Virtual tax is a proposed USA tax on internet gamers for items bought or traded solely within the virtual world (Internet game worlds). The tax on a transaction would be considered as if it were a purchase or sale (if real currency is involved) or barter (if not). Virtual property, on the death of the owner, would be considered as if it were any other

intangible Intangibles or intangible may refer to: * Intangible asset, an asset class used in accounting * Intellectual capital, the difference in value between tangible assets (physical and financial) and market value * Intellectual property, a legal concep ...

property for the purpose of estate or

inheritance tax An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died. International tax law distinguishes between an es ...

. The

Joint Economic Committee The Joint Economic Committee (JEC) is one of four standing joint committees of the U.S. Congress. The committee was established as a part of the Employment Act of 1946, which deemed the committee responsible for reporting the current economic co ...

of the U.S. Congress has investigated taxing such transactions. This tax might include items bought with virtual currency, virtual items traded for other virtual items, real items traded for virtual items, and real currency traded for virtual items.

Examples

Many online games, like '' Maple Story'', have implemented a tax system to curb the inflation rate of in-game items. The tax is collected whenever a trade is conducted between two players. A small percentage of in-game money paid by the buyer is collected as tax before reaching the hands of the seller. The game developer claims that by taking out a small amount of game money in each trade, it will curb the

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...

. However, many users stated that this is the biggest push factor to inflate, as the sellers now demand higher prices before selling an item (in order to make up for the loss of in-game money through tax system). Also, some users state that the inflation will eventually stop without the interference of the game developer. They claim that as more players achieve high levels, they would be able to hunt more monsters and deliver more equipment. Like the real world, the

economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...

of online games are based on

supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...

. When more items are released into the market, it pushes the supply up, resulting in cheaper goods.

Recent restrictions and changes

eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...

, in order to protect virtual property and avoid legal action against them, has banned all sales from virtual sites. The only exception to the ban is ''

Second Life ''Second Life'' is an online multimedia platform that allows people to create an avatar for themselves and then interact with other users and user created content within a multi player online virtual world. Developed and owned by the San Fra ...

'' which in the eyes of many, including eBay representatives, is not a game. Many of the major virtual world (e.g. ''

EverQuest II ''EverQuest II'' is a 3D fantasy massively multiplayer online role-playing game (MMORPG) originally developed and published by Sony Online Entertainment for Microsoft Windows PCs and released in November 2004. It is the sequel to the original ...

'') providers have also started their own virtual trading shops. Players will be able to trade virtual items with other players for real cash, and the providers will receive a small tax charged on every transaction. The government has also stated that they want to start taxing online game transactions; however, charging these new taxes will require new equipment., by Julia Layton, How Stuff Works, ''February 3, 2007''

Examples

Recent restrictions and changes

See also

References

Further reading