If you haven’t heard already, Philadelphia is now requiring bloggers to pay a $300 “business privilege license”, regardless of whether or not their blogs actually make any money.  It's essentially forcing folks to register websites that have any ads on them, as a business.  The story, which originated last week in the City Paper, has now shown up on NBCPhiladelphia.com and national sites like Mashable.

The fee, which applies to any for profit activities in the city, requires anyone who has a blog with the potential to earn revenue, to pay a one-time $300 tax to the city (or $50 a year)- on top of any earnings taxes they would normally pay.   The problem is that this includes small hobby blogs, that are closer to Facebook pages than they are businesses.  Sites like ours (which, by the way, isn’t affected because we are registered outside the city limits), that do generate ad revenue, are ideal candidates for this type of tax, whether or not you agree with those sorts of business fees.  The city, however, is generalizing a very broad industry by lumping in "blogs."  Blogs range from someone’s personal site that rants on daily thoughts, all the way up to sites like ours that sell ad space and to large media conglomerates like Deadspin.  A flat $300 fee is hardly fair.  It is a misguided attempt by an archaic city government to generalize a very broad industry, with a tax that shows a fundamental misunderstanding of what blogs are.

I would guess that 95% of “blogs” are likely personal sites, that are run as nothing more than a hobby.  Unfortunately, most of those sites are hosted by services like Blogger and Typepad, which provide space for advertising.  Some people may take the eight seconds to place Google ad code on their site, to generate a few pennies for their efforts.  But most of these bloggers won’t spend $10 to register their own domain name, so why now would they risk a $300 bill, for a site that no one may ever read?

Of course, since it’s unlikely that the city is actually taking the time to comb the net, there is a simple way to avoid this tax: don’t report any earnings from blogs, even small ones.  While sites that make $0 may still be eligible for this fee, the city is probably just going to take the low hanging fruit and go after sites who’s earning are actually reported.

That means the real victims in all of this are creativity and honesty.

The people mentioned in the City Paper only got hit with the fee because they reported their earnings- less than a hundred dollars worth.  My guess is that a whole lot of people will neglect to report their miniscule earnings next year at tax time- or not start their sites at all.  The tax will stop folks like Barb Ward, who just want to have an outlet for their thoughts on sports, or whatever else strikes their fancy.  What is going to compel someone like her to start a similar Phillies blog, if at the end of the year, the city will come sucking at their teet?

All this goes to show is that Philadelphia is run by a government, made up of old folks, that is completely out of touch with half of its population.  Sites that could one day turn into something, may never see the light of day, all because the risk far outweighs the small chance of success.

And that means we all lose.