Congress investigating whether IRS should tax online game loot

Sometime in the next few months, the Joint Economic Committee of Congress will publish the results of an ongoing investigation into the economies of World of Warcraft, Second Life, and other massively multiplayer online games.

What does this have to do with gamers? Well, this report could quite possibly determine whether or not the virtual gold that millions of online gamers earn and spend each day will incur real-world taxes.

A PC World article that we read today pegs the exchange rate for one gold piece in WoW at an unofficial rate of seven to the U.S. dollar. Second Life, on the other hand, actively encourages a real-world type of economy with an official market-driven rate of roughly 50 cents per 100 Linden dollars. Most game companies – and gamers – frown on buying gold from gold farmers, but when there’s an easy way to get your hands on stuff, people will be sure to flock to it.

So if the report comes out on the side of the IRS and virtual loot is deemed to have real value since it can be sold for real money, will we be seeing the government concluding that every time a fallen virtual monster gives up its prize a taxable event has occurred? Click on the “read” link below to read the full story at PC World.

Sometime in the next few months, the Joint Economic Committee of Congress will publish the results of an ongoing investigation into the economies of World of Warcraft, Second Life, and other massively multiplayer online games.

What does this have to do with gamers? Well, this report could quite possibly determine whether or not the virtual gold that millions of online gamers earn and spend each day will incur real-world taxes.

A PC World article that we read today pegs the exchange rate for one gold piece in WoW at an unofficial rate of seven to the U.S. dollar. Second Life, on the other hand, actively encourages a real-world type of economy with an official market-driven rate of roughly 50 cents per 100 Linden dollars. Most game companies – and gamers – frown on buying gold from gold farmers, but when there’s an easy way to get your hands on stuff, people will be sure to flock to it.

So if the report comes out on the side of the IRS and virtual loot is deemed to have real value since it can be sold for real money, will we be seeing the government concluding that every time a fallen virtual monster gives up its prize a taxable event has occurred? Click on the “read” link below to read the full story at PC World.