The weekly Philadelphia City Paper kicked off the kerfuffle with an article spotlighting several small-scale bloggers who were startled to receive letters from the city demanding that they shell out up to $300 for a license allowing them to operate a local business. One of the recipients had raked in a whopping profit of $11 over two years from his blog.
"Personally, I don't think Circle of Fits is a business," music blogger Sean Barry told the newspaper, commenting on his minimally lucrative venture. "I don't think blogs should be taxed unless they are making an immense profit."
But in Philly, anyone "conducting commercial activity" is required to buy a business privilege license that costs $300 for a lifetime, or $50 per year. Businesses must also pay taxes on any profit they make.
That's how the Philly bloggers landed on the city's radar: Those who followed the law and reported their blog's revenue to the IRS triggered tripwires set up to find local businesses operating without licenses.
"The IRS is the fastest way to find them, though we have other avenues that we don't advertise," a Philadelphia Department of Revenue representative told CNNMoney.com.
City officials say they did not target blogs specifically, and only sites serving ads -- and therefore making money -- are subject to the business license requirements.
"Some of those blogger folks didn't realize when their passions became a business," the city rep said. "We haven't singled anybody out. We love the self-employed. Philly is a city with a creative economy."
Philadelphia isn't alone in demanding that local business operators cough up registration paperwork and fees. Boston, Los Angeles and Washington, D.C., among other major cities, also require business licenses.
An employee at the city clerk's office in Boston, where licenses cost $50 and run for four years, didn't have much familiarity with the blog licensing issue but said she "supposed" bloggers were included in the requirement.
A clerk at Washington's regulatory affairs office said bloggers should have a "general business license" that costs $324.50 for two years. But a Los Angeles official said Internet-based businesses in its jurisdiction do not require licenses.
Business licenses may be nothing new, but that didn't stop commentators from whipping a firestorm around the notion that for-profit bloggers should be required to sign up for one.
NBC's Philadelphia website accused the city of "taking a step closer to an eerie Orwellian state where creativity is crushed in the name of 'the greater good.'" Right-wing blogger Michelle Malkin blasted the city for "requiring a license for Internet activists and hobbyists to exercise their free speech."
On the other hand, the Washington Post pointed out the city was merely following the letter of the law and treating businesses equally: "Bloggers running ads next to their copy shouldn't be exempt if the requirement also applies to people selling old junk on eBay."