Are you regulation-savvy? If not, it can cost you.
Published: September 28, 2010
A blogger in Philadelphia recently became part of an international debate she didn’t seek. City Paper, the area’s most widely read weekly, publicized the story of Marilyn Bess and her blog MS Philly Organic. Bess viewed her blog as a hobby, but the city didn’t. She received a letter directing her to purchase a business privilege license at $50 a year or $300 for a lifetime. The whole thing seemed ludicrous to the blogger who told the paper she’d made about $50 over a three-year period.
Kay B. Day
It is likely if the city views your blog or website as a business and you don’t pay up, the fines will be more punitive than the original fee.
The blogosphere was outraged over Bess’ experience, but in reality, Philadelphia isn’t different from most cities. Municipalities usually do charge a fee if someone engages in a business with a potential for profit.
In my city, I purchase two licenses each year. One license covers my freelance writing. The other license is an umbrella—it’s a peddler’s license and I have it in case I sell a book at an event. Because my publisher sells the books and online retailers and stores sell them, I rarely if ever sell one since the books have been in print for several years. I pay $101.25 total for the licenses.
I am more likely to sell a book during its first year of publication because normally I do author events in that time period.
Bottom line—I buy the license as a just-in-case, and that peddler’s license means I have to file a quarterly sales tax return with the state of Florida. I have paid as little as zero—I once paid $.52 on my return. If I don’t file that return even if the balance is zero, I must cough up a $50 fine.
The blogger in Philadelphia may have an advantage she doesn’t know about. If the city classifies her as a business seeking profits and requires her to purchase a license, that would make a good case for her to claim business expenses and file as a proprietorship on her federal income tax return. Based on what she told City Paper, Bess would have a whopping loss because she could take off part of the costs for office in the home (assuming she has a separate office area used only for business), and any expenses associated with operating that business. I’d recommend she chat with an accountant—she may be better off simply paying the license fee and gaining a federal advantage.
Wherever you live, it is likely your local government has a requirement in place for licensing any activity that can produce an income.
If you have ads on your blog, a donation link or have any other means of earning income from your site, you will more than likely need a license of some kind. If you sell books, reports or any sort of branding merchandise, you may also need the equivalent of my peddler’s license and you may have to file a sales tax return if your state collects such a tax.
It’s a good idea to check with your local government’s business license department to make sure you’re regulation-savvy. If you don’t, it could cost you. One writer I know had to pay $500 in fines because she didn’t know she had to charge sales tax when she sold a copy of her self-published book. Ignorance, when it comes to taxes and licenses, is not likely to inspire sympathy and it can cost you quite a bit if you don’t do your research before you earn that first dime in revenue.
Florida journalist Kay B. Day has won awards for poetry, nonfiction and fiction. The author of two books, she has written for
The Christian Science Monitor, United Press International,
The Florida Times-Union and Sky News. To learn more about Kay Day, see www.kayday.com. To read Kay's other Web Savvy columns about writing for the Web, click here.