The U.S. to Introduce an R&D Tax Credit... Excluding "Violent Video Games" Developers

[Foxi4]

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The U.S. House of Representatives' Ways and Means Committee tackled the tax code and plans to introduce a permanent R&D tax credit as an industry incentive. The lawmakers believe that this new bill is "finally giving American manufacturers the certainty they need to compete against their foreign competition who have long had permanent R&D incentives". This tax credit also concerns video game developers... but not all of them.​

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Page 24 specifically exempts developers of "violent video games" from taking advantage of this new legislature. The Washington Examiner points out that practically this means that for example Electronic Arts, the developers behind non-violent games like "The Sims" or "FIFA" would not receive the credit since they're also developing "Battlefield" games.​

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Paradoxically, the very same bill criticizes the current tax code stating that it "has been riddled with lobbyist loopholes that pick winners and losers based on what favors Washington was handing out". While the bill does not give incentives to specific fields of the industry to pander to them, doing the exact opposite and choosing not to give credits to others is just a different way of looking at a half-empty glass... or is it half full? They're not breaking new grounds here - it's still picking winners and losers, just the other way around.​

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What is your take on the matter? Do you think that such incentives are a good way to stimulate the market? Do you think that the Committee is right in singling out developers of "violent video games"? Discuss, for there are only two things certain in life - death and taxes.​

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Source (ReviewTechUSA)​

Source (IGN News)​

Source (The Washington Examiner) ​

Source (The House of Representatives' Committee on Ways and Means Website)

 

[Qtis]

FlappyBird innovation of the year 2014, let the tax refunds begin!

 

[Snailface]

But the kids want violent video games.

And that's why this sin-taxed legislation is essentially meaningless (to violent games) in the long run. The higher sales that violent games garner more than offsets lack of funding from the Gov.

Nothing to fear bloodthirsty tempers. ;p

 

[trumpet-205]

Seriously, when will US adopt flat tax? US tax code is a complete mess.

This tax credit is just going to open even more tax loopholes.

 

[Foxi4]

Seriously, when will US adopt flat tax? US tax code is a complete mess.

This tax credit is just going to open even more tax loopholes.

They're actually flattening it, more or less. The current rates are collapsed into 10% or 25% on "virtually all taxable income", 25% for production income and 35% for "other income", see page 14 of the bill.

 

[NakedFaerie]

All that will do is move those violent game devs to other countries just like Australia did.

 

[Celice]

I don't think videogame developers in general often qualify as being parts of R&D for a greater national picture. But the pigeonholing of "violent videogames" is a really sad attempt at politics and blind tradition, just as the belief that children and women are somehow more vulnerable than men in regards to ideas and emotions.

 

[Gahars]

IT KEEPS HAPPENING

That's just goofy. Film subsidies never, as far as I know anyway, hold any restriction based on "violent" content. What, is The Godfather any less art because of all the whackings?

 

[Foxi4]

I don't think videogame developers in general often qualify as being parts of R&D for a greater national picture. But the pigeonholing of "violent videogames" is a really sad attempt at politics and blind tradition, just as the belief that children and women are somehow more vulnerable than men in regards to ideas and emotions.

It's my understanding that the credit refers to company-oriented R&D, it's supposed to incentivise business growth and expansion.

As for your other point, it depends on how you look at it and which emotions we're talking about and what's their relation to hormonal levels - for example, women produce more prolactine (the "crying" hormone more notably known for its role in enabling the production of milk) and are more prone to the ill effects of corticoliberin (the stress hormone) to which men show an apparent immunity. That being said, for reasons that are unclear, men are strongly affected by the "quality" of the relationship they're in and are more prone to emotional responses when their significant other is concerned wheras women only seem to be emotional depending on the relationship's "status" - whether they're in one or not. As for the children, sometimes their stronger responses are possibly connected to the fact that they simply have less experience and often times don't what to make of a given situation and this lack of experience can prove to be emotionally scarring when a new negative experience imprints itself on the psyche. Of course this is all purely theoretical and entirely off-topic, I just found your response interesting since it tackled the subject.

IT KEEPS HAPPENING

That's just goofy. Film subsidies never, as far as I know anyway, hold any restriction based on "violent" content. What, is The Godfather any less art because of all the whackings?

