Philadelphia Bloggers Who Make Money Ordered to Pay City Business License Fee

Through sharing agreement with the IRS, Philadelphia city government identified 32,000 people who reported business income, including bloggers, but failed to attain a business license.

by / August 24, 2010

Philadelphia city officials are adamant that they're not singling out bloggers -- just those who reported business income to the IRS, but didn't follow proper procedure with the city.

Through an "information sharing agreement" with the IRS, Philadelphia recently identified 32,000 people who earned (or lost) business income last year, but failed to inform the city of such dollars and obtain the required "business privilege license." It's unclear how many bloggers received letters from the city when they were sent out in May, as such specifics aren't required on tax forms, but city officials estimate it's a low number.

Regardless, the cash-strapped city's stepped-up enforcement and its impact on bloggers came as a shock as Philadelphia is the first known city in the U.S. to do so. As well, most bloggers don't make a living from their online writings, which is more often a hobby than a source of revenue. The Philadelphia City Paper recently cited the example of blogger Marilyn Bess, who makes about $50 a year from what she considers a hobby. With a price tag of $50 a year or $300 for a lifetime license, bloggers may end up paying more in taxes than they earn from typically meager ad sales.

But city officials say it doesn't matter how individuals earn the money -- or how much -- just the fact that they earn any makes them subject to its business license requirements.

"We are using data from the IRS and being aggressively proactive about going after any and all businesses," said Philadelphia Revenue Commissioner Keith J. Richardson. "And we want a level playing field to make sure everyone is paying their fair share. Citizens and taxpayers understand we're not going after one specific group of taxpayers or businesses."

Philadelphia officials said they're not trying to deter such online mediums -- or any small business. They just want the city to collect its fair share in fees.

"I think the city of Philadelphia ... is very friendly to freelancers and the arts industry," Richardson said. "I think we've done a good job of selling that -- and even those with blogs. We're not trying to scare [them] away; we want them to be there, but want accountability for a small business."


Karen Wilkinson

Karen is a former staff writer for Government Technology magazine.