax to write as a hobby? C’mon, that’s just bogus.
    And, if you really do feel that way, then hand-written notes/journals are comin’ back in a major way. :-)

    2) “Scared to Fail”. Nope. Definitely not. Not in these comments, not anywhere. But that’s just me as a person. Most people who write just to maintain/relieve their sanity don’t give a flying hell if it fails or not. Hobby, sometimes, really is just a hobby. And, think about Blogger for a moment. Think about how easy GOOGLE makes it to monetize your shitty hobby blog. 1-button click.

    No one who writes just for idea expression believes they’ll make dime one. They’d consider it a bonus if Google actually sent them a check for a shiny copper penny.

    3) The real sinister act behind this tax is effectively discourage people from speaking and expressing thought. While they may be imposing on those who monetize blogs, it’s a blatant fear-imposing tactic by the Philadelphia government to crush voices. Except, of course, those willing to pay for their voice.
    You mentioned in your tweet to me (http://twitter.com/LisaBarone/statuses/22012416411) you had trouble seeing the First Amendment issues behind this. The issue is the taxation of voices. It’s a deliberate control of a medium to squelch unworthy ideas and voices in favor of voices that paid for the right.
    The Philly, PA government should find other areas to recoup from to balance the incredible debt they’ve manufactured. A $300 tax to bloggers is a drop in the bucket. Ridiculous, to think that there would be anything to gain from the, say, $100,000 from AdSense Bloggers.

    It’s an elitist control mechanism to silence voices, much like credentialism (something still goes on today: i.e. college degree vs. high school diploma, bachelors vs. masters, etc). You have to pay-to-play to be heard. It’s a matter of economics vs. ideology.


    • Ken on said:

      Tony’s point #3 is what everyone is missing. It’s an entry barrier imposed by the government. Think of your City Council charging $150 for a “speakers fee” if you wanted to address them. Sure, you may get better speakers of better quality, but you silence voices.


  • Kim Krause Berg on said:

    As someone raised in the Philly burbs, one of the reasons hundreds of thousands of us moved AWAY (out of state or out of city limits) is because the city is notorious for taxing the shit out of anything that dares step on its cobble stoned streets.

    I can’t tell you how many extremely talented and skilled technical people will not accept any job offers from inside Philly. This is because they would be forced to pay for the privilege of working there (the famous city wage tax.)

    Taxing a blog should be dependent on the type of blog. And, the term “blog” is no longer limited to “online dairy or journal”.

    For example, there are more web-based businesses running on blog software. Other sites use static blog “pages” and pull in a script from the blog to keep their homepage fresh. This isn’t technically a blog. Both have adapted a blog back-end morphed it into something else that may or may not ever look like a typical blog.

    If a web site is a business (defined as person or persons gathered for the purposed of generating revenue), uses blog software for their static pages and a content section (some don’t even call it a blog anymore) – is this taxable?

    Yes, but not because its a blog or blog like, but because it’s a website business, no matter how it’s built. The hoopla over “taxing blogs” is not the point. It’s taxing web sites that may or may be earning revenue that’s at issue here.

    Should a teenager who puts up a blog using Xanga be taxed? If you have a teen who has used it (I have), Xanga is the teenybopper precursor to Facebook. Today’s Facebook, for young people, is blog-like. Taxable?

    What if we take it another step and switch to a Facebook “page”? Why hasn’t anyone started to tax them? These pages are for businesses and yes, they can earn revenue from them.

    If taxing is the mod cool thing to do, let’s tax WebmasterWorld, HighRankings Forums, Cre8asiteforums, DigitalPoint forums, etc. They have the “potential” to earn income. They’re free to join (WMW has a fee area.) But using some of the logic I see here by some folks, it’s time to charge members so we forum owners can pay taxes.

    (I pay taxes on any ad revenue for Cre8 out of my own pocket even though the name “Cre8asiteforums.com” is not a business. The only revenue we now get is via our forums blog, not the forums themselves.)

