Skip to main content

See also:

Tax Reform Act of 2014 contains strange restriction for gaming industry

Tax reform could soon be making mess of the video game industry. As Eddie Makuch neatly explains in a Gamespot article, a provision of the Tax Reform Act of 2013 will prevent "makers of violent video games" from qualifying for tax credits for research and development.

Need more information? Too bad; that's all that is said. On page 24 of the Act's executive summary, it lists "Preventing makers of violent video games from qualifying for the R&D tax credit" amidst some otherwise sound ideas for getting rid of tax credits that several individuals and companies have been able to abuse in the past.

This is the only mention of video gaming in the Act, and it is both random and distressingly vague.

The main problem is that "violent" is undefined. What, exactly, will constitute a "violent" video game on these terms? Will Bethesda Softworks lose its tax credit because of "Fallout 3," despite making plenty of innocuous games in the past? What about the ESRB rating of "The Sims 3," which has "violence" right there on the label?

The second problem is that no other form of media that can contain violence had been singled out to stop receiving tax credits: no producers who make violent movies, channels that air violent shows or shops that sell violent books.

The real logistical problem here is the impact that hurting the video game industry could have on the economy. The gaming industry has experienced tremendous growth over the past few years, including during the recession, and continues to provide jobs. The World of Warcraft, Call of Duty and Grand Theft Auto franchises have brought in billions in revenue. Each.

The Act is still in draft form, however, and has yet to be passed.