Taxing ingame gold was actually an issue that came up in congress last year. I am not sure if the democratic-led congress now will continue this discussion or not.
Now this was taxing the gold not the gold farmer sales. What does that mean basically? You earned X amount of gold last year in WoW total you have to pay $$ to Uncle Same at tax time. Already certain states charge a tax on the subscription fee, they are also considering taxing virtual sales.
Taxing virtual property sales is not legal under current US law; since no actual exchange of ownership occurs, you are charging essentially for the "effort that went into getting the item". I.e., a service business, and not a sales one. Services are only taxed when specific laws exist to tax them (restaurant tax, for instance).
That said, such a law could of course be implemented. It just hasn't been. Yet.
The game company (again, barring major legal reversals) cannot be responsible for taxes on exchanges of goods in their games. Why? First, because the exchanges themselves are illegal (in most games, anyway - in games where it is legal, then there could be an issue). Breaking a EULA is a violation of contract law, and basically - if the user sells or buys things against the EULA, it's NOT on the company's head. Second, there is no exchange of goods or ownership. If the game company shuts down the server the day after you spent $21,000 buying an account from someone, you have no legal recourse to recover your money. Sucks to be you; so sad, too bad. The legal fact is, despite what players want to think, EVERYTHING you use ingame, from your character to your items to your money, all belongs to the game company. You pay a monthly fee for the use of those things, and the game environment.
But you never OWN any of it.
Chasing item sellers for tax is rather like the IRS trying to go after a smalltime drug dealer for not paying taxes on his income. Now - they CAN do that. Al Capone was put away for tax violations, not for the numerous murders and other charges he was suspected of. So it can be done. It's just so smalltime in most cases (or operating in other countries and thus untouchable, in the larger cases) that it's not worth the effort.
Originally posted by JYCowboy Originally posted by Owyn I don't see taxes being an issue. If it's LEGAL, then people can sell the items, and the buyer is required to pay sales taxes to their state, same as any other over-the-internet purchase. The fact that ALL of those purchases are hard to track, and therefore almost never collected on, is a much bigger issue than game items will EVER be! Anyway - if it remains ILLEGAL, then of course there is no tax, because you cannot sell an item which does not belong to you, thus there is no sale to be taxed in the first place. Finally, if selling items were deemed ILLEGAL, but paying someone for the service of collecting something for you is deemed legal, then again - no sales tax, because you're paying for a service and not for an item.Short form - unless the courts do a 180 degree reversal on their stance regarding online property, the government is never going to get any taxes from virtual item sales. It's illegal to sell the items, rendering any such sale untaxable, and the questionable 'sale of services' method, if legal, isn't taxable either (except as possible income tax, which is already being paid by the larger groups doing this). Re: Cheating. It doesn't bug me when a player cheats in a singleplayer game. When they cheat in a multiplayer game, it effects every other player in that game, and therefore (if I am playing there) me. I would vastly prefer it if online game companies made a stronger effort to eliminate cheaters of all sorts. And if they can't, then drop the rule - having rules to a game which you cannot enforce is just silly.
Let me broaden your view, What about Money owed to the IRS from Korean Farmer Organizers? Players are sending US dollars to non-US profitieers who do not pay a tax. US costumers are not paying a sales tax on the services from the Gold Farmers. How does the IRS get its money from this situation? The answer will turn around and Bite the Game company that has made the situation. This is why its a major issue. Who is going to pay the tax? There is large sums being exchanged and Uncle Sam wants his share.(...)
Korean Farmers would/do pay taxes to their government, why would they pay to the US? They sell a service from Korea which means taxes apply according to korean law. Example: If they sell apples from Portugal that does not mean they pay taxes to Portugals government.
Well Owyn, the issue that the lawmakers are considering is ingame items and gold have real world value it seems now. Since most "items" you buy in the real world are taxed in some way, it is therefore arguable that ingame items can be taxed the same since they are valued with real money. I don't buy gold or items, to me it's a form of cheating, but the gold farmer's actions could now directly affect my wallet.