    Anyone who uses Google AdSense gives their SS# to Google so that Google can report the earnings. Those bloggers or site owners may not consider themselves a business. Many are blog scrapper sites. Anyone taxing them?

    It’s very telling when a city demands money without checking out circumstances first. Do we demand a tax from a 13 year old blogging about acne or a young adult writing about purple peppers and locally grown corn? Do we really want to demand taxes from a new tiny business operating on free blog software, free domain and a laptop from their kitchen table who hasn’t earned any money yet. They might not think of themselves as having potential but a pathetic city government does. Taxing situations such as the above is not going to create a way out of the recession we’re in.

    What is the difference between that teenager and the woman used in the Philly CityPaper story, who has a no-ad, free wordpress-hosted blog in which she likes to write about organics and green living topics? The city came after her for a business license. She’s not running a business. She didn’t register one. She’s not a 1099 sole proprietor. But Philly came after her because they feel she is a “potential moneymaker”.

    Are you freaking kidding me? Any one with a body is a “potential moneymaker”!
    (Legal or not.)


  • Rob Woods on said:

    I agree that if the blog is run with the express purpose of making money the owner should pay their fair share of taxes. For those casual bloggers who write primarily out of passion for a subject and happened to put a few ads up to offset hosting costs, etc. I think it would be fair to allow them the choice to either remove the ads or continue running it as a business. It would suck to get hit with a $300 bill for publishing a blog not meant as a business but 300 clams is really a pretty tiny sum for everyone to get so worked up about. What I don’t get, and I’m not sure any jurisdiction has a good handle on yet, is how do you actually determine that a blog is “from” a given location. If I live in Philly, and write a blog about Alaska, that’s hosted in California, is the blog from Philadelphia? How about if I write a blog about Philadelphia restaurants on a site hosted in Philadelphia, but live 2 miles outside the city limits? Is that blog “from” Philadelphia? How about if my home is in Philly, I write about Philly, but I do my writing at a coffee shop in Reading. PA? It’s not so much the cost as the fact that the law seems completely unenforceable. How much tax revenue could they possibly collect? A couple of grand? I can’t see it as being enforceable except primarily on blogs run by businesses already operating in Philadelphia, which means they already have a business license.


  • JM on said:

    The problem isn’t “taxing” the money made, I have no issue with that. I pay my taxes on the money I earn. Although keep in mind that most IRS regulations don’t require a 1099 on amounts of $10 or less, so Philadelphia’s “taxation” of amounts less than that is a bit insane.

    The problems are

    1.) Philadelphia is essentially saying that to speak your mind and exercise freedom of speech online you must pay a $300 fee to do so. You say just “take the ads off” to avoid the fee and continue blogging. Why should they have to? Some people use the small ad revenue to pay for site hosting, internet access, etc. They get a 1099 from the ad affiliates and the IRS gets a copy…they don’t report it they may get caught.

    2.) What can the government do with this sort of information? They are in essence getting the “real names” and personal information of thousands of bloggers, many who might blog about city politics or something that stirs up controversy. They now can have a database of the troublemaking bloggers who stir up dissent against the government or make public information that the city doesn’t want known. How long until these databases get used for more than collecting money?

    3.) Slapping a city wage tax on top of a license fee for bloggers or writers in Philadelphia is absurd. How many “commute” to Philadelphia to do their writing? How many will just stay outside the city? How many college students or people “visiting” for a few months do their freelance work on the road…they have to pay now because they happen to stop in Philly?

    Its wrong, its dangerous to freedom of speech, and its going to fail horribly.


  • Angel Djambazov on said:

    Lisa,

    A poorly written law is a poorly written law. Its existence in Philadelphia may indeed as you hope, a) stop wannabe bloggers from clogging your internet and; b) may add to the legitimacy of blogging as a practice. Both neither of those paradigm shift are likely to occur because of the law’s existence.

    What is likely to occur is that other municipalities will adopt similar tax measures. In the affiliate industry we saw this when New York Amazon Tax. We are likely to see a similar spat of copycat legislation in the case of Philly’s Blog Tax.

