Could South Dakota Proposal Tax Downloadable Content?
Could South Dakota Proposal Tax Downloadable Content?
January 15, 2008
Could that Bioshock theme pack you purchased on Xbox Live be taxable? What about that World of Warcraft gold you surreptitiously bought from an overseas farming operation?Good questions. A proposal before the South Dakota legislature could make such downloadable items subject to the same state sales tax that is levied on tangible goods. HB 1017 calls for:
...a tax at the same rate as that imposed upon sales of tangible personal property in this state upon the gross receipts of all sales, leases, or rentals of any product transferred electronically.
The Hog House Blog, which tracks South Dakota politics, is puzzled by the proposal:
The bill talks about taxing “products transferred electronically.” My first thought was, seriously, all those online video game extras that people actually pay cash money to obtain.
And then I wondered about online advertising. A closer reading of the bill hints that it might be Internet service itself, as there are references to “communications...”
No individual legislator is credited with proposing HB 1017. A notation reads that its was "introduced by: the Committee on Taxation at the request of the Department of Revenue and Regulation."
In other words, South Dakota bureaucrats are eyeing all that potential tax money from online transactions, and they want a slice. And if the taxman in Pierre is thinking about taxing DLC, can his counterparts in Sacramento, Albany and other state capitals be far behind?
Of course, we don't mean to single out Xbox Live in relation to this proposal. There are numerous instances of digital downloads and in-game item transfers taking place in game venues of all sorts.
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Posted 10/15/08 at 04:11pm
Mnementh2230: Just heard on NPR a little bit ago about Obama putting his ads in games. Good article!
Mnementh2230: Just heard on NPR a little bit ago about Obama putting his ads in games. Good article!
Posted 10/15/08 at 03:30pm
ezbiker555: JT screws up again, check the forum on his thread on page 23
ezbiker555: JT screws up again, check the forum on his thread on page 23
Posted 10/15/08 at 03:11pm
E. Zachary Knight: The box doesn't have to. The game and the CEO have already said it.
E. Zachary Knight: The box doesn't have to. The game and the CEO have already said it.
Posted 10/15/08 at 03:07pm
GoodRobotUs: Justr try selling it second hand ;)
GoodRobotUs: Justr try selling it second hand ;)
Posted 10/15/08 at 03:00pm
insanejedi: I'm not sure if the box on my copy of Dead Space or Mass Effect says your a theif.
insanejedi: I'm not sure if the box on my copy of Dead Space or Mass Effect says your a theif.
Posted 10/15/08 at 02:48pm
ezbiker555: Hey EZK, have you seen the uncylopedia article on jt, its hallirous!
ezbiker555: Hey EZK, have you seen the uncylopedia article on jt, its hallirous!
Posted 10/15/08 at 02:42pm
E. Zachary Knight: insanejedi: I guess their alright if you like being openly called and treated like a thief and a moron.
E. Zachary Knight: insanejedi: I guess their alright if you like being openly called and treated like a thief and a moron.
Posted 10/15/08 at 02:41pm
GTCv Deimos: In regards to FS2, I'm hoping that interplay's ressurection will cause them to hire volition for FS3... cuz WHAT A CLIFFHANGER!!
GTCv Deimos: In regards to FS2, I'm hoping that interplay's ressurection will cause them to hire volition for FS3... cuz WHAT A CLIFFHANGER!!
Posted 10/15/08 at 02:40pm
GTCv Deimos: @phalanx, but if you gets something crummy, and immediately resell it, you can get a good $40 for it. see: assassin's creed
GTCv Deimos: @phalanx, but if you gets something crummy, and immediately resell it, you can get a good $40 for it. see: assassin's creed
Posted 10/15/08 at 02:39pm
GTCv Deimos: @goodrobot: you called it. Still a fav to this day. Also was a convenient XBL tag
GTCv Deimos: @goodrobot: you called it. Still a fav to this day. Also was a convenient XBL tag
Posted 10/15/08 at 02:34pm
Spartan: Yes we do since EA treats customers like thieves and considers them morons in general and let's not even talk about customer support.
Spartan: Yes we do since EA treats customers like thieves and considers them morons in general and let's not even talk about customer support.