That's another thing that has me boggled as well - creators of any other violent media are not exempted from the credit - it's only video game developers. Essentially you could film a movie consisting exclusively of grusome death scenes and you would still be eligible for the tax credit.

 

[DJPlace]

if i have to pay taxes on M rated PSN digital games well FUCK YOU BROCK OBAMA!! i'm glad in two years you ass is out!!

 

[NakedFaerie]

I think we need 1 rating system. Games and movies are all entertaining so they should have the same system. How can a movie like SAW and Hostel get approved but a game like South Park get censored?
I thought you would ban more real life things than cartoon things.
So the more fake it looks the more chance of it getting censored but the more real it is the more its approved? Doesn't make any sense to me.

 

[SS4]

Sweet, more money taken from the working class going to rich ppl and businesses that reallllllyyy needs it . . . .
If multi billion dollar company and rich ppl paid taxes like we do they could just lower the rates by imposing a flat % payment that everyone has to make and it would be fair and will end in even more money being collected than now . . .
Sry a bit off topic, but that sux for small companies working on only one game since they have to make sure its non violent and small businesses already have it rough enough as it is . . . thx for mining creativity to some extent with this stupid law lol

 

[calmwaters]

Foxi4, there's an extra "i" between the "t" and the "e" in committee. It looks like it's Google's fault. Anyway, they'll be giving a tax credit to companies like Nintendo because they don't create violent games? I'm pretty sure the standards for violence are reflected in the rating system called the ESRB. Game companies don't exclusively make games that are rated T and M (I think; I don't keep tabs on stuff like that); but they wouldn't get the tax credit for making those. They would get the tax credit for making games E or E10+. (EC is just plain stupid)

 

[drakorex]

if i have to pay taxes on M rated PSN digital games well FUCK YOU BROCK OBAMA!! i'm glad in two years you ass is out!!

 

[Arras]

if i have to pay taxes on M rated PSN digital games well FUCK YOU BROCK OBAMA!! i'm glad in two years you ass is out!!

No, this is A. for developers, not consumers and B. if said developer makes ANY "violent" game, that affects the entire developer, even if they also make non-violent games.

 

[FAST6191]

What a time to be an accountant.

Wonder if it will end up as complex as some of the pharma stuff has got, which, somewhat amusingly, already farms out a lot of its R&D work owing to the tax situation.

 

[Cyan]

what do they define as violent?
Mario stepping on mushroom and killing turtles?
Smash bros fighters?
poor innocent pikmins being eaten by aggressive monsters?


or just "if you see blood it's violent?".

 

[Foxi4]

Foxi4, there's an extra "i" between the "t" and the "e" in committee.

My bad, corrected.

It looks like it's Google's fault. Anyway, they'll be giving a tax credit to companies like Nintendo because they don't create violent games?

Metroid Prime.

I'm pretty sure the standards for violence are reflected in the rating system called the ESRB. Game companies don't exclusively make games that are rated T and M (I think; I don't keep tabs on stuff like that); but they wouldn't get the tax credit for making those. They would get the tax credit for making games E or E10+. (EC is just plain stupid)

Of course. Developers release all sorts of games, they're not categorized on the basis of "violence" 9 out of 10 times. All it takes is one "violent" game in your yearly roster and the credit's gone.

what do they define as violent?
Mario stepping on mushroom and killing turtles?
Smash bros fighters?
poor innocent pikmins being eaten by aggressive monsters?

or just "if you see blood it's violent?".

I think it's covered by the ESRB. I quote:

Violence - Scenes involving aggressive conflict. May contain bloodless dismemberment
Violent References - References to violent acts.

A bit broad, but hey.

 

[MaxxJag]

I think the definition is too broad. Two oldies that wouldn't pass for example. Duck hunt and Mario Bros. So much violence...
Unless you make only Barby and Branded Kid show games, you're SOL on the credit. Even The Sims and FIFA have some level of violence.

 

[Foxi4]

I think the definition is too broad. Two oldies that wouldn't pass for example. Duck hunt and Mario Bros. So much violence...
Unless you make only Barby and Branded Kid show games, you're SOL on the credit. Even The Sims and FIFA have some level of violence.

That's mild/cartoon violence, I don't think it would be covered by the legislature. I assume that they mean "violence" of between T and A-O levels.