LOLNRL Taxes in Games

zieen

http://news.yahoo.com/s/nm/20061016/wr_nm/life_secondlife_tax_dc

So the IRS wants to tax virtual economies. I think this is extremely funny.

Adreal

Inside Second Life, users can buy and sell virtual objects from T-shirts to helicopters, develop virtual real estate, or hire out services ranging from architecture to exotic dancing. Up to $500,000 in user-to-user transactions take place every day, and the Second Life economy is growing by 10 to 15 percent a month.

I'd say stay out of the virtual world. The gov's already got the income tax and that's what people are using to buy these virtual items - their income. Taxing one's income a second time would just be wrong - no matter how many stages of life it goes through (virtual or realistic). Unless I'm missing something here, that's my stance on it.

outfctrl

'In-game assets' represent enjoyment value--what we call imputed income--that's not taxed.

 It's a little bit like getting an autograph of a baseball player or movie star. You could sell the autograph, and folks do, but we don't tax folks who get the autographs and don't sell them."

For its part, the IRS would say only that it expects players to report any real-world earnings from the sale of virtual goods.

This would be considered RL income.

Adreal

'In-game assets' represent enjoyment value--what we call imputed income--that's not taxed.

 It's a little bit like getting an autograph of a baseball player or movie star. You could sell the autograph, and folks do, but we don't tax folks who get the autographs and don't sell them."

Yeah. Pretty much sums it up.

For its part, the IRS would say only that it expects players to report any real-world earnings from the sale of virtual goods.

At which point I would laugh. Making money off of people's virtual lives is what the MMORPG business is all about. That's fine if it's taxed, but a situation like you gave above shouldn't be counted into taxes. It's pretty much the same thing as profiting from profressional transactions, but I'm still against it for the same reason I'm against advertisements in MMORPGs. I can see that a company which profits from the sale of virtual items rather than a fixed rate of income (the monthly mmorpg fee) can be a problem. So if that's how Second Life runs I can certainly see how it could be a problem. If all companies started charging their customers like this, then they could get a good amount of non-taxable income. I only fear for the future of the internet. What will be taxed next?