House Offers Proposal for Tax Credits for Business... Except 'Violent Video Game Makers'

February 27, 2014 - GamePolitics Staff

The House Ways and Means Committee released details on in its long-awaited tax reform bill, which offers a variety of tax benefits to businesses... while excluding video game makers from R&D tax credits, according to a Washington Examiner report. According to the paper, on page 19 of the Committee's executive summary for the proposed bill, an improved and permanent research and development tax credit is mentioned that targets a number of sectors including manufacturers, software creators, food producers, and more.

The summary calls for "an improved, permanent R&D tax credit, finally giving American manufacturers the certainty they need to compete against their foreign competition who have long had permanent R&D incentives."

So far, so good... but on page 24 of the same summary that the tax credit is specifically not available for "violent video game makers," offering a provision for "preventing makers of violent video games from qualifying for the R&D tax credit," while on the next page promising that the bill "stops the practice of using the tax code to pick winners and losers based on political power rather than economic merit."

The only good news about this proposed tax credit that excludes an entire industry? Speaker of the House John Boehner (R-Ohio) says it is unlikely that the bill will be taken up this legislative session.

Source: Washington Examiner


Comments

Re: House Offers Proposal for Tax Credits for Business... ...

As I've been reading elsewhere, people have pointed out that this is just so much posturing for the 2014 elections.  As one of my friends said, "The House GOP can't pass gas, much less a tax reform bill."

Re: House Offers Proposal for Tax Credits for Business... ...

I probably wouldn't have a problem with it, if they were to include movies, music, and other forms of art in with it.

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Re: House Offers Proposal for Tax Credits for Business... ...

Though I think another rather important question would be how artistic endeavors are getting "R&D" tax credits in the first place.

Re: House Offers Proposal for Tax Credits for Business... ...

These are technology tax credits. Video games are made with technology. That is how.

Re: House Offers Proposal for Tax Credits for Business... ...

This is what I was thinking too when I read it. If they're going to execute one form of "violent" media, they need to include ALL forms of it.

Re: House Offers Proposal for Tax Credits for Business... ...

So do they plan to strip tax breaks form studios who make violent movies too?

Re: House Offers Proposal for Tax Credits for Business... ...

So what is a violent game? If Your company makes a single "violent" game, do you lose the tax break permanently no matter how many "non-violent" games you make? 

Re: House Offers Proposal for Tax Credits for Business... ...

You have a point. What kind of violent videogames are we referring to here? Just mentioning violent games on their own is rather vague. Even if they had mention 'M rated games' it would have at least narrowed it down some. Are we talking 'Grand Theft Auto' violent? More than likely. However, I can mention plenty of non 'M-rated' games that can be violent. Mario and Link are both violent, and both are 'E rated' games. Would this mean that 'Nintendo of America' cannot get this tax credit?

 -W

Consumer responsibility is just as important as Corporate responsibility. So, be responsible consumers.

Re: House Offers Proposal for Tax Credits for Business... ...

I was able to track down the executive summary (located here) and the draft legislation (located here). From what I can tell, it looks like the "violent video games" thing is how they're spinning the elimination of any R&D tax credit whatsoever for computer software.

Under current legislation, the credit is only prohibited for software "developed by (or for the benefit of) the taxpayer primarily for internal use by the taxpayer", unless it's used in an activity or production process that would otherwise consitute qualified research. The proposed legislation would simply replace "Except to the extent provided in regulations, any research with respect to computer software [unless these conditions are met]" with "Any research with respect to computer software."

 
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