Last week, Mashable reported that the city of Philadelphia has a tax code on activities that are done for profit — and that extends to bloggers.
“The city of Philadelphia’s Business Tax Privilege requires residents to pay a privilege license for a one-time fee of $300, or $50 annually, in addition to a percentage of gross receipts and/or taxable net income, depending on the nature of the business.
The problem is that this license technically applies to any person conducting business activity in Philadelphia, regardless of that activity’s profit or loss margins. That means that Joe Blogger who makes $12 per year from AdSense ads on his blog is theoretically required to pay 6.45% in taxes on that income, in addition to the cost of the license.” [Philadelphia Tax Code Sparks Big Controversy for Small Bloggers]
The law doesn’t single out bloggers, but some bloggers have been getting notices requesting payment for the license.
What would you do if you received such a notice? You could stop running ads. Many bloggers in the healthy living community don’t have them…but many do (hello, the ubiquitous Foodbuzz banner). So you could pay the fee…which is considerably higher than many people make off of their ads, affiliate programs, etc. We’ve talked about investing in your blog, and I suppose in this case, you’d have to decide whether the possible income over the life of your blog was worth the $300 investment.
Do you think it’s fair to ask that when people are making money off of a blog they pay taxes on it? I’m curious to hear what you bloggers think!
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{ 3 comments… read them below or add one }
Well I guess it’s fair to pay taxes if you’re making a profit, and if you are making that little I’m assuming you’d get it back. But the one-time fee thing totally sucks.
Well, income taxes yes, for sure. I think the “hobby tax” limit is $300, so if one makes more than that off their blog they would be required by the tax code to pay income taxes. As far as requiring a “permit” – I’m undecided. A lot of municipalities require you to have a permit to operate a business out of your house, and I see this kind of as the same thing, no? I guess it would just depend on if the blog was really a “business.”
If my blog was actually making money, I might be cool with paying. As it is, I haven’t seen more than $1/ month from Foodbuzz (traffic isn’t what I’d hoped), so paying $300 seems a little silly…that’s on top of paying for my domain and hosting, of course.
Somehow I doubt the law is going to stand, but we’ll see.
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