MMORPG Tax... for real...

[BLiZZaRD]

Apparenly the US Congress is holding a meeting to see how much they can tax you for your online empires in such games as Ultima and WoW..

And gamers with a theoretical treasure trove of online assets aren't chuckling anymore. The U.S. Congress is actually looking into the taxability of Mighty Rage Potion and Shrouds of Provocation.

or this part:

And when you die, if your virtual assets are worth a total of more than, say, $2 million, your heirs would
theoretically have to pay an estate tax on all of the stuff you collected in your years of online home-building, monster-killing,
sword-crafting and ore-collecting.

The Link if you are so inclined

What the hell are they thinking?

[Twey]

I laughed.

As the article notes, if this actually happens, the online RPG industry will likely collapse.
Interestingly, though, this has a bearing on that thread I've been looking for time to reply to: it's a question of whether data can be considered property.

[BLiZZaRD]

My personal feelings are it doesn't have a value unless you trade for a viable commodity, such as cash.

Net worth of an item, be it virtual or physical has no value whatsoever. My father taught me this when I was very young. I have a Nolan Ryan rookie season baseball card, autographed and in mint condition. You can look in all the books you want, they may tell you it is worth X amount of dollars. But as my dad said... "If someone will only give you a dollar for it, it is only worth a dollar."

[djr33]

Hmm... weird.
If there is a cash value to something, then I suppose that means there is reason to tax it.
...There is cash value to what is being discussed here, right? Not just fake-world "money"?
//I'm a bit confused.

[jscheuer1]

A little background might be useful. Now, this is just as I understand it:

Folks started doing these games at some point in the past and they were just for fun, though some folks got really involved. I had some of these type rpg's on my BBS, in fact. The one I remember best was 'Tradewars', based loosely on 'Star Trek' and the like. You got cargo and ships mostly, maybe planets. The game could be pretty easily modded so that the names of things and their properties could be different in different versions. In one version a Sysop had renamed the 'escape pod' (the thing you ended up with if your ship was destroyed) the 'Cry-O-Pod'. I thought that was hilarious. Anyways, as time passed and these games became more sophisticated, widespread, and time consuming. New players, and those with less time to play than they had once had, looked for a way to acquire goods and property without actually playing for them. Others devised ways to accumulate these things in boiler rooms full of low wage 'players' and via virtual players (programs that would play the games). A cash market arose. Some people make a very good living at selling these things for real money. At that level it is income and probably should be taxed as such. Taxing items in the games that have never been bought or sold in the real world though, is a bit of a stretch but, certainly not beyond the realm of possibility in the minds of some tax lawyers, I suppose.

[BLiZZaRD]

Agreed, but once again the country (US now, but you know it will spread) fails to see the difference, or the line, between virtual and reality. If you and I trade a magic potion through FTP for a sack of gold, neither one of us has made any finacial gains in real life. That cartoon drawn sack of gold wont pay my rent this month. Therefore it shouldn't be taxed.

Contrary, if I send you a magic potion online and you send me a check I take to my bank, then yes, perhaps I should be taxed on that.