EBay's Second Life: When Should Virtual Earnings Bear Real Taxes?
Indiana University Maurer School of Law
Yale Law Journal, Pocket Part, Vol. 118, p. 136, 2009
Indiana Legal Studies Research Paper No. 124
Millions of people participate in virtual worlds. The popular virtual world Second Life is designed to be a platform for commerce. This essay argues that profits received in the form of Linden dollars (Second Life's currency) should be taxed in much the same way profits received via PayPal, a widely used electronic-payment system, are. Although Second Life profits could instead be taxed once the taxpayer cashes out, that would create a special exception for Second Life that does not exist for platforms such as eBay, which would facilitate abuse and distort economic activity.
Number of Pages in PDF File: 7
Keywords: Virtual worlds, MMORPG, Second Life, World of Warcraft, eBay, PayPal, taxation
JEL Classification: H20, H23, H24, K34, O33, O38
Date posted: February 26, 2009 ; Last revised: July 1, 2013
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