I'm not certain. but I suspect that the city notification workflow is more like this: 



Blogger uses built-in mechanisms of blog hosting service to add ads, figuring "Sure, why not?" without knowing or bothering to research the tax repercussions of doing so. They perhaps assume (not unreasonably) that the taxes (or fees, in this case) couldn't possibly exceed their earnings.

Google or other ad network dutifully sends 1099-MISC to said blogger as part of their automated procedure.

Blogger follows directions or asks paid tax preparer to handle filling out returns. Software spits out Philly tax returns based on filing address (School Income Tax or BPT); blogger signs and send them in as instructed.

City processes return, realizes BPT has been paid in absence of a BPL, and notifies blogger that BPL must be obtained.



In short, I doubt that there is information sharing between the IRS and Philly revenue; rather, information submitted directly to the Revenue department is what turns up the lack of a Biz Privilege License.



Just to add to the clarification - this happens all the time, to people doing all kinds of work on the side, who happen to live in the city. Get a 1099, try to do the right thing, and end up finding out you have to pay this licensing fee, after the fact.

Nutball conspiracy website? You guys have just shown your true colors. Why dont you do some real reporting and actually look into the facts that infowars and others put forward? In case you didnt know that is wahat journalism is.

Nutball conspiracy website? You guys have just shown your true colors. Why dont you do some real reporting and actually look into the facts that infowars and others put forward? In case you didnt know that is what journalism is.

Why would you say infowars.com is a nutball conspiracy site? Their credibility is held up time and time again. Is this just because they discuss topics that are taboo to places like citypaper.net?

"Freaking nutball conspiracy site" was actually being kind! Yeesh! Hey Infowars people - there's this new thing out called facts!  Google it!

In reply to @ThomasT--

I don't think you're correct about this. My partner does not have a blog, but he does have a small amount of self-employed income from book royalties. It's never been more than $500 per year, but he reports this income (less any money spent on legitimate business expenses like buying books related to his research, etc) on his IRS form 1040, Schedule C. (He also has a day job where he pays city wage taxes.)



This year during the Philadelphia tax amnesty he got a letter from the city's revenue department telling him he needed a business license. He bought the license, and participated in the Tax Amnesty program to catch up on 9 years of back taxes, all on income of only a few hundred a year.



So I think it's obvious that they are getting some info from the IRS, or perhaps the PA Department of Revenue, where my partner also reports his self-employed income.



I think a big problem with Philly's BPT/NPT system is that many people don't know about it. I had freelance income for years after I moved to Philly before I found out I was supposed to be paying the BPT/NPT. I came clean, paid my interest and penalties, and I've been caught up every since. But I would have been paying the tax all along if I had known about it. I'm hoping that the tax amnesty program earlier this year and also this City Paper article will make the BPT/NPT more well-known.



I also hope city council does seriously consider setting a minimum amount of income below which you don't have to pay BPT/NPT. It is ridiculous for a blogger making $11 per year, or a writer like my partner making a few hundred, to have to buy a spendy license and file yet another tax return every year.



Congrats on a great article, Valerie Rubinsky and City Paper.



Virginia C. McGuire

Philadelphia-based freelance writer

[...] 167 articles.  There was one minor thing that was left out of the initial article and posted in a follow up today.  How were these bloggers identified?  The City “sent letters to people who reported their [...] 

So why would anyone live in Philadelphia? Is there a 10,000% tax to get out? You need to fire the people who even suggested this this tax on freedom of speech. Since when did the cradle of freedom become a Fascist hellhole? May be time to revive tar and feathers....

@Blue I would argue it is because of a focus on the facts that infowars.com credibility is held up time and time again. I am not sure where you get your so called "facts" about inforwars.com from, but you are obviously just regurgitating misinformation.

[...] later article had a few clarifications, but the story is still rather [...] 

As I understand it, you apply for a business license in the place you conduct the business, not where you live. How does Philadelphia plan on following up on that? When I started my consulting business I was careful to place my address in a location that wasn't in a major borough, city or otherwise to ensure that I didn't conduct transactions (the actual exchange of funds) where I'd get taxed out the a**. 



Just because someone lives in Philly and submits income that came from a blog, freelancing or consulting doesn't mean the transaction happened in Philadelphia or that the "business" operates there, ergo, Philadelphia's wide net might end up grabbing up some lawsuits at the same time, if they actually engaged in this.

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] commenters on the CP site have called this an attack on speech, but as Jeff Billman explains, it’s not, really — the city isn’t taxing the bloggers for blogging, but for [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

I prepare  city business tax returns.The City Revenue department is very aggressive about collecting the $300.00 from all city residents. I have had taxpayers tell me on numerous occasions that they could not get the license for $50.00 but had to pay the $300.00 That's the truth. What the city told you is spin. If you dig down deep on this you will out the truth. This license is too severe, especially on small amounts of income. The city deserves the bad viral publicity it is getting.

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] Philly's 'blogger fee' goes viral (also, some clarifications … [...] 

[...] the latter of which both Technically Philly and NEast Philly acquired as we brought on revenue. Philadelphia CityPaper reported that the city had begun reaching directly out to bloggers demanding they pay up, a reality first noted on web forum Philly Speaks and, admittedly, ignored by [...] 

[...] Philly’s ‘blogger fee’ goes viral (also, some clarifications) :: The Clog :: Blog ... [...] 

So why don't you have a link to this correction from the original article?  People are still posting there without any knowledge of this disclosure.



http://citypaper.net/articles/2010/08/19/blogging-business-privilege-tax-philadelphia

[...] thing: There is no blogger tax. Never was. This was an Internet meme that got carried away and blown the hell out of proportion [...] 

How is it possible that Philly lawmakers are unfamiliar with the constitutional concept that forbids Taxation Without Representation? In Philly of all cities. If Philly lawmakers can put together a cogent op-ed piece on how they are representing the bloggers with this tax money, I'll read it with an open mind. Until then their knowledge of constitutional law is disgraceful. As it is with most politicians, sadly.