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Lawmakers Trying to Head Off Massive Taxation
An anonymous reader writes to mention a Reuters article about a lawmaker's attempt to stop the Government's interest in taxing Massively Multiplayer Game content. R-New Jersey Jim Saxton is cautioning against exploring the taxable status of in-game items. From the article: "'The goal of the forthcoming Joint Economic Committee study is to help lawmakers understand the issues involved and head off any premature attempt to impose a tax on virtual economies,' he said. Under current law, Saxton said if a transaction takes place solely within a virtual world there is no 'taxable event.' Dan Miller, chief economist for the Joint Economic Committee, said earlier this week that the committee's study would start with a blank slate and be completed by the end of the year."
In order for any taxation to take place in USD, there would have to be a way to discern a conversion rate from game currency to USD. For transactions involving USD to game currency and vice versa this is simple, but for game currency to game currency transactions this would be impossible without some standardized way to convert. I believe that claiming the going rate at unauthorized currency stores would be a hard one to put across. Moreover in the click thru agreement of just about every game, it is stated that the ingame items, currency, etc all belong to the game company. As such, any transaction happening solely within the game would be a sale of an item to oneself. I can't honestly see how that transaction could ever be passed off as taxable.