License to Blog

An article on the Business Insider web site this week was talking about bizarre government regulations, at various levels, which led me to this story on The CNN Money Page about the City of Philadelphia requiring bloggers to pay for a business license if operating within city limits. As the license is $300 (or $50 per year) and most bloggers make rather less than that (I have yet to realize any profit on this one, for example), this probably seems a little harsh. On the other hand, there are blogs that make money; there are a few of them that make quite a lot of it. The larger question is really about businesses licenses, and who should or should not pay them, and that seemed like a subject worthy of a closer look…

First off, most cities and some counties require business licenses in order to fund city operations. The logic is fairly straightforward: if your business operates within city limits, then you are benefiting from various city services (street maintenance, police and fire departments, pro-business advertising campaigns, various public works) and it’s only reasonable that you should chip in for those. Things that are regulated by the county will usually be licensed by the county government instead, such as in the case of food preparation health certificates being issued by the County Department of Health. Here again, you want the place in which your business operates to be known for food that is safe to eat (and to actually HAVE food that is safe to eat), so it’s not unreasonable to ask you to help pay for those regulatory agencies. But what if your business places no demands on city, county, or state infrastructure whatsoever?

For the most part, a blogger operating in Philadelphia has exactly the same impact on city and county services as a blogger operating on the other side of the world – which is to say, nothing. The person writing the blog might use some city services, but he or she is already contributing to the city’s finances through sales taxes, property taxes and other fees. Some cities agree with this position and don’t include bloggers in their licensing requirements, but others have pointed out that in order to be fair all municipal business laws should be applied to all businesses equally, and gone on requiring license fees. Complicating the matter still further, some pundits have suggested that blogging is protected as free speech under the First Amendment, and that applying any restrictions to it are therefore unconstitutional…

Personally, I am reminded of a client I worked with under the SBDC program who had gotten a letter from the City of Los Angeles demanding business license fees going back a decade or more, plus a ridiculous amount of penalties for non-payment all of those years. My client ran a small consulting business out of her home, and spent most of her time in the field – hence, did very little actual work in the City of L.A. The amount the City was demanding was out of reach – it was more than the business brought in over multiple years – and the letter was threatening prosecution and jail time if she didn’t pay…

I suggested that she try calling the City office (using the telephone number on the letterhead) and explaining the situation; if they could work something out it would be better for all parties involved than going to court would be. So my client made the call, explained that she hadn’t been working in the City hardly at all, and had only lived there for a few years in the first place (not the dozen or so the demand letter wanted her to pay for), and after some wrangling and arm-waving, the clerk she spoke with offered to let her purchase the appropriate license for that year (it was under $100) and pay an extra $50 or so to have the license back-dated eighteen months to cover the delinquency…

It’s not as perfect a solution as the City dropping the whole case, of course, but anytime I can shave three zeroes off the end of somebody’s bill (e.g., take it from $50,000 to $50), I always feel as if my day was not a total loss…

I don’t know how these various municipal blogging cases are going to turn out. Unless I’m very badly mistaken, these sorts of actions are going to precipitate whole new areas of case law, and it may take some time for all of the legal precedents to shake out. I just know I’m going to be very careful to check on the local ordinances if I ever decide to monetize this blog…