Wednesday, August 25, 2010

Philadelphia charges "commercial" bloggers a business license fee; similar problems have occurred in other jurisdictions

On p A14, the Washington Post has a “Faster Forward” story today by Bob Pegaroro, “Philly’s blogger fee turns into blog fodder”, about a measure recently passed in Philadelphia (“The City of Brothery Love” and site of the COPA trial, was as host of the Phillies) to require bloggers who accept advertising to pay a one-tome $300 business license fee, or $50 a year. The Post link is here (this post rolls to new content) and refers to a story by Valerie Rubinsky in the Philadelphia City Paper, link here , Aug 18, 2010, title “(Death and Taxes): Pay Up: Got a blog that makes no money? The city wants $300, thank you very much”

Any blogger hosting a blog that posts even one ad and has any potential to make money would have the potential for exposure to the tax. The City sounds very belligerent in defending it.

Bloggers or webmasters who do not post ads would seem to be exempt. It’s not clear what happens with a site that has a potential to commercial sale, for example, to make a commercial film (maybe in the spirit of the upcoming “The Social Network”). Incidental “blogging” on Twitter, Myspace or Facebook probably doesn’t trigger the tax unless the social networking host comes up with a scheme to share revenue with the blogger (I think Twitter has a way to do this, according to Tory Johnson). I suppose any local tax wouldn’t be a problem with obviously “successful” blog financially, like Heather Armstrong’s “mommy blog” Dooce, or commercial operations like Huffington Post or Andrew Sullivan’s Daily Dish.

There have been scattered reports of problems like this in other jurisdictions. Washington DC threatened such a tax a few years ago, but only for other businesses that require other kinds of oversight.

In Arlington Virginia, at the end of 2007, the County decided to increase property taxes on property with commercial use. Some people feared that telecommuting or blogging with ads from home could cause a property tax rate to raise, but it did not. I covered this on my “Issues” blog on Nov. 28, 2007 and other linked postings. (I went to a County Board meeting just to make sure this didn’t happen, and monitored the videos of the testimony, which the County was very good about putting online.)

But it gets worse. In Chicago, Los Angeles, and some townships in New Jersey, some people have been fined in the past for writing at home without a commercial license, although a friend of mine in LA tells me that is no longer a problem there. (The New Jersey case involved a rabbi and was reported on John Stossel’s “Give me a break!) These reports surfaced when I was living in Minneapolis, and a check of local laws there found no problems, although my friends in the Libertarian Party of Minnesota there winced at the news stories.

In Virginia, many jurisdictions have personal property taxes, which technically include home computers if they are used for any trade activity; I pay these and don’t argue, but only because the actual tax is very low (I think there is a question of principle, however, and a potential for local government intrusion). In Arlington, one would have to pay a tax on blogging profits, but only after going over $10000 a year. (Technically, one is supposed to have a free business license and file an income statement in March every year, even if the income is very small.)

I think we need John Stossel’s “Give Me a Break” back on the air.

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