Proposed tax reform would withhold credit from 'violent video game' makers

By Steve Watts, Feb 28, 2014 7:00am PST

A tax reform proposal unveiled this week suggests giving research and development tax credits for companies, but also says the R&D credit should be withheld from makers of violent video games. Like many we've seen at state levels, the "Tax Reform Act of 2014" proposed by the House Ways and Means Committee doesn't specify what criteria it will use to determine violence in games.

GameSpot reports that the tax credit is meant to give companies a leg-up in competing with foreign competition with their own R&D incentives, according to Rep. Dave Camp (R-MI). But a list of loophole closures that begins on page 23 of the bill specifically prevents violent video game makers from qualifying for the R&D credit. The rest of the loophole closure efforts seem to be for loopholes caused by the current tax code, leaving the video game industry isolated in the R&D exemption.

House Speaker John Boehner (R-OH) has said that Congress isn't likely to reform the tax code this year, so this exact iteration of this bill might not ever go to a vote.

In 2011, the Supreme Court ruled that video games are entitled to first amendment protection, following a case in which California tried to ban the sale of violent games to minors. That ruling has apparently had a freezing effect on other states attempting similar legislation, but the US Congress imposing such a targeted restriction in the tax code would likely require its own court battle to undo.

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