The TaxProf Blog links to an extremely interesting article by Julian Dibbell on whether virtual profits in online multi-player games are taxable under the Internal Revenue Code. There’s also a link to a second article on CNET titled “The Tax Man Cometh, Online.”
So, let’s assume you exchange your spells for 100 Gold Pieces. Is there any tax due? Well, since it’s in a game, I’d assume not. But if you sell your spells for $100, haven’t you made $100 in income and owe tax? Luckily for online gamers, the IRS’ response was “That’s so wierd.”
I think it would be humorous if every time there were an online transaction in one of these games, a virtual IRS agent appeared and demanded his cut. Actually, this isn’t as far-fetched an idea as you might think.
The people playing these games pay a subscription price to the companies running the games. Aren’t taxes a fair way for the gaming companies to earn their incomes?
Tags: VirtualTransactions
Nice article