    The law is poorly written because it does not take into account:

    -cases where an ad may be displayed in conjunction with content but in a manner that is not controlled by the blogger. Does the blogger have liability for such an ad? Why should the site/network profit from content without taxation that the blogger would be taxed for?

    -corporate blogs whose content is by the very nature itself a form of advertising. will blogs by such companies also have to pay an additional tax even if they are not explicitly running an “ad”?

    And don’t get me started on jurisdiction or enforceability. It is a poorly thought out law that has been passed by a city government who in facing a budget shortfall has passed something they simply don’t understand the scope of.

    I agree that to paraphrase Shawn Collins displaying an ad or paid link is the equivalent of hanging digital shingle that indicates monetization. I also agree with your base supposition that SMBs should be subject to taxation.

    What surprises me is the tone of your post. In poopooing amateur bloggers you are displaying a certain type of classism that I didn’t realize existed within the blogging community. Of course such a federation and the solidarity therein is a myth; still the fact you choose to target the little guy rather than the misguided lawmakers, reeks of elitism.

    Angel


  • Jason on said:

    The local HS football team puts ads on their programs, are they a business? Do the ads in my church bulletin mean my church is a business?


    • Jeremiah Andrick on said:

      No it means they are non-profits. There are rules governing entity types. These orgs may have had to pay some kind of fee to register with the state as well. For the school it is a state run business and I am sure there are laws governing this as well.


      • Jason on said:

        That’s the issue – non-profits, by their definition are not businesses, because they are not commercial nor industrial enterprises, in part due to their non-profit status. The fact that there are other fees, or laws governing them is largely irrelevant to the conversation

        The matter at hand is whether or not displaying ads on a blog makes that blog a business and not a hobby/pastime/etc. Using these non-profits as an example, the only logical conclusion is that non-business organizations, like non-profits, can display advertisements without automatically being considered businesses.


  • Antone Roundy on said:

    A lot of the things people do to try to make money need to be taxed more. A $300 licensing fee for babysitters would weed out the slackers who just watch TV with the kids till the parents get home, and help those who aspire to do better to focus more on honing their craft.

    And we should tax neighborhood basketball. That’d force those punks to get serious about the game. Either they’ve got the skills to get to the NBA, or they should stop fooling themselves and go do something else. Street ball would go way up in credibility if all players were licensed.

    Seriously though, taxing income is one thing. But taxing people for the privilege of simply trying to make money is just a way for established businesses to prevent competition.

    “I don’t think a fee would fix blogging but maybe it would shine a light on some people who shouldn’t be there. If your blog isn’t worth $300, total, in your lifetime, then I don’t want it clogging up my Internet.”

    With respect, it ain’t your internet (and if it IS clogging up your part of the internet, it’s either because you chose to go to their blog, or they’re doing something that really IS wrong by spamming you about their blog). “…people who shouldn’t be there”? I’m not one to call names, but that sounds pretty snobby.

    It’d be a sad world if every time someone tried to find out what they were capable of, somebody taxed them, cut them down, or told them knock it off and go home.


  • Kathy on said:

    Let’s not forget that the IRS will classify your so called business as a hobby if you are losing money from it. I have a feeling that if the typical small time blogger was to add up all of her expenses associated with her little blogging enterprise she would find that she runs in the red year after year. She could deduct half of her computer related expenses, half of her internet access expenses, trips to the office supply store for office supplies, ink, paper and a whole bunch of other expenses. She could even deduct a portion of her other utility bills if she runs it out of her house.

    The problem is that after a few years of running in the red (not showing a profit) the IRS has the right to classify her so called business as a hobby. Then she loses all her deductions. If the IRS is classifying her blog as a hobby, how can Phili government classify it as a business. Sounds like a serious conflict to me…..

    Also, it should also be quite obvious that anyone who is monetizing their blog through standard channels is already paying income tax on their profits as Ryan Jones mentioned above. American companies that pay a non-corporate entity more than $600 are required by law to report those earnings to the IRS and state governments via form 1099. So, if those people did not report that income over $600 to the IRS and state, they most certainly would raise an audit flag.

