The city of Philadelphia has been making headlines lately by forcing bloggers to pay a $300 business privilege tax. As you can imagine, many area bloggers are not happy about this new change. It seems that the bloggers, whether they make money from their blog or not, will be required to pay the fee in order to keep their sites running.
According to local media reports, the city's business privilege tax doesn't just apply to bloggers, but to anyone who makes money from their hobby. This would include people who sell crafts on Etsy, freelance writers and anyone else who is trying to turn a hobby into a money making venture. The truth of the matter is that many bloggers don't turn a profit at all, and in fact, most of them lose a little money. For example, a person who decides to start a blog on Philly night life would have to pay for their domain and web hosting each year (which can cost between $20-$50 a year), they have to then go out and pay to enjoy some of the wonderful nightlife that they write about. Many bloggers use Google's AdSense to place ads on their page and they get paid a portion of the ad generated revenue. In order to get paid, you have to make at least $100, and most bloggers only make about $10-$50 a year, so for them, the tax is an excessive burden. Running a website or blog, is very similar to running any other sort of business. The business owner is responsible for reporting their revenue and for paying any federal or state taxes the owe on the money. This tax is on top of the typical revenue tax.
In fact, there are bloggers who consider this tax is a threat to their right to free speech. According to the State of the Blogosphere survey at Technorati, 72% of respondents stated that they blog as a hobby and do not generate any sort of revenue from their sites. Those 72% will be effectively silenced unless they can pay the $300 tax. Additionally, those who have been considering creating a blog will most likely decide that it isn't worth the expense.
And while there are blogs that generate a great deal of revenue, those bloggers do pay taxes on their income and they all started out as tiny blogs that didn't make much money at all. Supporters of the tax say that while it can be a burden for some, the easy way to avoid the tax is to stop running ads on the site. This is true, but for most bloggers, the goal is to increase their site's popularity in order to increase the ad views and eventually make a little bit of money from their site. This is the carrot that keeps them working at it even when it feels like no one is reading.
It is amazing to see this in the city that was created by people who wanted to be free from the burden of excessive taxes. My fear is that other cities, who are looking down the barrel of bankruptcy, will look to Philadelphia as an example. Before you know it, no one will be allowed to publish their thoughts on their own websites that are hosted on servers that they pay for.
Read more:
http://www.howtospoter.com/money-making/blog-income/blogging-taxes-are-here
http://citypaper.net/articles/2010/08/19/blogging-business-privilege-tax-philadelphia
http://mashable.com/2010/08/23/philadelphia-blogger-business-tax/
By Melissa Kennedy- Melissa is a freelance writer and regular contributor to several websites and other publications, a volunteer, a full time mom and an active job seeker.
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