Congress set to issue virtual taxation report in August

For months, the community of virtual world publishers, players and economists has been holding its breath, waiting for the U.S. Congress to issue its report on the potential taxation of virtual goods.

Well, we don't have to wait much longer.

Dan Miller, a senior economist with the Congress' Joint Economic Committee, told CNET News.com on Friday that he expects the committee to issue its report during the upcoming Congressional recess next month.

What that report will say is unknown, as the committee has kept entirely quiet about its thoughts.

However, it's clear that something will happen.

"Given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues," Miller, who is a fan of virtual worlds and economies, told CNET News.com in December. "So it is incumbent on us to set the terms and the debate so we have a shaped tax policy toward virtual worlds and virtual economies in a favorable way."

Meanwhile, a lot is riding on the outcome. If Congress signals it intends to start taxing in-world commerce, that could create huge problems for publishers who may have to figure out efficient ways to track all such trades. If Congress goes the other way, many people will feel that it is just punting and that it will still only be a matter of time before some major government decides to step in.

[hawaiianvolcanoes]

Well well well....so "net business" will simply move off-shore.

And with it more jobs. It's bad enough that some states like North Dakota etc... are frothing at the mouth over a few poor people here and there ordering things over the net. Taxes alter peoples buying habits...period.

[Jahntassa]

This isn't a 'net business' issue

Once again, knowing what the article is talking about is helpful.

This has NOTHING to do with taxing sales of physical goods over the internet. Nothing to do with buying from Amazon or NewEgg.

This has to do with World of Warcraft, Second Life, and any number of other 'Virtual Environments' where people sell and trade. Sometimes, like in the case of Second Life, for real money.

If this goes forward, it would only make sense (if it made sense at all) to tax things that can translate into real-world monies. For example, World of Warcraft. You receive items and trade / auction items constantly. Are you telling me there's going to be a real 'dollar value' tax on these virtual items?

Ridiculous.

[palewook]

its dumb.

that simple. if congress and the irs want to start taxing imaginary items that are made of 1's and 0's which have no real world value (see the eula you sign with most mmorpgs), they can start paying everyone's monthly gaming subscription fee, your monthly ISP subscription, and spend the time raiding on our toons. they can have all the drops too.