    These people are already paying taxes. Slapping them with another tax and more red tape that they have to comply with is not good for anyone. I would like to know what new public benefit the people of Phili are going to get by going after these people. I say leave them alone. Most blogs do not make enough money to even bother with trying to somehow collect tax from them. It is a sad attempt by local politicians trying to get more money from people because the government is spend happy.

    I feel bad for those people from Philadelphia. I thought thing were ridiculous around here in NY. Oh wait…. they are. I do agree that these bloggers need to get their voices out and be heard. Vote, vote, vote. Sounds like a lousy place to live if the city is going after people for small change like this. I will keep that note in my mental data bank. I must remember to tell all my friends that Philadelphia is ran by schmucks who cannot differentiate between a hobby and a business. If all the bloggers complained loud enough, I wonder how much the city of Philadelphia would lose from the bad PR? Bonehead politics if you ask me.

    Like Ryan said, there are plenty of hobbies that people make money at. The difference between a real business and a hobby lies in the amount of revenue. In my opinion, people who make a few hundred or even a couple thousand dollars per year are engaged in a hobby. They certainly aren’t doing it because it is so lucrative. Making people pay even more taxes for a hobby is just lowering the quality of life for those people.


  • Kristin on said:

    Lisa –
    Great post and a lot to think about in a way that I wouldn’t have thought before. Initially the blog tax seemed so odd to me, but I also didn’t look into it too much since I don’t live in Philly.

    Now that I read your post I see a whole different side of blogging in general. Blogging is something I’ve wanted to make a business but I’ve always looked at as a hobby and now that I read this it’s actually giving me the motivation to look further into it as a business.

    I absolutely LOVE reading the comments going on here. Not everyone will agree and I think a great discussion has broken out even if some fights broke out as well…

    Great post, great discussion, great thoughts everyone!


  • Ben Griffiths on said:

    As soon as I decided to start using affiliate links and ad space on any of my websites, blog or otherwise, I formed an LLC and obtained a business license. I get 1099’s from my affiliate networks each year, and I pay taxes on that income. I also write off business expenses, such as hosting, hardware, software, etc.

    That being said, I wouldn’t be too happy if I had to pay an ‘extra’ license fee of $300 for the privilege of creating a blog. I agree that there are way too many crappy blogs/websites out there, but I believe in small government. After all, we don’t charge people a ‘license’ fee for wearing ugly clothes that they already paid sales tax on, do we?


  • Justin Germino on said:

    Bloggers should report and pay taxes on their blogging income like any other service for profit, but what I object to is requiring bloggers to have a business license. You can file as an independent contractor and don’t require a business license for many jobs and freelance services, not sure why it would be required for blogging.

    I report my blog earnings and when you factor in my write offs, vs my earnings I actually got better tax breaks reflecting my blogging income.


  • Art FaLong on said:

    I agree with the general push of Lisa’s argument here; serious bloggers should begin to take themselves more seriously. However, not everyone is a serious blogger. Many just do it for fun or to have a voice where they felt they had none.

    That’s a large part of the magic of this loosely gathered set of technologies we consider “Social Media”, blogs included. There is almost no barrier to entry. In theory our democracy becomes stronger when more people are out there to shine light in the dark corners or to make their concerns known, weaker when barriers are put in their way.

    This is the problem for me. The inherent nature of blogging is speech. It takes place in the online medium, which makes it Press. Under our constitution, government has to be careful that its laws, taxes, and regulations don’t have a chilling effect on speech. Imposing a fee that is more than the net revenue is just such a chilling effect.

    But it goes beyond that. I am a ‘hobby blogger’ who is about to take the next step and become a small business owner with an LLC that will then own the blog (and other products I am adding). It’s probably a good legal move for me. But it is my choice to take this step.

    I have resisted taking that step because the numbers didn’t add up for me. When I added up all the fees and business expenses required to stop doing this as a hobby and start doing it as a business, I kept coming up negative. It would actually cost me more money than I was making with my hobby to declare it a business.

