The Dam has Broken for SL

Has it hit anyone yet?

With this act of banning virtual gaming involving L$ in its product Linden Labs has made a defacto admission that Linden Dollars are indeed a true currency. And, as such, L$ will shortly become subject to all income and taxing regulations regarding said “real world” currencies; throwing the door open wide to taxation and regulation by every country in the world.

They can no longer stand on the long held (and difficult to challenge) position that Linden Dollars are just cyber game licensed tokens and, in and of themselves, have no value.

The "dam" is broken; the flood is on the way. Watch as the “wave” washes away LL when it gets far enough down river.

By this one act LL has destroyed itself. It will just take a little bit of time for the "scavengers" that are the varied and numerous world government taxing entities to sniff out and devour the wounded carcass.

RIP SL

I doubt it. At the present time most incomes from SL business activites are so low that it wouldn't be worth their while. Specifically it would cost more in administrative expenses and staff wages than the pittance that could be collected through taxation. Now if General Motors sold their cars through SL it might be a very different story.

Or will we just be taxed and stay, until the next better performing, better managed virtual world comes along (which will be taxed as well)?

No they haven't. They've suggested it has value. My sofa has value. My antique vase has value. My collection of Folio Society books have value. But none are currency.

If you earn *any* real money from SL, you are *already* subject to taxation on it and should be declaring it to the taxman.

with the 100 threads about it couldn`t u just go whine in 1 of those instead of creating thread 10001?

time to ban talking about it aswell ffs

I would vote for this proposal if it was on JIRA. Pls submit.

My friend, you seriously underestimate the avarice of governments. Especially when they don't have to do any additional work other than that on paper. All the administration will be placed on the back of Linden Labs. Just as your local grocer is forced to collect and submit sales taxes.

"I doubt it. At the present time most incomes from SL business activites are so low that it wouldn't be worth their while. Specifically it would cost more in administrative expenses and staff wages that the pittance that could be collected through taxation. Now if General Motors sold their cars through SL it might be a very different story."

My friend, you seriously underestimate the avarice of governments. Especially when they don't have to do any additional work other than that on paper. All the administration will be placed on the back of Linden Labs. Just as your local grocer is forced to collect and submit sales taxes.

don`t get me tempted

And just HOW MANY of the SL business owners are paying US taxes??? Go ahead and flame me and assure me that you are one of the ones that does...if you are, my friend, you are one of the very few.

They HAVE admitted it has value....look at the articles about Ansche Chung being a millionaire...is this only in $L? Not according to all of the reports. If people like yourself are making enough money in $L to report income to the IRS, then value has been attached!

Just for fun, go read through the archive of this forum. For years, every update or policy change has sparked threads screaming OMG THIS WILL KILL SECOND LIFE!!!

OH NOES...

They haven't admitted it has value. They are still saying it's a digital credit.

And, I don't see sofas being used to make puchases. They are way to hard to fit in a wallet.

Well, I don't see sofas being used to make purchases. Besides, they are way to hard to fit in a wallet.

Digital credit? LOL. So does my credit card. Tomatoes / Tom-ah-toes.

You are missing the point. In law there is such a thing as "res ipsa loquitur", the thing speaks for itself. As long as "digital credits" can be converted to currency, it is the same.

Not until they are converted into currency. Whilst they are "digital credits" they have no value to anyone outside of Second Life. Is the tax man going to accept payment in L$?

I thought everyone paid their taxes. I don't see it as much of a problem.

Nobody pays taxes on L$.

They are the same as tokens, while they remain tokens they have no value. When you cash them out, if you made a profit, then they might be taxable. But since none of us work for LL, we are self employed. Since they do not direct our work in any way, it could be argued that they don't even have to issue 1099s.

I wouldn't be so sure of that.

The point I am trying to make is so very simple:

When you start giving in to vague rules and regulations (read laws here too) that may or may not actually apply to you, without the benefit of complete understanding or challange, you become a willing victim to anyone who even hints that something is a violation.

When you weaken one support the whole structure is weakened.

Tiny creatures called termites have caused more destruction in the world than all the major storms and large natural disasters throughout recorded history.

The act of capitulation without this clear understanding is a tasty wooden house set on top of a termite mound.

Wanna bet It only becomes taxable when you convert them to US dollars, which means they are no longer L$.

Well I'm not a US resident, so it would be very interesting if your government decided to tax me. I dare say it would cause considerable international friction if your government tried to tax people twice, particularly those who shouldn't be paying US taxes in the first place, which is why I can't see such a process working at Linden dollar level.
Yes, and I've admitted that my Folio Society books and have antique vase have value, but that doesn't make them a REAL currency, which was your original point.
No, that's in real US Dollars. Read the articles.
I never disputed that. I just disputed that the $L was a REAL currency - because it's absolutely not. Suggesting it's a real currency simply because it has real value is just not true.

Ummmm…..Yes it hit me about a year and a half ago, when I cashed my lindens out for the first time.

Taxes have always been required to be paid on any profit made from SL, if they apply where you live.

Whatever you spend in game is not income, its business expenses.

Whatever you spend in game is not income, its business expenses. Lindens are not taxable, yet, in my jurisdiction, only when converted to currency, but you should check with a Tax or legal professional in your area to make sure .

I would rather spend a few hundred a year in taxes than spend a few hundred in taxes PLUS a few hundred in legal, penalties and fees for not paying on time in the first place.

For now it’s on the honor system, but I wouldn’t be surprised to get a form 1099 (or its equivalent) from LL at some point in the future.
Of course later is better than sooner ……..

(Note to legal nitpickers; for SL, I use the cash method, and treat $L as a receivable. You might want to check first if you use the accrual method.)