Friday, February 10, 2006

The IRS wants to know if I my sorceror is a level 9 ??

This is an old article about Massively Multiplayer Online Role-Playing Games (MMORPGs) and the economic theory information that can be extracted from them. There is also a link in that article that leads to a more scholarly article on the subject. I have yet to read it, but I think I'll browse it this weekend.


When I was in the MTC, a peer of mine had made $10K+ selling items he acquired whilst playing Everquest. That was enough to support his mission from SLC, UT to Houston, TX-Vietnamese. I thought it was anomalous.


Just listening to NPR, I heard that people are now realizing the tax situation. Mapledell told me of a man that made $800K by hiring others employees to play Everquest for him. So now the IRS wants their chunk?

What tax obligations does an MMORPG player incur? When you sell a virtual sword you should be paying tax on that profit. That's a little weird.

Apparently there is also a tax on bartering in our country. I don't know the specifics on it, but apparently when you trade good/service for a good/service, you are still obligated to pay the IRS for the value of the transaction. So now, in the virtual world, you must pay a tax when trading a King Cremeon Sword for a Brightstar Buckler Shield? This is getting weird. Sorta makes the IRS look goofy, doesn't it? Why do we have to pay taxes on transactions? Is that what we want to discourage? That's really wacky.

(At least the buckler has +110 endurance. That's just what I've been needing.)


Not only that, but if you go slay a dragon, and from beating him you get a sword that everybody wants, you are liable for taxes on the Dragon wealth. I guess whatever the going market rate is for such an item. You don't even have to sell it, trade it or anything. Just acquiring it creates a liability.

Anyone else think this is really, really weird? Next we'll have virtual property tax or virtual real estate tax. If you have to pay taxes on virtual property, can you insure your virtual property?

Last December a Beijing court ordered the restitution of one player's stolen virtual weapons. Given that the U.S. takes a much stronger stance on the idea of property than the People's Republic, it's not hard to imagine such claims reaching American shores -- and soon.

Then we can start taxing basketball players for making game-winning plays and American Idol contestants for making it to "Hollywood."


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