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Tax expert: Lawmakers misjudge game industry’s importance in tax-credit bill

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One former adviser to the Senate Finance Committee believes that a GOP tax reform bill that would eliminate research and development tax incentives for developers who produce violent video games underestimates the importance and scope the industry has on the U.S. economy, according to a report today from GameSpot.

According to Dean Zerbe, a former Senate Finance Committee adviser and the managing director Houston-based tax consulting service Alliantgroup, said that those in Washington, D.C. don’t understand the economic impact games have on the industry as a whole.

"I think there is a real lack of understanding in Washington, D.C. of the economics of video games to the industry –– one video game can make far more than a summer blockbuster movie," Zerbe said.

One video game in particular did make more than a blockbuster movie, or any blockbuster movie ever made, as Grand Theft Auto 5 made more than $1 billion in its first three days after launch.

GTA 5 publisher Take-Two announced earlier this month that it had sold 32.5 million copies of the game since it s launch in September. You can read that full Examiner report by clicking here.

But if the Republican tax plan is to become law, the violent video game provisions could have not only have an obvious impact on violent video game publishers like Take-Two but also on industry giants like Electronic Arts and Nintendo, Zerbe said.

"The R&D tax credit is of significant importance to the gaming industry and especially video games. While the Ways and Means Committee talks about targeting violent video games, the reality is the language eliminates the R&D tax credit from all software –– a very real negative for everything from Google to Super Mario –– not just violent video games," Zerbe said. "Elimination of the R&D tax credit would be a real blow to the gaming industry in this country."

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