According to the Mashable web site, last week, the Philadelphia City Paper published an article discussing the potential impact of the city’s Business Privilege Tax on residents that engage in “activity for profit” — activity that includes blogging, provided a user’s blog runs advertisements or makes money in other ways.
The city of Philadelphia’s Business Tax Privilege requires residents to pay a privilege license for a one-time fee of $300, or $50 annually, in addition to a percentage of gross receipts and/or taxable net income, depending on the nature of the business.
The problem is that this license technically applies to any person conducting business activity in Philadelphia, regardless of that activity’s profit or loss margins. That means that Joe Blogger who makes $12 per year from AdSense ads on his blog is theoretically required to pay 6.45% in taxes on that income, in addition to the cost of the license.
Photo by samlevan.