    That’s the gap that hobby bloggers are struggling with when faced with taxes and fees like the Privilege tax. They feel like their ability to use social media tools that aren’t free to use is being legislated away. Why should only business bloggers be able to use paid hosting services? Why can’t there be a structure that allows that for hobby bloggers too?

    I am using crowd funding to get past the hobby to business gap. Once I’ve done that, I can’t turn back. I’m committed to the world of accountants, tax attorneys, quarterly filings, state taxes, legal issues, and a whole host of other things I probably haven’t even thought of. Not everyone is cut out for that. Nor should they be required to be just so their voice can be heard.


  • Rufus Dogg on said:

    Reading these comments makes it very clear that almost nobody here did their research before getting into business. If I open a sandwich shop without researching the cost of meat and bread, labor, electricity, etc, etc and it happens that I can’t attract enough people into the shop to make money, that’s my tough luck. Why is that the city’s fault?

    A business license is just one of the costs of doing business that you should have known about before putting out your shingle. A blog that takes ads is not a garage sale. It is not a platform for free speech if you want to get paid through ads. Just because you have a different opinion of what a “for profit blog” is, doesn’t change the fact that you are paid money for something your blog does. If that doesn’t make you enough to pay the bills to run the blog, then you are just really bad at business.

    This is not rocket surgery. You are in business or not. Jezzzus. Did you think blogging for profit was going to be a free lunch? When did you ever get a free lunch? And to be clear, this is not a “blogger tax,” this is a “Business Privilege Tax.” Read, understand then talk. Quit arguing it is a “blogger tax” because you are just flat out wrong.

    If you are sick of living in Philly and paying those taxes and want to move someplace cheaper, get a Dayton, Ohio address, baby! I pay $10.00/year for a vendor license from the county, 2.3% income tax and a few other local taxes. We could use the talent here to build our city! So move here, put up or shut up.

    I’m really kinda tired of all this whining when you should have done your research first. Now go ahead, kick this dog.


    • Jeff Gibbard on said:

      I think you are creating an argument that is for all intents and purposes flawed. Comparing a sandwich shop to a blog is ridiculous. They are not the same. Not even close enough to be compared. You commented on my post in a similar fashion.

      1) Do you really think that the solution to dealing with an unfair licensing fee is to uproot your family and move a state away? That seems like the financially sound decision.

      2) For profit would mean that you are actually making a profit. If you make $5 but must pay $50 for a license, you are now operating at a loss.

      Stop condescending to people because you want to make an argument. Think about the actual implications about this idea. Doing research isn’t at the core of your argument anyway. We get it. If you put ads on your blog you are now a business. Great. Now tell everyone here how you expect that they make enough money with the blog they are trying to build to afford this license. We’re all patiently waiting for your silver bullet solution.


  • Bonnie Harris on said:

    Um….it’s income and profits that are taxed, not businesses. If your blog is making a profit, then you should be reporting income. So yes, under the laws of the United States, as far as I know, it’s subject to tax. But when cities and other government entities start looking at things like blogging to add “special taxes” it’s not fair. Let’s tax anybody that does home crafts – they might be making money on Etsy or they might not, but hey it could be considered a business so you have to pay a special privilege license or tax to do it. What’s the difference between that and blogging? Knitters beware!!


  • Nate Griffin on said:

    When Jason Chen’s house was raided during the leaked iPhone 4/Gizmodo turmoil, how many hobby-bloggers cited that Chen was protected by Shield Laws because even though he didn’t work for the mainstream media, he was a journalist not just a blogger?

    Now, this small business tax is bringing out the “I’ve got a voice, and they’re trying to silence it, man,” tinfoil-hat crowd, which I would bet has some overlap.

    The argument boils down to bloggers who want all the benefits and privileges of being a real-live journalist, but not wanting to deal with the responsibilities that a accompanies it.


  • Alan Bleiweiss on said:

    Joe, not everyone can afford to pay for “professional” solutions. Not because they’re less intelligent, or less willing, but because of a host of societal reasons not directly their own.

