Have you all heard about the uproar in Philadelphia about the blogging bussiness tax? While this doesn't affect the Mistress, she is just outside city limits and I don't advertise on my blog, I would love to hear what you think. This is from the Washington Examiner.
Bloggers in Philadelphia are upset over a city business fee that they say is an unfair tax on their Internet musings. The city's so-called business privilege license costs $50 a year or $300 for a lifetime. If a blog takes money for advertising, or sells photographs or other goods, it's a business and must pay for a license — no matter how little it makes — plus taxes on profits. A spokesman for Mayor Michael Nutter says the license is nothing new and is required for any moneymaking enterprise, from large corporations to neighborhood pizza joints and all other kinds of mom-and-pop businesses. But the idea of the city mandating a license for people who blog in their spare time and garner some income, no matter how minuscule, rankled the blogosphere, though it was clear there is a distinction that some bloggers are pros, while others are just hobbyists.
The uproar began after the city Revenue Department recently sent out letters to Philadelphia residents who reported business revenue with the Internal Revenue Service but hadn't gotten a city business license. Some bloggers are complaining that the fee would impinge on their free speech and would discourage dissent. They also say it's unfair to require a business to pay taxes if it's making only $25-$50 a year. What do yuo think about this?
This is interesting to me. For a couple years (before several kid related craziness-es turned my life upside down) I earned four figures a year doing freelance writing. I declared everything on our taxes and didn't take any deductions for supplies or office space in our home.
ReplyDeleteSo when I read that I thought about all the writers who work out of their homes? Before blogger-dom we would just toss stuff into the great bin of freelancery, beg at the hem of agents or launch stuff over publisher's transoms.
Now I see all these blogs into books. I've even put one of my own manuscripts up in a blog - one that I even had a publisher for but then there was all that world upendingness.
I think it is all political skullduggery and I say to Hell with it.
xoxo
break for ad - unpaid so don't go after The Mistress
http://blackberrypond.blogspot.com/
This seems wrong for blogs and small "businesses" that don't make much money. Sort of like taxing a lemonade stand that kids have.
ReplyDeleteI swear, government wants their cut of every God damn thing! And Joy is right. I'm suprised they haven't yet taxed kids lemonade stands yet!
ReplyDeleteI've always taken the City Paper with a bucket of salt, and it looks like my skepticism is justified. The few that have actually been contacted were apparently people that listed something on their Federal taxes and then neglected to put it on the Philly taxes. The actual letter never said anything about web revenue. And btw- welcome back!
ReplyDelete"Of the two bloggers quoted in the City Paper, one had received nothing from the city. The other got a form letter the city sends to federal tax filers who may not have reported income to the city. It never mentioned blogging."
If this is a hobby, you do not get tax breaks, you can only deduct an amount less than, or equal to your revenue from hobby. So, maybe this lady overstated her income, I wonder if she deducted any of her expenses. I think the whole thing sounds like a pain in the ass. How do they even go about collecting the damn thing?
ReplyDeleteIf this is a business and not a hobby, do you get the tax breaks associated? Write off for the use of the computer, rental of your home office space, a portion of electricity, office furniture, and most importantly- write off for a small business losing money. Just wondering.
ReplyDeleteI'm hearing about this up here too. The outrage is misplaced. A blogger has full control over whether to run ads or other money-making schemes in connection with the blog. If the blogger decides to run ads, then the blogger is using the blog like newspapers use their articles--as a money-making business. Businesses are appropriately licensed so that the local government can apply whatever regulations apply to each business in an industry, rather than the unlicensed business flying under the table in unfair competition with its competitors.
ReplyDeleteBlogging itself is protected by the First Amendment, but businesses are always subject to complying with the laws that are set up to regulate the way commerce works. Commerce without that kind of a stable, workable legal system generally fails miserably because brute force is used, abuses occur, and customers can't use the markets fairly. Most of the libertarian comments I saw in one article display an abject ignorance of the way markets developed and the way they really work because they are based on ideology and not on practical understanding of human affairs.
Well, this is not that difficult. if you are a blogger who is a hobbyist and makes no money in advertising or subscriptions or whatever, you are not a business. If you generate revenue, then you are a business. Deal with your accountant if this is the case but you are providing a service and generating revenue based on that service.
ReplyDeleteI don't have a blog, but NOT A CHANCE I'd pay –Internet users already pay taxes via their provider. This would be double dipping wouldn’t it? I say no way!
ReplyDeleteWell, let's see. Someone earned around $11 over two years. The fee for the license is $300. It'll take about 27 years for the dude who earned the money to overcome the price he paid for license. ($300/11=27.272) Philadelphia is charging $300 taxation for $11 income over two years. (obviously, no one would pay $50 per year) So the license fee is fixed price, huh? I personally would call these earnings as "donations" rather than "incomes."
ReplyDeleteWhile I don't have a blog, I can't say much. But if I had one that I did make money on I would gladly pay the tax, as my duty, but good God, can we do anything anymore without a freakin tax on it!!!!
ReplyDeleteUnfortunately it isn't just Philadelphia. Lots of small cities have been trying to collect business license fees from hobbyists for some time now. There was a story last year about a lot of youth sports umpires ($50 honorarium per game) who received business tax bills from the city of San Diego because they followed the law and claimed the 'income' in a schedule C. The real problem with this form of taxation is that business licensing was originally designed to offset real costs of supporting the business, which is why you see fees for bars, car dealerships and other businesses so high: they actually have an impact on city services.
ReplyDeleteClearly a blogger doesn't have a $300 yearly impact on city services beyond what they might have simply by living in the community (and supporting it with property and sales taxes).
I wonder if I could write off some new snowboard equipment if I were able to stick some ads on the back of my jacket and snowboard. LOL!
ReplyDeleteWell, it's about time you returned!!! I heard about this. Now excuse me cause I'm full of piss and vingear today, but this tax is nothing less than absurd. To require bloggers (and I'm sure vloggers aka YouTube Partners) to obtain a business license is going a bit far. Does the city also require such licenses from every individual who sells items on Craig's List or hosts a yard sale? In full disclosure, I make money off of my YouTube videos and report the income when filing taxes, but it is anything but a business.
ReplyDeleteIt doesn't seem very fair to me, but only because I don't get how someone who makes 50 cents can be taxed $300. Shouldn't it be a percentage of income? So if you made 50 cents in ad revenue, you report that on your taxes and it gets added to your AGI and that's that. Right? The solution does seem simple - take down AdSense from your blog. If you're making so little money as to make this all rather silly, is it worth the hassle? When you're a big blog celebrity you can put it back and make enough money to get taxed more comfortably.
ReplyDeleteWell,wel,well (as I clutch my pearls) who the hell stirred the hornets nest up in here?
ReplyDeleteIt will be interesting to see how this turns out.
ReplyDeleteOh dear! I guess there were to be a lot of opinions! And while I don't have ads to make money, the Mistress always enjoys some nice big estate jewerly from Tiffany's of Cartier!!!! You know ,as payment!
ReplyDeleteI guess it's fair to tax business income, but how can a city charge for a business license on a business that's located on the Internet. The Internet has no actual physical location and nobody owns it.
ReplyDeleteI hope they don't start taxing my farts. I would go broke.