Posted 10/15/08 at 02:27pm
insanejedi: Do all of you have an axe to grind with EA?
insanejedi: Do all of you have an axe to grind with EA?
Posted 10/15/08 at 02:17pm
GoodRobotUs: Though, in all fairness, I doubt much of the original team remains
GoodRobotUs: Though, in all fairness, I doubt much of the original team remains
Posted 10/15/08 at 02:16pm
GoodRobotUs: Well, the company that actually wrote it was Volition, of current Saints Row 2 fame ;)
GoodRobotUs: Well, the company that actually wrote it was Volition, of current Saints Row 2 fame ;)
Posted 10/15/08 at 02:12pm
ShadowDragon28: FS2 is easily one of the best Space Sims of all time. Too bad it got too little exposure and the developer went under.
ShadowDragon28: FS2 is easily one of the best Space Sims of all time. Too bad it got too little exposure and the developer went under.
Posted 10/15/08 at 02:06pm
GoodRobotUs: It's a swine to install, but worth the effort ;)
GoodRobotUs: It's a swine to install, but worth the effort ;)
Posted 10/15/08 at 02:06pm
GoodRobotUs: http://scp.indiegames.us/screenshots.php?gallery=MediaVP
GoodRobotUs: http://scp.indiegames.us/screenshots.php?gallery=MediaVP
Posted 10/15/08 at 02:05pm
GoodRobotUs: @Brokenscope - Have you tried the Source Code Project for Freespace 2?
GoodRobotUs: @Brokenscope - Have you tried the Source Code Project for Freespace 2?
Posted 10/15/08 at 01:58pm
Brokenscope: See, everytime I see his name, I go find my old FS2 disks, and play away.
Brokenscope: See, everytime I see his name, I go find my old FS2 disks, and play away.
Posted 10/15/08 at 01:53pm
GoodRobotUs: GTCv Deimos - You have GOT to be a FS2 fan ;)
GoodRobotUs: GTCv Deimos - You have GOT to be a FS2 fan ;)
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Game Politics and Game Politics logo are trademarks of the ECA.
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Comments
That is just plain insane, I would consider it a rights violation
/b
It isn't like the stuff on there isn't expensive for what you are getting anyway...
I wonder how they plan to regulate this.
My thoughts exactly. I THINK (my xbox isn't handy) that if you buy the points online, they aren't taxed. But if you buy them in a store, they are?
But, at the same time, it would be hilarious if, on top of taxing the purchase of POINTS, the state tried to tax your use of the points. Example: Live Arcade game: 400 points. State tax: 28 points. :)
So, once the state collects those taxed points... what do they do with them?
Broken News:
Faux News reports the state has collected over the past year 5 million Microsoft Points. The state is trying to encourage banks to trade in Microsoft Points so they can actually DO something with them. But bankers are laughing in their faces, saying "next you'll want to trade in WoW gold!"
This has been a Faux News report.
Back in reality, let's not forget services such as Netflix and Amazon which offer live streaming videos for rent or purchase, Napster and the like, and... OMG! PORN SITES!
Nightwng2000
NW2K Software
Nightwng2000
NW2K Software
I know that Wii Points are taxed if you buy them in store, but tax free when purchased online.
But how do they plan on overseeing all this? That is the real question.
this is a bit too much for me right now the idea seems quite surreal. maybe the idea came from a bunch of pregnant scholar's (that list one is a antiquated insult that means "One who was drunk by the middle of the morning" --Morris Marples's University Slang, 1950)
ps I have a deck of old insult cards and the one above the insult i used is Crotcheteer = One who fixes the mind too exclusively on one subject. One given to some favorite crotchet, or hobby. -- Daniel Lyons's Dictionary of the English Language, 1897
the one for he who should not be named is..... zounderkite.
Let's pretend that EBay is based in South Dakota. Would they tax people in Montana or Florida that bought merchandise off EBay? Could they do that? What if the seller lives in Oklahoma? Would he be taxed in South Dakota? What if the buyer/seller lived in England? Would they be taxed by a foreign government? The whole taxation without representation thing makes me wonder.
Can they even tax software? Would they tax you for downloading the latest update on WoW? If so, would they tax a website like Myspace that's based in South Dakota? What about its users? If they open the door to allow them to tax the internet, would they tax me for viewing this website?
