Legal Niches

U.S. VAT Tax Would Affect Games, Systems, Online Fees (and everything else)

By gamepolitics

Suddenly, there's a good bit of discussion in Washington, D.C. about the possibility of a value-added tax, or VAT.

For the uninitiated, a VAT is essentially a national sales tax. As the Washington Post points out:

Common around the world, including in Europe, such a tax... has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity...

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything... But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American...

Should a VAT be enacted, it will tax every type of transaction involving a good or service. For gamers, that means disc-based and downloaded software, consoles, peripherals and even monthly fees for Xbox Live, Second Life and World of Warcraft.

The WaPo posits scenarios involving VATs ranging from 10-25% but concludes that a VAT is unlikely - for now.

Full post as published by GamePolitics.com on May 28, 2009 (boomark / email).