To quell the furor over the “bloggers tax,” the Department of Revenue and the Mayor’s Office of Arts Culture and the Creative Economy walked into the lion’s den and sponsored a Q&A about the city’s business privilege tax last week at National Mechanics restaurant in Old City.
Moira Baylson, the city’s deputy chief cultural officer, kicked off the evening with a brief introduction and then opened up the floor to questions. David Dorman, the revenue compliance program director, and 10-15 officials from Commerce, Managing Director’s Office and the Division of Finance answered questions.
Dorman announced, “The city is reconsidering the tax.” When the crowd got excited about the prospect of not paying the tax, Dorman quickly clarified, “Everyone still has to pay the tax until it is actually repealed. The abolition of the tax is a long time way. It will take a vote of City Council to change the tax.”
Andrew Baer, a lawyer whose clients are smaller high-tech companies, asked, “How much revenue has the tax generated for the city? The tax maybe generates $1 million in revenue. The city has received many times that in bad publicity.”
Frank Breslin, deputy revenue commissioner, later confirmed that the fee was an insignificant part of the city revenues, “The business privilege license fee ($300 for a lifetime or $50 for a year) generated a little more than $3 million in revenue for fiscal year 2010 ending June 30. The total tax and fee receipts for the city for fiscal year 2010 were just under $3 billion.”
“The $3 million figure was a little higher than normal due to the city’s tax amnesty program”, reminded Andrea Mannino, special assistant to the revenue commissioner.
Gloria Bell of Red Stapler Consulting asked, “I take in $10 in ads on my blog that pay for my hosting. It is a wash income tax wise. Do I have to pay the business privilege
Dorman said, “Unfortunately, according to the city, you are generating revenue so you have to pay the tax.”
One freelancer complained that the tax also hits “the grunts of the editorial world.”
Dorman conceded, “Freelancers were in a tough position but they still receive
1099 income so they have to pay the business privilege license fee.”
Not all the crowd was hostile. Geoff DiMasi, proprietor of the website design firm P’unk Ave and the community workspace Independents Hall, proudly paid the business privilege tax three different times.
He wanted to know “when the city was going to streamline the process of opening a business in Philadelphia.” He estimated, “it cost me $5,000 in accounting fees just to set up each of my businesses.”
While no one wants to pay taxes, the crowd agreed that a $50 lifetime tax would be more reasonable. Vidas sounded promising, “One of Nutter’s main issues is tax reform, so he is thinking about this tax.”
Due to those hard times, the city did not pick up the tab for the cocktail hour. It was BYOB.