For most bloggers, posting is a labor of love, not for profit; however, Philadelphia’s government saw the city’s hobbyists as their own moneymaking venture when it chose to slap bloggers with a $300 “Business Privilege Tax.”
This year, the city’s bloggers dutifully reported meager earnings from ads to the IRS and promptly received letters from the City Revenue Department notifying them of the fee, but it didn’t stop there; if you’re a blogger who posts ads, you must automatically pay for the $300 business license, but any earned revenue invites an additional 6.45% tax on that income.
Often the cost of this license vastly exceeds blog revenue. Philadelphia’s City Paper highlighted the case of Marilyn Bess, who has made $50 over the past few years on her blog. When she tried to explain this to the city, she was told to hire an accountant.
Bloggers are rightfully arguing that the license discourages free speech and dissent as some opt out of the fee through foregoing blogging altogether. In addition to inhibiting the creative expression of Philadelphians, the city government is stealing even more money from its constituents in a time when money is scarce.
Though the fee applies to only Philly residents, it makes us question the state’s policy as a whole concerning Internet taxes. Pennsylvania has so far steered clear of the affiliate nexus tax, which requires online retailers to collect tax on consumers if a company advertises on an in-state website. However, according to the Bureau of National Affairs, it seems that they may be taking a more crafty approach to eTax enactment than their more vocal counterparts.
The BNA website states that, among other states, Pennsylvania “may believe that the ’Amazon-law‘ approach fits within their sales tax nexus policy—without the need for enacting legislation.”
So as Philly is taxing its creative minds through the Business Privilege Tax, it seems that the state may be trying to sneak in an etax under the nose of its constituents without legislation.