Let's talk about Linden Lab's Second Life. And no, we're not going to talk about tweaks on the game's Terms of Service or even the IRS's plans to tax online game loots. You all know what happens when those things are discussed - headaches, heartaches, whatnots. The day just started for us here and a lot has happened already.

Anyway, did you know that you can purchase a Toyota Scion xD for only one US dollar, albeit virtually? The car manufacturer recently launched the car for the above mentioned price which translates to 300 Linden dollars. If you are an SL resident, all you have to do is go to Scion City and and log into one of the various kiosks located there.

Despite the new marketing strategy, Scion's Interactive Marketing Manager Adrian Si mentioned that this isn't a direct money-making venture for the company. He explained that Toyota is just keeping pace with the changing times:

We developed Scion City to connect with the trendsetters. That's our target demographic - people who do things first. Trendsetters are instrumental in promoting brands. We don't want to necessarily sell them Scions. We want them to get to know our brand, and hopefully consider something in the Toyota family because they like who we are.

Furthermore, the virtual Scions can be customized using real-world accessories. Take for example the car's audio system. SL residents can plug in MP3 CDs as well as their iPod for their listening pleasure. Likewise, an optional feature allows downloading of images and video clips.

If you think that the U.S.A.'s IRS is the only one planning on imposing taxes on online game loots, think again. Other countries like Sweden are following suit. Swedes who earn tax-free money from playing World of Warcraft and Second Life would have to think twice about their activities as their government said that they were planning a clampdown.

Dag Hardysson, head of the Internet trade division of the Swedish tax authority, said that they "are not interested in ordinary gamers - 99 per cent of them play for the sake of playing...Most people play and keep their money on their game account, but if they move it out of the virtual world into the real world, then we're interested in them."

He cited a couple of examples: a WoW player who advances to a higher level and earned a virtual weapon, which he then sold to another player for real money; and a fashion designer in Second Life who sells clothes in both the real and virtual worlds. But in spite of all the strong words, Hardysson mentioned that he would not expect players to actually have to pay taxes for another two to three years.

Sometime in the next few months, the Joint Economic Committee of Congress will publish the results of an ongoing investigation into the economies of World of Warcraft, Second Life, and other massively multiplayer online games.

What does this have to do with gamers? Well, this report could quite possibly determine whether or not the virtual gold that millions of online gamers earn and spend each day will incur real-world taxes.

A PC World article that we read today pegs the exchange rate for one gold piece in WoW at an unofficial rate of seven to the U.S. dollar. Second Life, on the other hand, actively encourages a real-world type of economy with an official market-driven rate of roughly 50 cents per 100 Linden dollars. Most game companies - and gamers - frown on buying gold from gold farmers, but when there's an easy way to get your hands on stuff, people will be sure to flock to it.

So if the report comes out on the side of the IRS and virtual loot is deemed to have real value since it can be sold for real money, will we be seeing the government concluding that every time a fallen virtual monster gives up its prize a taxable event has occurred? Click on the "read" link below to read the full story at PC World.

In this world, nothing is certain but death and taxes; and maybe that's one of the reasons why the IRS is paying more attention to MMORPGs nowadays. The success of MMORPGs like World of Warcraft, Second Life, and Guild Wars among many others, was one of the reasons why a congressional Joint Economic Committee is looking at possible ways for the Internal Revenue Service to get involved in the virtual life business.

Although this isn't the first time that MMOs faced this issue, this latest inquiry originated from senior economist Dan Miller, who also happens to be affiliated with the mentioned economic committee. Taxing real money from MMOs sprouted from his head while he was passing the time away playing a particular MMORPG. He mentions that "right now we're at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise—taxes, barter exchanges, property and wealth." With that, we should just hope that they get stuck in the preliminary stages.

That's why it isn't surprising for MMOs like Second Life to be under the microscope. The game has it's own economy with the Linden Dollars (L$) as their official currency - Linden bucks could easily be converted to real US dollars, and it won't be surprising if users would choose to earn some real dough through their virtual activities.

Some game devs have accepted the fact that taxation is looming in the horizons. Star Wars Galaxies developer Sam Lewis shares that "ownership, property rights, all that stuff needs to be decided. There's just too much money floating around...The tax laws don't know how to behave because these are virtual items: ones and zeros on a database we're allowing you to play in." Well what can we say, death and taxes - there's never any convenient time for either one of them.