    And Rae, a lot of us respect you and others who have built something from the ashes. Yet to insist that people should have to work their asses off to make things turn out the way you were willing and able to is also myopic. It completely discounts societal constraints that some people face when all they want to do is make an honest go at something.

    Maybe it’s the woman who already has four kids – she’s a widow and the insurance company denied her the payout on her dead husband’s insurance because hey, they do that sometimes. Maybe she’s got no family to help her out. Maybe all she wants to do is blog about her life experience, and she has a couple ads on her site because she’s hoping that one day down the road she’ll get enough readers that some might click on the ads.

    No, this isn’t about “it’s a business because some people say it’s a business”. It’s about local governments coming up with asshat methods of generating more income to be further wasted.

    All this high and mighty talk from so many people bitching about the whining is, itself, whining.


    • Gareth on said:

      Well, let’s see the other side of the medal.
      For 50 dollars / year you can have your own online business activity, right ? I mean it’s called “Business Privilege Tax”… If you are serious about your activity it’s not that much and comparing to my country where to open a business you have to spend a lot of money in attorneys to have your own business, it’s quite cheap.
      If there will be the 100.000 dollars thresold it will be even more juicy.

      I mean, nobody is blocking anybody, but if you really want to write about your experience, use FACEBOOK NOTES! They can be equally viral, it’s free and you have to create your own network.


      • Kahlan on said:

        Gareth, have you TRIED using Facebook notes recently? Honestly? Every time I try to use them, they screw up the format on what I write and not just to me either. I know several others who are having the same probs, which is why I opened a wordpress blog to keep friends and family up to date with something I’ve been working on. The blog sites are hell of a lot easier than fighting Facebook notes, when half the time I’d post something, they’d post a blank page and if I hadn’t written or copied the entire post to another writing program before hitting “post” I’d have lost it. FB is not the greatest place for that.


    • David Zemens on said:

      No, this isn’t about “it’s a business because some people say it’s a business”. It’s about local governments coming up with asshat methods of generating more income to be further wasted.

      Spot on. Alan gets it!


  • Chris Miller on said:

    What is a “blog”? A CMS focused website, typically accompanied by bitchy and/or whiny content written in sub-par English, updated on a semi-regular basis.

    What does that have to do with business? Or taxes? Not a damn thing, right?

    If I make a lot of gold on World of Warcraft, turn around it sell it to my buddy do I owe taxes? There’s a law for that. If I become known in all of Azeroth and sell WoW gold for $100 a day for a full year, do I owe taxes? There’s a law for that. Is it reasonable to go 160 comments deep into saying “buuut moooom, I was just playing a gaaaaaame!”? I’d say no, but apparently I’m out-numbered.

    Not that I’m expecting anything more than bitchy and/or whiney comments from “bloggers”, mind you. I’m just fanning the flame. I’m an SEO, I’m here for the link. And the drama. Fun stuff.

    Great post Lisa!


  • Dan Connolly on said:

    Thanks Lisa!
    This post was a light bulb moment for me. Not so much about the subject at hand, more about how to create an explosion of comments on a blog. Really well done!!!


  • Adam Singer on said:

    Love ya Lisa, but you’re wrong here. Mike @ Techdirt does a good job describing why (http://www.techdirt.com/articles/20100823/10234910740.shtml):

    “It really is amazing how confused various governments are in an internet age where it’s easy for lots of people to make little bits of money on the side. They simply can’t figure out that such things are not a “business.” We’ve seen the same thing in the past with various local governments demanding that folks selling on eBay need to get an auctioneer’s license. And then some people wonder why citizens are fed up with their government representatives?”


  • olivier blanchard on said:

    Eh.

    The law is the law. If you want to change the law, apply pressure on your elected representatives. Bitching about it won’t do a whole lot of good. Don’t like something? Change it.

    What we’re talking about here is a business license, right? okay, so that’s just part of the cost of doing business. I hate that there have to be barriers of entry, but that’s just how it goes. Caesar always gets his due in the end.