Plus too often the gold farmer tries to rationalize what they do by saying "oh I'm not selling you the Sword of Uberness, I'm just charging you a fee to compensate me for my time in acquiring said Sword". Rewording it doesn't change the fact that it's against the TOS or EULA, bannable and of questionable legality. Apply the same logic to the real world: no officer I'm not selling the stolen goods, I'm just charging this guy a fee to compensate me for the time it took me to get a hold of it. Yeah I'm sure the cop would buy that.
Alright, if tax is satisfied to the Koren Government, who is going to pay the US Duty on the "Service" rendered? This is a Trade without a existing agreement inforced by the business or governing agents.
Heh,
What I find socially ironic is well fed, time free ethically lax Westerners buying from impovershed, starving, laborers from the far East. I know that the money mainly goes to the handlers but I do like that they some how benefit from the excess of the well off. I just don't like that there is no accountability or responcibilty (in mass) for the money.
Comments
Taxing ingame gold was actually an issue that came up in congress last year. I am not sure if the democratic-led congress now will continue this discussion or not.
Now this was taxing the gold not the gold farmer sales. What does that mean basically? You earned X amount of gold last year in WoW total you have to pay $$ to Uncle Same at tax time. Already certain states charge a tax on the subscription fee, they are also considering taxing virtual sales.
That said, such a law could of course be implemented. It just hasn't been. Yet.
The game company (again, barring major legal reversals) cannot be responsible for taxes on exchanges of goods in their games. Why? First, because the exchanges themselves are illegal (in most games, anyway - in games where it is legal, then there could be an issue). Breaking a EULA is a violation of contract law, and basically - if the user sells or buys things against the EULA, it's NOT on the company's head. Second, there is no exchange of goods or ownership. If the game company shuts down the server the day after you spent $21,000 buying an account from someone, you have no legal recourse to recover your money. Sucks to be you; so sad, too bad. The legal fact is, despite what players want to think, EVERYTHING you use ingame, from your character to your items to your money, all belongs to the game company. You pay a monthly fee for the use of those things, and the game environment.
But you never OWN any of it.
Chasing item sellers for tax is rather like the IRS trying to go after a smalltime drug dealer for not paying taxes on his income.
Owyn
Commander, Defenders of Order
http://www.defendersoforder.com
Let me broaden your view,
What about Money owed to the IRS from Korean Farmer Organizers? Players are sending US dollars to non-US profitieers who do not pay a tax. US costumers are not paying a sales tax on the services from the Gold Farmers. How does the IRS get its money from this situation? The answer will turn around and Bite the Game company that has made the situation. This is why its a major issue. Who is going to pay the tax? There is large sums being exchanged and Uncle Sam wants his share.(...)
Korean Farmers would/do pay taxes to their government, why would they pay to the US?
They sell a service from Korea which means taxes apply according to korean law. Example: If they sell apples from Portugal that does not mean they pay taxes to Portugals government.
Well Owyn, the issue that the lawmakers are considering is ingame items and gold have real world value it seems now. Since most "items" you buy in the real world are taxed in some way, it is therefore arguable that ingame items can be taxed the same since they are valued with real money. I don't buy gold or items, to me it's a form of cheating, but the gold farmer's actions could now directly affect my wallet.
Plus too often the gold farmer tries to rationalize what they do by saying "oh I'm not selling you the Sword of Uberness, I'm just charging you a fee to compensate me for my time in acquiring said Sword". Rewording it doesn't change the fact that it's against the TOS or EULA, bannable and of questionable legality. Apply the same logic to the real world: no officer I'm not selling the stolen goods, I'm just charging this guy a fee to compensate me for the time it took me to get a hold of it. Yeah I'm sure the cop would buy that.
Alright, if tax is satisfied to the Koren Government, who is going to pay the US Duty on the "Service" rendered? This is a Trade without a existing agreement inforced by the business or governing agents.
Heh,
What I find socially ironic is well fed, time free ethically lax Westerners buying from impovershed, starving, laborers from the far East. I know that the money mainly goes to the handlers but I do like that they some how benefit from the excess of the well off. I just don't like that there is no accountability or responcibilty (in mass) for the money.