If they answer yes to these questions, they will kill the internet in South Dakota. Any servers in the state will shut down or move out of the state. Citizens who rely on the internet for work may move. Companies may refuse to sell over the internet in South Dakota. This is just another entry in the long, sad history of bad ideas.
Yeah, but I'd rather not buy a license for my music/movies/games. I just want to buy the freakin' game.
Some ISP's already charge for the amount of data transfered, but taxing it is just absurd. Would South Dakota be able to tax data entering/leaving the state was well? Hmm.... All in all this is just a tax made by those who really know nothing about TEH INTERWEBS! (Imagine if they charged us per byte of data.... *screams*)
This government - we have now, has more or less singlehandedly torn this nation up.
Question: How do they plan to enforce this?
If you can't manage your money in the first place the only thing getting more money is going to do is allow you to miss use more of it.
Also, Wikipedia says MS factor in sales tax on points sold online in New York.
/b
"Correct me if I’m wrong, but we already pay tax when we purchase Microsoft Points or Wii Points online, at least here in Canada. Doesn’t that mean we’d be getting doubly taxed? There’s no way this would fly."
Are you being charged PST or GST? GST is applicable to all Canadian accounts, because it's federal, but PST is trickier, because they'd have to prove which province you were in.
And on the issue of an American Federal sales tax:
It's a horrible idea, but some of the Republican presidential candidates are championing the idea of getting rid of the income tax and replacing it with a federal sales tax.
Sales tax is traditionally (read ALWAYS) collected from the seller. The seller collects the sales tax from the buyer at the point of purchase. I'm really curious how the SD lawmakers plan on collecting from an online retailer based in, say Wyoming (it could happen!), when there is no legal reason for that retailer to pay, and no legal reason for that retailer to even divulge that someone in SD purchased anything from them.
This is election-year pooh-pah being batted around by sub-par politicians in an effort to be able to say, "See, I did something progressive for the state by proposing legislation that would have filled our state coffers without costing us a dime!" It doesn't matter that what they proposed is illegal, or at best unenforceable. SD residents, if I were you, I'd be offended that your politicians think so little of your intelligence.
this idea fails, imho.
I'm not sure how the SD law will play out... the Minnesota law works just fine
That means that the guberment now has a stake in virtual fraud. The next time the police tell me that won't investigate the theft of virtual items I can say "Virtual? I paid taxes on that buddy! The government doesn't tax Virtual items." I could sue the police and the state government for failing to protect me against fraud! I imagine they're going to be spending far more than this tax earns them trying to police this stuff.
I'm thinking maybe...1000 percent tax rate?
That'd be nice.
I feel that the folks of South Dakota should all get together, dress up like native americans, and then toss all the Wii and MS Points they can get into the biggest lake they can find. We could call it the South Dakota Points Party! Uh... err... ok, maybe not.
"No Tax or Duty shall be laid on Articles exported from any State." -- Article 1, Section 9
That's going WAY out on a limb.
all they can do is tax the online purchase of said points, and since Nintendo and Microsoft are based outside of South Dakota, the tax can't apply.
The only thing they can tax is internet service, since the ISPs have offices in North Dakota.
Is this just a Canadian thing? What's going on?
I don't know too much about Canadian law, sorry. All I know is that taxing out-of-state goods is unconstitutional over here. Hell, I don't even know if your justices can strike down laws.
Overcast: While it's true Legislators and even state and national Executives seem to screw up on the Law of the Land a lot, all it takes is a few sane judges for dumb laws to be thrown out. Thankfully, it happens all of the time. I always found it ironic that the people who best uphold the freedom in our Democratic Republic is the one branch of government filled only with unelected officials. (on the national level anyways)
I HIGHLY doubt that they'll be able to tax you for using MS points, that would be like taxing someone for using a gift card.
I think the tax only applies to people who live in south dakota.
Why, oh why, does this strike me like the Gov is trying to act like the freaking mafia? I mean, when I was reading this article and my dad was watching the godfather in the next room, I almost started to see a connection.
Gov- "This is the business we have chosen... and that business is the video game business, and we will tax said chosen business." *Godfather Theme*
Is this just a Canadian thing? What’s going on?"
Wtf really?
That's not right.
either way... this is completly against the setups in the ecomony both online and offline