American tax

I'm in PA (Pennsylvania). So I only pay a tax USD that I "cash out" of SL. Declared as "income tax" here in the USA.

Taxes on various goods and services varies from State to State within the USA. Some States do not tax food items (for example), while others have a flat tax on all purchases.

To my knowledge, there is no CA (California) tax on internet services. Due to the increasing focal point on Virtual Economies, I expect this to change in the very near future. Though at that point, it will need to be decided how the tax is counted. By the State in which the service provider resides (LL in CA), or by the individual States/Countries in which the users reside.

YAY for politicians!!

Politics: From the Latin word "poly"; meaning-many, and the word "tick"; meaning-blood sucking parisite.

~Jessy

Just as long as your politicians suck american corpuscles and leave it up to european ones to predate on us......

In the U.S., sales tax almost universally applies to goods, not services, and usually is not crged on food, clothing, drugs, and a long list of other items everyone needs to buy in order to get by, in order to reduce the tax burden on those struggling to get by (seniors on fixed incomes and the poor).

It is also not generally taxed on services for historical reasons; the U.S. was an agricultural and manufacturing economy for most of its life and is only recently primarily a service economy. Attempts to tax services have been pretty much shot down, because then lawyers, bankers, investment and capital services, and so forth - the ones with the most political influence - are against it, for obvious reasons.

There is no national sales tax, only states and lower levels of government charge sales tax. A company doing business in California must charge state sales tax to anyone buying their products in California, and if a resident of Minnesota takes a vacation in California that Minnesotan must pay sales taxes in California. But when the Minnesotan returns home and orders something from a California company over the phone or online, they pay no sales tax because they are not a California resident. I suspect attempts to change this have also been stymied for similar reasons as the tax on services - political influence. Its pretty easy for a company to incorporate in Delaware (with minimal if any taxes) and sell goods or services over the phone and end up paying no sales tax.

Companies charging sales tax have the indivual responsibility of reporting and paying the tax to the state they do business in, so effectively businesses are an arm of the government so far as collecting sales tax is concerned.

Most of the federal budget comes from income tax, I believe - and for most people, their employer is required to automatically deduct payroll taxes and send it on to the government. The self-employed are responsible for calculating and sending in their own income tax.

Its a pretty archaic and broken system, but the industries with a lot of political influence like broken systems, it makes it easier to game.

Oh, and any money you pull out of Second Life gets taxed as "Capital Gains" - currently 15 percent, as opposed to the average income tax of around 30 percent.

There is no "Internet tax", a moritorium on taxing the Internet has been passed twice now, on the argument that the Internet is still developing as a commercial channel and any premature taxing would stifle innovation. I suspect ... this moritorium will not get another pass...

I was asking about Capital gains the other day. Seems an odd way to do things. Hasn't this just changed to 18 percent or it's about to?

Could be, I'm not a tax professional, just a public radio geek that listens to the odd money program a couple times a week. Take everything I say here as basically 60/40 for accuracy...

The IRS is federal, and there is no federal sales tax in the US.

California has its own tax authority for state taxes, including the sales tax. It isn't a "loophole", but it's intended that the sales tax in CA does not apply to services -- so it doesn't apply to SL.

Now the US federal government passed a law several yers ago forbidding the states from taxing internet services -- so even if CA tried to tax SL, there wouldbe that federal prohibition to deal with.

So, at the end of the day, no, we don't have anything in the US like your VAT that is applying to these services, either in California or elsewhere.

I still say people should be paying income tax from money they draw from SL. But to charge people tax for their land tiers when we don't actually own anything here is hard to understand.

All I wanted to clear up Victoria was a story Id heard that those unfortunate of us to be within the grasp of the EUs grubby tentacles were also paying a US sales tax as well as VAT.

It seems to me though that not even some people in the US know quite who is paying what even within the USA itself.

It's a fair question on your part, but despite the confusion, you can rest assured that you are not paying any "embedded" sales tax in your tier. Any sales taxes we pay in the US are always "extra" beyond the marked price, except for a very small basket of goods which have supertaxes (petrol, alcohol, tobacco, etc.).

The confusion you see is because in the US the only people who would know what the tax laws of the various states are, are the people who live in those states and professional tax experts. We do not charge sales tax across state lines, so in the case of LL, the only relevant state is California, and therefore only California residents or a professional tax expert would know what California's tax position is vis-a-vis SL payments to LL.

Just echoing what others have siad. There is no Tax on Internet services here in the US, it is forbidden by a Federal Law,which is due to expire next month. Gasoline, Alcohol, Firearms a Tobacco are subject to Federal Tax built into the price. Sales tax is the domain of the individual States. Some , like Delaware have none. Here in New Jersey we generally have a 7% tax which is split between the State and the municipalities where it is paid. Clothing is non taxable as are most foods in the Supermarket. Within the state are Urban Enterprise Zones, where the Tax Rate is 3%. It will be interesting to see what will happen when the Internet Tax Law goes up for renewal, the States may be granted the right to charhge tax on an individual basis. Note also that State Sales tax is different from State (And City, in some cases) Income Tax, which again varies from State to State.

That's possible, but from what I have heard, very unlikely. The most likely outcome is an extension of the ban, from what I have heard.

I agrree, hopefully.