News US to tax virtual worlds?

http://www.bit-tech.net/news/2007/06/26/u_s_to_tax_virtual_worlds_/1

The US government is set to report on whether or not to tax virtual worlds like Second Life.

 

Obviously people will jump at this with distaste - when did you ever hear of someone being pleased at a new taxation measure?

One should remember however that it is far from unusal to see revenue from intangibles being taxed - you are taxed on intellectual property rights, despite the fact that from many viewpoints these are as nefarious and insubstantial as anything could ever be - virtual goods included.

However, it seems to me to put quite a large burden on the game producers to try and accurately establish the nationality of a player online - by the use of proxies etc. this can be made very difficult.

 

i hope this stays inside US borders......

 

Well character and/or account trading in WoW is illegal so I doubt they could manage to tax that. I have no idea how second life works but they want to tax the 'e-currency'?!

 

They usually bring this up every couple of years just to cause some kufuffle. I remember when I used to play EverQuest 1 and plat selling/buying was big business there were plenty of politicians/news sites banging on about taxing virtual economies.

 

honestly im not surprised our gov't is doing this since we have a massive budget deficit (Thanks Bush) and that our political system is so messed up. If they do decide to do that though, my question is, how are they going to enforce that? wouldn't people just in the end set up their own private swaps?

 

And just how could the fascist party of the free world tax something they have no control of?

 

I would still like to see how they distinguish who is a US citizen and who is not. I suppose, provided the US govt wrangles agreements with the various companies running the MMO's in question, they could scour gamer credentials and see if they have based themselves "in the United States" and by that token, levy whatever absurd money they want in tax.

But I must admit, there have been times when registering on a website, while not an MMO mind you, I simply choose "USA" as my country (as its often the first in the dropdown box) and select my post code as 90210 -- just the easiest way to fly thru a website registration. Or if i dont feel like providing my real details.

I certainly don't like the idea but as konsta pointed out, it wouldnt be the first intangible object a givt puts a tax on. I just want to know how they plan to distinguish who is who and how they will manage to get foreign MMO providers to agree to tax "only those" who flag themselves as US citizens while not others.

 

they'd probably track it through your ISP. If you go to this series of IPs on these ports then you're playing WoW, get you some taxes.

Now another point, considering the majority of people who play MMO's are under 18, wouldn't that be considered taxation without representation?

 

bah... make it stay as far as possible from LOTRO... i dont care.... the money is hard to come by already........

hmm, all the LOTRO servers are located in US, tho we got players from around the world. i wonder how they can get around that. im sure it'll piss off a few lads....

either way, im not surprised, and it does makes sense to tax even intangible properties, but hell, i still dont agree.

 

Good luck with taxing me Uncle Sammo.

 

ugh.. this is horrid.. I hope this never passes

 

so their gonna tax something that breaks the EULA (so is illegal ?) for a lot of games ?

i also have to wonder how they can even try to do it, as it would require pretty impressive monitoring

But as was said somewhere else, if its legal, its taxable (like prostitution in roman times)

 

The problem is that there's already a tax for this kind of thing.

If you earn any money from an online endeavour (Gold Farming, for instance, or selling a character) you are legally obligated to declare it as earnings on your tax forms, and pay income tax on it just like anything else.

The same thing applies to auction sites like eBay and the like.

 

Woah hold up. If you are going to talk politics you damn well better not start by insulting my Country. That is very ignorant of you. Then think about what actually they are doing. They aren't trying to "get more money" out of this and "rip off more people". It's easy to see it that way but it's nonsensical. The reason behind this is to make sure that incomes are being taxed. It is very easy for people earning an income through online sources like second life to dodge taxes and make money under the table. Yet the people still get all of the tax benefits like nice roads, boarder security, and public schooling. These people could also be living off of welfare while making some pretty substantial wages. So why is the government looking into taxes? Because the people reaping the benifit's of living in the USA are doing without paying taxes. So you need to think about this before you post an obviously one-sided story about a country you probably don't live in and maybe haven't visited that will inadvertently give un-informed readers a biased opinion about America. It's assholes like you who ruin America's name by spitting on it's face and supporting propaganda. You should be ashamed.

 

that really sucks

 

Sillyness. Everyone will just resort back to a system of drop-it-on-the-ground, guy-comes-and-picks-it-up trading style. Just like the ye olde days of Animal Crossing.

 

Basically what it comes down to is a source of income that you're not reporting. If you're making money online, they want a chunk of it, just like any other income you might have. Signing up with Google Adsense/words (whichever one you make money from) as well as any sort of referral site that pays cash (legitimate ones) require a social security number or tax ID.

They're not out to "get" online worlds, but merely updating the outdated tax laws that were written before virtual worlds. If you have an income, you need to report it. That's always been the law. I'm sick of the BU$H AMERIKKKA mentality. As much as I don't like this administration for other reasons, I'm not willing to take the stance that many of us are willing to take. The government is entitled to ANY money I make, online or not. If you're going to argue about it, argue about the tax system as a whole.

 

Dare I say "No taxation without representation"?

 

I highly doubt that this will go through. I mean, if the govt. really wanted extra income, they should start by tacking on taxes on interstate internet purchases.