  • Beth Harte on said:

    Lisa, agreed. If you are making money from your blog, it’s a business. As we know as Americans, all business is taxable–no matter how small. If a Philly blogger only makes $50-299 a year from blog ads, take them down. Any smart business likes to stay in the black, right? Paying that $300 ‘privilege’ tax will put you $1-250 in the red.

    My comment on Twitter when asked about it… “You voted for it.” If you don’t like the City’s politics (liberal) or taxes (high) move to the suburbs.


  • HART (1-800-HART) on said:

    I wanted to comment before reading any other comments … so, this might be in left field :D (from a Canadian Perspective)

    The difference between a business and a hobby is that a hobby is an activity not engaged in for profit (paraphrased from your IRS and similar with our CRA). Just because you place ads on your blog doesn’t mean you are meant to make money from them. Recouping expenses is not a revenue making function, but expense reduction. If you use your vehicle for work and receive a vehicle allowance, it is to compensate you for your expenses like gas, maintenance, etc. Should you be charged for a Taxi License because you drive your kids around in your car that receives money from your work?

    I am self-employed and blogging and its costs and revenues are like a ‘division’ of my whole business and report all my earnings received regardless of how puny or insignificant they may be truly be. But, you can bet your life I am also as vigilant on reporting all my expenses that I consider related to my self-employed business – both online and offline. There’s room for give and take.


  • Andrea @multiplemama on said:

    Let’s just be clear and see it for what it is. The govt. does not really care about the quality of your content. They care about the content of their wallets. Instead of leaving the $$$ in your hands they want to tax you so they can decide which “program” the money goes into. So that instead of a legit economy we have their economy, instead of legit jobs, we have jobs programs and extended unemployment benefits. Just saying.


  • Beth Hodgson on said:

    I think what a blog is needs to be defined. I run a business that offers a lot of professional blogging services – none of my clients have any form of advertising on their blogs and I pay taxes as any other business would. I know that’s not what we’re talking about here, but that sets up my point which is that the term “blog” or “blogger” gets lumped into apply to numerous contexts…most often being those who rant about whatever on their blogs with no intended purpose. Some do advertise, though most of these make pennies. Most don’t do anything with their blogs at all. I think you’re seeing outrage because “blogger tax” is assuming that it’s being applied to everyone with a blog whereas it needs to be better defined.

    If it’s a business who runs it, then those advertising funds should already be rolled under income, which they’re paying tax on. should there be more? I don’t know. Maybe..it is a legitimate source of revenue. People who are using personal blogs as a business? That might be fine, too. I’ve been a big believer that a lot of the “mommy bloggers” out there that receive sponsorship etc are actually promoting a brand, even if that brand is just them. If it’s turned into a source of revenue, then tax is probably appropriate. If they’re marketing themselves, then who can argue it’s not a business?

    BUT those just typing out the story of their day on LiveJournal (is anyone still using that?) maybe making a few pennies by signing up for AdWords isn’t a business, it’s no source of revenue, it’s entertainment with the chance to make a couple of bucks. THe people revolting against this, may be right. Everyone else who fits into the above categories that are still whining probably just don’t like the idea of paying more tax…but having to do so may be justified.

    The bottom line – better define what constitutes a “blog”


  • Jeff Gibbard on said:

    I don’t think I could possibly disagree with your blog post more. I’m not here to flame your post but you are forgetting the origins of this medium. Besides that I’d like to offer my counter point to your various points, instead of clogging up your blog comments, I’ve posted my response on my blog that I have no intentions of paying a dollar to continue posting to.

    http://tumblr.socialmediaphilanthropy.com/post/1010638099/response-to-why-bloggers-should-put-up-shut-up-pay


  • Ken on said:

    Lisa,

    If a writer earns income on a publication I think they should pay income tax on that. However, I disagree with the way Philly wants to tax this because of the license fee.

    Is free speech a privilege or a right? Or is it only a right to those who can afford a $300 business privilege license? The internet has given a voice to those who formally could not afford to buy newspaper or television time to get their word out. If I only have $5 do I have any less rights then you? $50, $500? See, it’s hard to draw the line when we’re supposed to all have equal rights.

