Further Thoughts On Philadelphia’s So-Called “Blogger Tax”
Vivian Paige, a Virginia blogger who also happens to have a background in accounting and tax preparation, makes this observation about the so-called Philadelphia “blogger tax” that I wrote about yesterday:
The devil, as always, is in the details:
After dutifully reporting even the smallest profits on their tax filings this year, a number — though no one knows exactly what that number is — of Philadelphia bloggers were dispatched letters informing them that they owe $300 for a privilege license, plus taxes on any profits they made.
Let me guess: each one of these people filed a Schedule C (pdf). Probably did so to claim expenses, like their internet service, or to deduct the cost of a computer, most likely on the (bad) advice of a friend or even an accountant.
A Schedule C is entitled “Profit or Loss from Business” for a reason. From the instructions (pdf):
An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business.
So by completing Schedule C, you are acknowledging that this is not a hobby. And guess what most localities – including every one in Virginia – require? A business license.
So, what we’re dealing with here is a generally applicable law that requires all persons operating a business in the city to obtain a license and pay a fee. It’s not an effort to “go after” bloggers, and considering the fact that the people quoted in the article had already declared themselves as operating a business with the IRS, I honestly don’t see what the story is here.