Yale Law Journal, Pocket Part, Vol. 118, p. 136, 2009
7 Pages Posted: 26 Feb 2009 Last revised: 18 Oct 2015
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.
Keywords: Virtual worlds, MMORPG, Second Life, World of Warcraft, eBay, PayPal, taxation
JEL Classification: H20, H23, H24, K34, O33, O38
Suggested Citation: Suggested Citation
Lederman, Leandra, EBay's Second Life: When Should Virtual Earnings Bear Real Taxes?. Yale Law Journal, Pocket Part, Vol. 118, p. 136, 2009; Indiana Legal Studies Research Paper No. 124. Available at SSRN: https://ssrn.com/abstract=1339568