The Congressional Joint Economic Committee has begun work on a framework for figuring whether and how to tax transactions involving virtual objects from video games and online worlds like Second Life and World of Warcraft. This issue was predicted with spooky clarity in Julian Dibbell's excellent Play Money.
"There is a concern that the IRS might step forward with regulations that start taxing transactions
that occur within virtual economies. This, I believe, would be a mistake," Chairman Jim Saxton
said today.In response to this concern, the staff of the Joint Economic Committee has begun an examination
of the public policy issues related to virtual economies. A virtual economy is defined as the
universe of transactions that occur within an online community, such as Second Life or World of
Warcraft. These transactions include the sale of goods and services and take place entirely
within virtual economies; there is no real-world or physical exchange. However, a real-world
value can often be assigned to such transactions using exchange rates or other methods.
Link, PDF link to Joint Economic Commitee release
(Thanks, Mobius!)
