Business Privilege

[rowyn]

Ysabetwordsmith linked to an blog post about Philadelphia taxing bloggers, which made me go "What? The city passed a tax specifically on blogging?" I followed the link chain back to Philadelphia's City Paper, which clarified the city is levying their $300 lifetime business privilege fee on anyone running a business in the city. Which seems almost reasonable until you realize that the city defines as "business" basically anything you could possibly due which results in someone giving you any amount of money, no matter how small.. So the blogger averaging $25 in annual revenue from ads is a "business" in the city's eyes, and needs to pay a flat fee for the privilege.

I don't know if Philedelphia is actually unusual in having this kind of fee, or if they're just unusual in choosing to enforce it on people who don't make money. It does remind me how much the government in general hates micro businesses, though. If you don't have the kind of entrepreneurial plan that you want to gamble hundreds of thousands on (or can convince someone else to do so), governments in America would generally rather your business did not exist, and will fine/tax/regulate it accordingly.

This is not quite fair, because American governments at various level also have programs to encourage small businesses, and if you are willing to navigate a sea of endless redtape, you can possibly -- if you are lucky and belong to the kind of group that government programs like -- get more help than harm from the massive schizoid bureaucracies that rule us.

Sorry, I must be feeling excessively cynical today.

But taxes and fees (from all levels of government) are scary, scary things to me. I haven't considered them during the handful of times in the past that someone has paid me to produce a piece of artwork. Maybe I should have. I'd been thinking that my hobbies cost me far, far more than they've ever earned me, and that the IRS would regard it as a hobby and not something I needed to file for. But even if that is the attitude of the feds, what about the state? City? County?

"Hire an accountant", they told her. For her business that hadn't earned enough in two years to pay an accountant for one hour.

I've seen haikujaguar lament websites that don't have "donate" button. 'I want to support their work! Why won't they let me?'

Well. There's one answer for you. :(

Comments

[terrycloth.livejournal.com]

I'm pretty sure the IRS wouldn't care. You don't even need to file if you make less than some number of thousands of dollars, and I know there's a much smaller limit where you're allowed to forget to report gifts (that one's pretty small though).

OTOH, State and Local tax collectors are generally more desperate (and disparate).

But even in this horror story case, they're saying 'hey, pay this tax you didn't know about' and not 'hey, you go to prison for failing to fill out the paperwork' or something.

[rowyn]

But in your daydream this DEFINITELY ends in prison! O_O

More discretion than I'm comfortable with

[telnar.livejournal.com]

What you're describing is how a normal and reasonable human being would be likely to act -- not the worst that can happen.

Under many tax laws, they have the option to prosecute you for failing to pay taxes you've never heard of (and there's no statute of limitations if they decide you're committing tax fraud), and if they are slightly more generous than that, they can demand payment for the past [statute of limitations] years plus interest and penalties.

If they go the fraud route, you may win in court if you've never heard of the tax, but the process won't be fun and will cost far more than the tax.

Re: More discretion than I'm comfortable with

[terrycloth.livejournal.com]

Well, anyone can always charge you for something you're not guilty of. Or sue you for something you didn't do or that doesn't deserve a lawsuit. That *is* scary but it's also kind of beside the point, unless they're actually doing it regularly.

Re: More discretion than I'm comfortable with

[rowyn]

The issue of being prosecuted for something you did and that is technically illegal, but that a reasonable person would not realize was criminal, is kind of the by-product of having way too many micro-manage-y laws, though. Or laws that are really vague. Like the teenager who was threatened with child-pornography charges for emailing a picture of herself in a bikini. x.x

Re: More discretion than I'm comfortable with

[telnar.livejournal.com]

I don't know the statistics, but in general I prefer to trust incentives than goodwill. I'd feel a lot more comfortable if IRS agents with a history of hassling people from whom little or no money was collected were fired (as opposed to protected by civil service law) and if courts routinely awarded compensation to anyone who demonstrated that tax charges brought against him were without merit.

Re: More discretion than I'm comfortable with

[rowyn]

The issue of 'the worst they can do' (even without prosecuting you for things you didn't actually do) is pretty widespread across various areas of law.

Re: More discretion than I'm comfortable with

[telnar.livejournal.com]

Agreed, and I'm against it in other areas as well.

[whitefangedwolf.livejournal.com]

What's creepy about the Philadelphia business license is that the Philadelphia city website says that it is required by "businesses that are located outside the city limits but do some or all of their business activities in the City." Based off of the way that Philadelphia's bureaucrats have been applying their rules, they could apply this law to anyone who runs a blog with ads that's viewed by people in Philadelphia. If I were running a blog with ads, I would be setting up a warning splash page that said my blog could not be viewed by people in Philadelphia just to protect myself.

[rowyn]

O.o

o.O

I think there might have been a court ruling or law to protect internet sites from this could of power grab, for exactly the reason that you can't reasonably expect a website owner to know the legal requirements for every jurisdiction that can view their site. But I'm not sure about it.

[whitefangedwolf.livejournal.com]

I hope there has been a ruling or law like that, but considering how many times a local authority has done something blatantly illegal and has only stopped because someone fought them in the courts, the possibility of a power grab is enough to make a sane person paranoid.

[haikujaguar.livejournal.com]

I read that article, yes, and like you I boggled at it.

I continue to try to limit just how much time I spend thinking about taxation in this country because it will destroy my blood pressure, in the sense of 'all my veins and arteries exploding at once.'

[rowyn]

It's one of those things that's so huge and quasi-functional that it's hard to believe it'll ever get simplified, much less fixed. :(

[haikujaguar.livejournal.com]

Yes. :/

Infuriating, that basically the government has arranged things so that they can take money from us with keeping us terrified over whether there's some law somewhere we've accidentally broken that would allow them to take more money from us. And then they go and use that money irresponsibly, and the tools we have to call them on that behavior are too coarse/broad and not very effective.

Having said that, for the IRS I found using the 'Other Income' section good for non-business and non-hobby money.

[rowyn]

The information age is making it a little easier to figure out what laws are out there, but it's also making it easier for government officials to impose even more "innovative" ways of gaining revenues, with even more paperwork involved. Your next computer, or a handful of large art-supply purchases from one vendor in a year, will probably require you to file a 1099. D:

[haikujaguar.livejournal.com]

Yes, I know about that particular law. I had a long discussion about it with the gentleman who owns the local shipping store and he just shook his head and said, "No one's going to do it." :,

It's a law designed for people with accounting divisions, not for one-person businesses who have to keep track of their own paperwork.

[rowyn]

Er, and sorry about your blood pressure. I'll stop reminding you think about taxes now. c.c