    Bottom line, the government already has it’s hand too far up our daily asses and enough is enough. You know the real reason for this is to silence the little guy and try to reestablish the bought and paid for global propaganda machine that is mainstream media.


  • Trish on said:

    I have to agree that internet profits should be taxed same as any other business income, but even the IRS has a minimum self employment income that has to be reached before you owe tax. I think charging the same tax to a blogger who makes $5 a week compareg to one who makes $500 just isn’t the right way to go about it, so I am glad to see the profit minimum put in


  • Matt on said:

    While you may think this brings professionalism to bloggers there are a number of us that are not “raking in the bucks” yet and $300 today would be a stretch. The only reason this is being considered is because they are not collecting normal taxes like they should. The money “should be” reported as income and would be taxed accordingly. The added bump is not necessary and should not be considered. Next thing you know we will be taxed on air since everyone keeps breathing it.


  • Dan M on said:

    Lots of great comments! I’m a bit late, but there is something I wanted to add:

    While I’m not really against taxing bloggers from a cost perspective, I do worry about how such a tax would be implemented. Specifically, how would the government manage and enforce it? A few potential problems:

    1. Are all new bloggers going to have to get a blogging license before they start out? What kind of waiting period would that entail? The internet moves a lot faster than any governments I’m familiar with.
    2. Similarly, what exactly counts as blogging? WordPress, obviously, but what about Tumblr? And “micro-blogging” services like Twitter? Other social networks? I don’t see how any government could define and keep track of so many ever-changing technologies.
    3. From a technical standpoint, this will be extremely difficult to enforce. Is WordPress going to learn the laws of every state and validate a user’s location before giving them a blog? For that matter, how do you even pair a blog to its blogger’s location? Especially for blogs with multiple contributors who may live in different states with conflicting laws.
    4. And how does the government expect to catch people that aren’t paying their tax? Is it going to be someone’s job to look at blog all days to spot violators? Am I going to have to put a badge on my blog that has my blogging license number?

    …And I’m sure there are many more issues. So whether the tax is right or wrong, I really don’t think it will get off the ground anytime soon. If it does, a trivial cost will be the least of my worries :)


  • Tom Pick on said:

    Lisa, I’m a huge fan (as witnessed by the inordinate number of times I’ve quoted you on my blog). But you are absolutely wrong on this. Alysson is right.

    In this country, everyone has the right to express their opinion, and no one should be forced to pay to do that (as if our current level and variety of taxation isn’t already ridiculous). Of course, having the right to speak doesn’t mean anyone has to listen to you.

    Same with blogging. Whether it’s a hobby blog, a business blog, a hobby blog with AdWords on it, whatever – the writer will be taxed on any income generated from the blog. There is no need or justification for additional taxation. That said, as with speech, the right to write doesn’t necessarily imply a right to be read. But bloggers should be judged on the quality of their output, not on their ability to pay to write it.


  • [Keyword Anchor Redacted] on said:

    This is an interesting conversation. I think that Blogging should be considered a business if the person running the blog considers it such. Just because they place ads on the Blog doesn’t necessarily turn it into a business they may be doing that just to pay for the expenses of their “hobby”. Now what they could do is charge a tax after a certain amount of traffic and/or money is made from the Blog if they want to start taxing people. But you find people all the time, theres a guy with a truck full of watermelons who sits up at the mall and sells them outside of his truck. To him it’s a hobby or something he does on the side, just on the weekends does he get charged for doing that? No, he’s adding value to people by giving them cheap watermelons from his farm if we go around just charging everybody trying to do something they enjoy or make a few bucks I mean where does it end? I agree though if your making the money off of your Blog you can pay something. But I would even say that tons of Bloggers have affiliate ads and other advertisements but are making very little money off of their efforts.


  • Matt Heisler on said:

    I agree with Tom. Taxes/Fees for a business make sense when there’s town responsibilities, such as a Restaurant license (town has to provide safety) or such. Income is taxed already. Blogs, are inherently, “MEDIA” and become a first amendment issue. And there are no “local services” impacted by a blog. I can’t see where a town needs to get involved at all.


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