Last night I attended the “Bloggergate” Happy Hour where city officials tried to answer questions and provide explanations of the current city tax regulations and how they are applied to members of the creative economy and freelancers. There is an excellent writeup on the Phillyist site, so I am not going to summarize everything that was discussed.
I posed a question that seemed to be on the minds of many of the local bloggers I know –
The current Philadelphia revenue regulations require that anyone conducting business and receiving revenue in the city of Philadelphia is required to have a Business Privilege License. An issue that arose among the blogger community is not the requirement to have the license and pay taxes on actual income. The issue is the “recreational” blogger who does not blog for income. They may place an ad on their site and charge just enough to cover hosting and domain renewal costs. They are now being told because they receive revenue (the payment for ad placement) that they are a business and are required to have the Business Privilege License and pay taxes. Obviously because it is a break-even financial arrangement, they will not owe any taxes, however, they are now being required to buy the Business Privilege License which likely amounts to much more than the amount they are charging for their blog ads. Is this issue being looked into?
The city indicated that, because of situations exactly like this one, they are looking into the relevancy and applicability of the Business Privilege License. They made no promises that change would come, but they are considering options. They genuinely seemed to have had their eyes opened to some of the differences in conducting business in this new creative economy. That the old ways of regulation and collecting taxes have to be re-evaluated to better apply to how a large majority now do business. It is a start.
Several other freelancers and business owners asked questions and expressed their frustration with the current tax system and the complexity of starting a business in Philadelphia. To the city officials credit, they listened and did their best to explain the current system. The city gets props for showing up on “our” (the tech community’s) turf, National Mechanics (as opposed to say a stuffy room in City Hall), for listening to the questions and complaints and for, at least appearing to, trying to understand the issues and questions. No one got the answers they wanted last night, but anyone who came expecting instant results was being unrealistic. As I said to KYW’s Robin Culverwell,
“The fact that they called this meeting tonight, they’re willing to come out, they’re willing to take questions of any kind is a positive step forward.”