Congress to cnsider taxing virtual items

[Zeus]

Gone from "what if" to "what now"

http://www.gamespot.com/news/6173095.ht ... top;more;8

[kali o.]

Gone from "what if" to "what now"

http://www.gamespot.com/news/6173095.ht ... top;more;8

The problem with this whole scenario is that, from the developer/publisher perspective, they want to reinforce the idea that "virtual items" or ingame content is THEIR property, not the property of the players.

This proposal throws that idea into doubt (and exposes the EULA to legal inspection), despite the fact that "ownership" is not needed to be taxed of generated revenue.

I have no idea what will come from this, but I can say it won't play out as currently envisioned. Devs/Pubs will resist the idea based on the fact that their required tracking runs counter to their overall position. The majority of the companies that run the virtual trade operate overseas, thus outside of US taxation anyway.

Glad to see US tax dollars uselessly at work, as usual. Hopefully, the whole thing ends up with an examination the EULA, and the exclusion of legal rights it attempts to force. That's about the only good I can see coming outta this.

[SineSwiper]

I doubt EULAs will even get mentioned. Transfer of money via sales is the same everywhere, whether ownership is involved (sales) or not (services).

[Nev]

Interesting stuff.

Man, if I were a MMO developer, though, I'd be seeking to work around this with a fury. I have every faith I could figure out a commerce system that would be at least arguably tax-exempt in court!

"Well, sir, in our game you actually trade in souls. Not money. They're souls. They give you special powers, but you can spend them too. Now do you really want to be known as the guys who put a tax on our *souls*?"

EDIT: Even better, make each piece of money a semi-sentient chatbot, and capable of arguing its legal rights as an intelligent entity. Then escape under old anti-slavery laws! Muhuhuhuhhahahahah!!!!

[Tessian]

This'll be either shut down or everyone will find a way around it...

How can you tax items that don't exist? They're lines of code...and can be copied indefnitely. It's one thing to tax the exchange of real world currency into virtual goods...but taxing a person when they buy a new weapon off of a NPC vendor? Bullshit. Will the dragon I slay to get a new rare helmet going to charge me 5% before I pick it off the corpse?

It's unenforcable for the most part and someone's just getting greedy... tax when people start making REAL money off the virtual world, not virtual for virtual...there's NO MONEY involved then! WoW currency is NOT real...you can't tax me on using it when it has no real world value...this is ridiculous.

It'll cripple anybody who wants to play these games, no one will pay tax during a game they already pay to play...it's ubsurd

[SineSwiper]

They aren't talking about virtual for virtual. They are taking about people who make a living out of buying and selling virtual items for REAL money.

I hate sales tax, but I can see where Congress may be thinking "Well, if sales for one item (food, retail, etc.) is taxed, and sales for another item (in-game stuff) is not taxed, how is that fair?"

Personally, I think all sales tax should be abolished. You're already getting taxed for earning the money, so why the hell should you get taxed for spending it? It's one or the other, not both. (Hell, raise taxes on the earnings, and get rid of the sales tax.)

[Julius Seeker]

You get taxed for food and essential clothing in the US?

EDIT, no, I asked someone, food is not taxed in the US either. Unless it is junk food or restaraunt food, which is the same as Canada and most of the rest of the world.

[Lox]

You get taxed for food and essential clothing in the US?

Depends on the state.

[Julius Seeker]

Depends on the state.

Ah, apparently California is one of those states. But I agree that essentials shouldn't be taxed. I do agree that junk food, fast food, luxuries, etc, should continue to be taxed. In my province, the new government is working on eliminating taxes on all energy efficient forms of transportation (bikes and such) along with other similar items which promote energy saving and health. One of the parties running in the last election also proposed to raise junk food taxes significantly, which I thought was a very good idea.

[Kupek]

EDIT, no, I asked someone, food is not taxed in the US either. Unless it is junk food or restaraunt food, which is the same as Canada and most of the rest of the world.

Again, it depends on the state. <a href="http://www.tax.virginia.gov/site.cfm?al ... Retail">My state</a> taxes all food, although food for home use is taxed less than food for immediate consumption.

[Zeus]

This'll be either shut down or everyone will find a way around it...

How can you tax items that don't exist? They're lines of code...and can be copied indefnitely. It's one thing to tax the exchange of real world currency into virtual goods...but taxing a person when they buy a new weapon off of a NPC vendor? Bullshit. Will the dragon I slay to get a new rare helmet going to charge me 5% before I pick it off the corpse?

It's unenforcable for the most part and someone's just getting greedy... tax when people start making REAL money off the virtual world, not virtual for virtual...there's NO MONEY involved then! WoW currency is NOT real...you can't tax me on using it when it has no real world value...this is ridiculous.

It'll cripple anybody who wants to play these games, no one will pay tax during a game they already pay to play...it's ubsurd

From what I've read, there was a guy who became a real-life millionaire from selling property in Second Life. I think that's been one of the drivers along with the eBay auctions for virtual items or MMO characters.

There are people making real money off this already, that's the problem in the minds of the gov't. So what they want to do is establish ownership rights and taxes in a virtual world the same way they do in the real world. Who's to say you don't pay capital gains tax on a piece of property you sell in the virtual world?

But I do agree, the real money has to be involved but that doesn't mean the gov't won't try to tax even virtual money. The gov't is just trying to find a way to enforce, which it can do through business licences and allowing/disallowing companies to actually conduct business. Of course, if they move off-shore it's a little more difficult. But they've been working on setting virtual boundries based on countries for a while. And that would be essential to the implementation of the taxation.

[Don]

If you make money off something, the government will tax it. You're supposed to be taxed for profit made from selling illegal drugs, for example.

Consider the online economies always boost having the GDP of some third world nation, there certainly is economic activity involved. Just because the goods are virtual just makes it more of a service than a commodity. Since US is a service-based economy, I don't see why the lack of physical good matters. When you buy software the bulk of the money goes to the data as opposed to the physical parts like the box or the CD and no one has a problem with that.

[Tessian]

The way I read the article it appeared like they wanted to tax any purchase you made in a game...

I agree with this then, tax the ever living shit out of people who try to make money off of these games. People who try to turn a game into a living ruin the game for everyone else... if they could actually enforce it I'd love to see even a 20% tax.

Don't most MMO's make it illegal to do this anyway? I know Blizzard did at one point, if not still.

[Zeus]

The way I read the article it appeared like they wanted to tax any purchase you made in a game...

Actually, if you go to the original link and go to the link within that to news.com, they are thinking of taxing virtual sales where they're not necessarily turned into cash.

Now that's ridiculous

[Tessian]

Now that's ridiculous

It's also asinine and impossible...