Congress Set To Issue Virtual Goods Taxation Report

The U.S. Congress is preparing to issue its report on the potential taxation of virtual items during the upcoming Congressional recess in July.

The contents of the report are unknown at this point, as the Joint Economic Committee investigating the matter has not issued any comments. However, Dan Miller, a senior economist with the committee, said, "Given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues. So it is incumbent on us to set the terms and the debate so we have a shaped tax policy toward virtual worlds and virtual economies in a favorable way."

The impact of the report will be significant: If Congress indicates an intention to begin taxing virtual commerce, publishers may be forced to develop methods to track each and every in-game trade for taxation purposes. Numerous questions about the nationality and location of the players and the games themselves will also be inevitable.