Congress to decide on taxing virtual items

Legislators expected to take position next month on whether or not gamers owe the IRS a cut from sales of in-game items, property.


For months, the community of virtual-world publishers, players, and economists has been holding its breath, waiting for the US 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 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.

"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 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.

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