When Tax Day Comes to Azeroth

1up is running a short piece originally from Games For Windows: The Official Magazine. It discusses the inevitability of taxation coming to virtual worlds, and a little bit about what that might mean in the indeterminate future: "Taxable income includes everything from tangibles like cookies to more ephemeral and subjective things like works of art, concert tickets, or advice. Those big, scary books that most sane people pay accountants to understand for them don't really narrow down what counts as taxable income so much as meticulously define it as damn near any piece of matter, energy, or information that should happen to pass into your possession over the course of the year. That goofy World of WarCraft gnome that GFW editor-in-chief Jeff Green's been leveling isn't any more intangible than, say, stocks."

Good luck finding me IRS

[wakingrufus]

Suppose i pay for my mmorpgs with game cards and use proxies to connect tot he game servers. how then can anyone be expected to track how much gold i have accumulated on my virtual d00d? I can see taxing the sale of virtual goods for real money (not that i agree with it), but it seems silly to expect purely in-game assets to be taxed.

I see no problem with taxing online games

[simm1701]

As long as its one of 2 ways

1) VAT/sales tax on the subscription and game purchase - oh they already do this don't they? :) (not to mention tax on electricity usage, network connections staff wages and all the other costs the company incurs, oh and on their profits if any)

2) On in game items that are bought and sold for real money - ie a commission on in game to real life transfers.

Anything else is just pure nonsense!!

Re:Frist Psot

[tibike77]

As soon as in-game wealth CAN be used as an actual source of income in the real world, I have no problem with it being taxed.
But as long as that "wealth" stays online and never gets exchanged for real money coming into my pocket, stay the fuck away from my ISK and T2 blueprint copies :P

Ridiculous on several counts

[MeanderingMind]

1) WoW players pay Blizzard for service and access to data on their servers. The ownership of said data never leaves Blizzard.

2) There is no clear market value for any individual item or character in WoW until such time as it is "cashed out" or sold.

Taxation will come to virtual worlds, but it would be supremely idiotic to think that it would be worth anyone's time or effort to tax anything but money making transactions.

Any other scenario would see incredible resistance from companies like Blizzard. It's a programming hassle to keep track of everything as is, and now they have to maintain financial records on every denizen of Azeroth?

Majordomo: Behold Ragnaros, March has come! Perhaps we should do our taxes?
Ragnaros: TOOOOOO SOOOOOOOON!!!!!

Untapped Markets

[Clever7Devil]

I'm going to repost what I said the last time this came up (Two weeks ago):

Taxing people on real dollars earned is nothing new. It doesn't matter how the money is earned. According to US law, anyone who "ebaY's" their WoW wealth owes taxes on the money received. If you try to cross the line between real and virtual "value", you open up a Pandora's box that would be hard to close.

First of all, Blizzard would be in court the day any such ruling came down.
Second of all, if you legitimize the transfer of access to virtual property by assigning it real world value, you open it up to all the issues our money faces today.

Would you need some sort of FDIC-type entity to protect the guild bank? Guild leader gets keylogged, don't worry, your Epics are insured.

Repair bill insurance? Arguably your character is your main tool for earning. If he dies or takes damage while performing his function, the repair bills begin to stack up. Since insuring this guaranteed expense is unfeasible, can we write it off? What about the other built-in money-sinks? Arguably my epic mount is a sound investment towards future earnings. It will allow me to grind and gather more efficiently. Can I write off this 5200g expense? Can I write it off even if I've never sold virtual goods for real currency?

Credit? If I take out a loan from a guildie, and then I stall on paying him back, can he report me to a real world collector? Will it affect my credit score? I'm sorry sir, we regret to inform you that we cannot finance your home at this time. Apparently you have a large outstanding debt with xlegolasx. Would this spawn lenders and credit-issuers in game? "Mastercard, accepted at Auction Houses everywhere. Yes, even Gadgetzan."

I'm just saying. Tax people if they earn money from anything. That's fair, it's the law. But taxing people who don't have any intention on making money from their hobby would cause more problems than it's worth.

Yeah, that still sums up the issues in my mind.

Look on the bright side?

[JimXugle]

If an asset is important enough to be taxed, than it must be of enough value to be considered an item of value in the civil and criminal courts.

But seriously... Hands off my gold!

Here's a Thought . . .

[Dausha]

You've heard the likes of Steve Forbes say that a flat tax would work wonders for the U.S. Why not use a virtual world setting to test it out? That is, have a virtual world where there is progressive taxation, and another where there is flat tax. Then, measure the effects. I mean, why not use virtual worlds to test out various economic theories?

Doesn't matter.

[pavon]

It doesn't matter if you own it or not - this is income tax, not property tax. If you receive a good or service in exchange for another good or service, then it is possible that it could be taxed as income. But I really don't think that is going to happen. The motivation for the complex definition of income is to prevent people from sheltering *large* increases in wealth by receiving the payment in a form that does not fit the regular definition of salary or capital gain. The IRS and congress couldn't care less about the piddling trade that is taking place with-in virtual worlds, because it isn't being used as a tax shelter. All they care about are the people that are receiving real world income providing a service to gamers (gold farmers, item crafting, etc).

Re:Ridiculous on several counts

[snowgirl]

Yeah, I got one of those Epic drops from that Huge boss at the end of that massive Raid, but I had to pass it up, because the taxes would have killed me. Turns out that they would have charged me $1,000 in tax on the item... that just wasn't worth it.

Oh, and griphon rides? I don't use them anymore. Ever since the Alliance started charging taxes on flights the prices have been soaring out of this world. This one time, I got a flight from Stormwind, to Ironforge, and I kid you not, they charged $100 to my credit card, claiming it was some Federally mandated aviation tax!