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Proposed tax on mature video games in Pennsylvanya

GamingLawPills No. 32 brings news on the proposed tax bill on mature video games in Pennsylvania, its potential impact on the market and the reaction of the industry.

Pennsylvania’s “Sin Tax” on mature video games

Pennsylvania lawmakers have introduced a bill that seeks to institute a 10% tax on mature-rated video games sold in the state. The money would go into a fund called the “Digital Protection for School Safety Account” that aims to enhance security measures at schools.

A “sin tax” is an excise tax on socially harmful goods such as alcohol, tobacco, gambling, pornography. The objectives of the tax are to discourage users from purchasing items by making them cost prohibitive and using the proceeds to fund the treatment of the public health costs.

Representative Christopher B. Quinn, who introduced a version of the bill in 2018, suggests exposure to violent video games as a potential cause for recent trends of increased violence in schools:

One factor that may be contributing to the rise in, and intensity of, school violence is the material kids see, and act out, in video games.

How do you qualify a videogame as mature?

Interestingly, this would put the non-government board that rates video games named the Entertainment Software Rating Board (“ESRB”) in a position to determine which games would be charged with the mature video game tax in Pennsylvania. The ESRB is responsible for putting ratings on each game that releases, though ratings are currently suggestions and not legally enforceable.

The bill seems to indicate that the tax would only be applied on retail sales, so increasing the attractiveness of the digital market for gamers in the state.

The reaction from the gaming industry to sin tax on video games

The Entertainment Software Association opposed the bill since it is no proved that violent video games are linked to the aggressive behaviour of young people. From a legal standpoint, it has been also highlighted that:

The U.S. Supreme Court made clear in Brown v. Entertainment Merchants Association & Entertainment Software Association that video games are entitled to the full protection of the Constitution, and that efforts, like Pennsylvania’s, to single out video games based on their content will be struck down.

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Vincenzo Giuffré

Trainee Lawyer at DLA Piper IPT Italy, Milan| Graduated Student at Bocconi University: Major Business Law School | Exchange Program at University of Minnesota - W. Mondale Law School | Visiting Student at National University of Singapore (NUS)

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