"Bloggergate" Happy Hour Answers Questions

A crowd of freelancers and bloggers listen to city officials (All Images Credit: Joey Lombardi)

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National Mechanics was packed last night with bloggers, freelancers, business owners, and artists hoping to get a better understanding of city's business license methodology. The happy hour started tensely, as a freelance writer fired off a rapid series of questions related to extra taxes on freelancers writers living and working in the city. The officials did their best to answer her questions and keep a positive mood, but they did confirm that she would pay higher taxes, due to "Net Profits Tax." One city official suggested that the writer seek full-time employment, in which the freelancer shouted that the papers won't hire full-time writers anymore.

The next series of questions came from a business owner who was frustrated with the confusing tax and business laws in the city. The organizers recorded his comments on a white board and set expectations with the crowd that their hope is to improve the information available to make the process easier and less frustrating (essentially so people would pay their taxes).

The official "Q&A" ended with questions about small time blogging. One blogger said the revenue she made from her blog paid for her hosting fees. Officials said that from a tax perspective, it's a wash, but she would still need a business license. The hesitation in the speakers' voices became apparent at this point; the city is looking into alternatives for "small-time bloggers," but today the business license is required. When another blogger asked if those who paid would get refunds if the rulings were changed, the answer was, "No."

Some of the good points:

• City officials were very friendly and worked hard to keep the tone of the evening pleasant.
• The officials took lots of notes, recordings, and made a point to walk around the bar after the question session to get more feedback, information, and questions.
• The $300 lifetime license is transferable (assuming you start a new blog or a new business under your name).
• Spouses can share one license if they are working on the same project/business.
• They seemed to understand that bloggers breaking even (due to hosting fees) or making little money have a legitimate axe to grind and the officials raising those questions internally.

The bad points:

• Even though the officials listened and sympathized that the license might be prohibitive for some people, it is still active (even for bloggers/freelancers/artist making little money).
• Business owners have to register and pay for multiple business licenses if they have multiple corporations or multiple businesses.
• Freelancer writers who are already having a tough time finding work are getting hit harder on taxes if they work and live in the city (a major topic with many of the freelancers in the room).
• If an individual is identified to register for a business license and does not, that individual could be fined up to $5,000.

As the news of President Obama's push for small business tax breaks dominates the news, it is hard not to question the city's approach with small business owners and bloggers. The financially strapped city should collect taxes on established businesses and homes, but the amount of revenue the city will make from this marginal group (with the city's limited resources) is questionable. While it is commendable to see the city try to find innovative ways to keep the lights on, this path could lead to an administrative nightmare for small businesses if left unchecked.

If you are a business owner, freelance writer, or blogger and have more questions you can find more information on the Philadelphia Business website or call 215-686-6600.