Reuters/Second Life - US Congress launches probe into virtual economies
“You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there’s no mechanism by which you’re taxed on this stuff”
It seems that the US Government now wants to tax goods and services bought within Second Life and World of Warcraft. This enters us into a very interesting subject. Disregard the obvious question of whether or not this is constitutional, it’s probably not. The real question here is how would the IRS have the right to tax something they don’t even own? This is still a very premature subject and the investigation into whether or not they think they can do this hasn’t even begun yet.
Linden Lab’s Wikipedia entry says they’re based in San Francisco, but if they were to transfer the company to a different country, would that not completely remove the entire system from any US jurisdiction? I’m nowhere near anyone’s definition of a tax lawyer, but it’ll be interesting to see how this pans out.
You can download a PDF released by the Joint Economic Committee of the US Congress here.
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