Philadelphia’s Blogger Tax: An Update

A couple of months ago the blogosphere lit up with angry alarm when the city of Philadelphia sent out a handful of notices to local bloggers demanding that they pony up $300 for a business privilege tax in order to keep blogging regardless of how much – or how little – they earned.

Federal law requires the reporting of all income, no matter how small, and bloggers dutifully did so causing the Philadelphia Revenue Department to automatically issue letters to bloggers demanding they pay for the $300 one-time business privilege license. The bloggers were shocked to realize they were required to pay the hefty fee even when they’d earn microscopic sums from ad networks.

They shouldn’t have been surprised. The Philadelphia Revenue Department is known for its ruthless pursuit of tax evaders, and has many checks and balances in place to catch even the smallest scoff law – and that includes those that blog for a hobby.

While I no longer live in the Philadelphia city limits, I did work as a freelance writer while living in the city, and yes, I had to pay the $300 business privilege tax, as did my husband (also a freelancer). We also had to pay a wage tax and a net profits tax. This issue was one of the major factors that drove our move to the suburbs. There is no doubt that Philly suffers a brain drain because they charge so much for the “privilege” of doing business within the city.

After the initial uproar about the “Philly Blogger Tax” the Mayor’s press office held a small cocktail party with bloggers to address the issue. I spoke to Katie Martin in the press office and she said:

“We were never targeting bloggers. The IRS provided us with information regarding deductions taken by the bloggers, so the letters were sent out. Now we are offering on-going education efforts to bloggers so they better understand the law.”

Philadelphia City Council members Bill Green and Maria Quiñones-Sánchez introduced legislation on November 4th that would eliminate the Business Privilege Tax for those businesses that earn less that $100,000, which would include most blogs. This legislation is part of an attempt to do a larger overhaul of the city’s tax code.

The Business Privilege Tax has been on the books since 2002 when state law allowed the city to impose the tax. With any luck, Mr. Green and Ms. Quiñones-Sánchez will be able to push through this legislation and better encourage tech savvy companies and bloggers to do business in Philadelphia.

Bloggers still need to take the time to understand that when they slap ads up on their site, they are doing more than just earning a few dollars of pocket change – they are stepping out of a hobby and into a revenue-generating business. With any luck, the furor created by the bloggers may actually lead to real change in the city’s tax law – which benefits ALL business, not just those of us that hang out on the internet.

About Cecily Kellogg

Cecily Kellogg has worked in marketing and public relations in some capacity for fifteen years, and now focuses primarily on digital marketing. Cecily has been writing since she could hold a pencil and now creates web content for a wide variety of sites. Cecily is also know for her irreverent wit on twitter as @CecilyK, and her personal blog UppercaseWoman.com, but she can also be found at CecilyKellogg.com and CecilyK.com. Because you can’t have too many blogs.

11 Responses to Philadelphia’s Blogger Tax: An Update

  1. hchybinski says:

    nicely put – how "nice" of the city government to spend budget on a cocktail party to "educate" the bloggers. . .wonder how many city officials owe taxes (or parking tickets). . .would love to see the business privilege tax get some common sense – if the city says it wants to encourage businesses to move there, operate there and thrive there – then they should put their money where their mouth is and make it happen.

    Hillary

  2. Mike says:

    What if the only time you blog is at your Starbucks office located in Montgomery County but you live in the city. Do you still have to pay the tax?

  3. The Domestic Goddess says:

    Makes me glad i make no money at this…no business privilege tax here, but still! Insane!

  4. @djambazov says:

    I think the key is the "correction" that Bill Green and Maria Quiñones-Sánchez are trying to get passed which limits the so-called Privilege Tax to business who make less than $100k a year. That will help keep such a tax from stifling growing businesses.

  5. Adam Viener says:

    You should form a Philly blogger Co-Op and all operate as one "business" and share the $300 tax.

  6. @rungirl1 says:

    I like Adam's idea!__Where can I read more about the city and their 'charges'?

  7. Melinda Romero says:

    Way to have someone who has NOT LIVED in Philadelphia for OVER A DECADE write about something that does not effect her or her husband at all. (did you even check her background? I did, and it was quite easy to determine this) You know what would have been nice? Reading a perspective from someone who actually DOES live in Philadelphia and who actually deals with this issue – instead of this rehashed frap that reads like an armchair aggregation of other people's opinions and articles. I am sure plenty of Philly bloggers want to read about their problems from the perspective of a privileged suburbanite who is unaffected. What next, articles on parenting tips from single childless people? Way to go!

    • Sheri says:

      Hey Melinda,
      Dial it down. If you get this upset about an article written by someone who don't know, I'd hate to be around when something really terrible happens in your life.

    • Cecily says:

      Actually, Melinda, I didn’t leave Philly until 2005, three years after the tax was initiated, and I did indeed have to pay it, as did my husband. We live just barely outside the city now, and I’m on the Board of the Social Media Club of Philadelphia and know plenty of local bloggers that struggled with this issue.

      I’m sorry you don’t feel I’m qualified to write about this. Also? The idea that I’m a privilege suburbanite is going to keep me up all night laughing hysterically. If you only knew!

      Thanks for your comment.

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