The following is a report done in partnership with Temple University’s Philadelphia Neighborhoods Program, the capstone class for the Temple Journalism Department.
Mike Lyons and his wife run West Philly Local, a blog that covers news in West Philadelphia.
His site has been up for just three months and gets a modest 800 to 900 unique visitors a day. Although Lyons hopes to monetize the site in the future, it has yet to make any profit.
For bloggers like Lyons, the year-long dispute concerning the city’s so-called ‘blogger tax’ has caused a great deal of confusion.
But new legislation introduced by Councilman Bill Green could keep Lyons and other hobbyists, including bloggers, from being required to apply and pay for a city business privilege license.
In case you missed it, the controversy began last summer when a round of letters from the City of Philadelphia began to ask bloggers (who disclosed on federal tax returns income from blogs) that they apply for the city’s $50 one-year or $300 lifetime business privilege license. These letters were sent to some who made far less money from their blog than the cost of the license itself, many of them characterized their websites as hobby, like Lyons does for now.
“This is an old city with some old ways of doing things, and they’re running right into an economy they’re not used to dealing with and they’re trying to apply old laws to these new things,” said Lyons of the so called ‘blogger tax.’
However calling it a tax is rather misleading.
Watch Green and others discuss the legislation in this video:
“There isn’t a ‘blogger tax’ currently. There is a business privilege tax and a related requirement to get the privilege license. This applies to all business activity conducted in the city,” said Sophie Bryan, Councilman Green’s chief of staff. “The stigma of ‘blogger tax’ is therefore also a misrepresentation because it does not just affect blogs but all activities that could be classified as hobbies.”
Councilman Green has proposed bill 100754, which came out the finance committee last month, that he says would end this confusion and put a stop to the so-called ‘blogger tax.’
The bill would create a legal distinction for a hobby that nets less than $3,000 annually, making it exempt from the business privilege license.
Bloggers and hobbyists who would claim that small an amount of revenue could complete a form for certification by the Revenue Department, which would have the burden to prove otherwise.
“We just wanted to have a clear, simple and easy process for hobbyists and anybody in the creative community to have a simple form they can fill out that says ‘This is a hobby. It’s not a business. I’m not going to claim a federal deduction and therefore don’t have to get a business privilege license,” Green said.
Councilman Green also said he wants the city’s desire to retain and support its creative community to be as plain as the legislation.
“We want [creative people] here and we want to say Philadelphia is open for business and make that really clear,” Green said.
This message is not lost on the blogging community.
“I think it’s very important, “said Kishwer Vikaas of the legislation. Vikaas, a law student at Temple, runs the Philadelphia blog phillygrrl.com which focuses on the city’s South Asian population. Vikaas describes her activities with the blog as purely recreational.
“If I started to blog and found out there was some way I could be penalized for it I would hesitate or go a different route,” said Vikaas.
The legislation goes along with a continued push to reform the city’s business tax codes which Green says are ‘excessively burdensome.’
The bill has received the support of the Revenue Department and could be voted on as early as today.