Congress set to issue virtual taxation report in August

CNET has an article up about taxation of virtual property/assets:

Congress set to issue virtual taxation report in August

A Congressional Committee will issue their report on taxation of virtual assets in August. I find it highly unlikely that they will move on this anytime soon. There have been fears of Internet taxation for many years now, and it’s always shot down for fear of impeding the growth of the Internet. Even today when the Internet is mainstream and in many homes in America, we still have not seen a move to tax sales on the Internet. Why would Congress decide all of a sudden that virtual property needs to be taxed?

Many virtual worlds are still in their infancy, including Second Life. The subscriber bases are still far too small to base any national tax policy on, yes even with Second Life. The big money is changing hands in illicit trade in virtual goods and gold in MMO’s. Most of this is done off-shore, so any legislation here in the US will be unenforceable overseas. Would Blizzard all of a sudden have to start tracking prices in the black market for virtual goods in order to file W-3D’s every year on the potential income if you were to sell that purple epic drop on the open black market in violation of your terms of service agreement?

This is one of the stupidest ideas I’ve seen in a long time. I would lose all faith in our lawmakers if they move forward with this. At some point years down the line it may be necessary to tax virtual assets, but now is definitely not the time.

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