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Mojang (the developer of Minecraft) has recently stated that server owners may charge users access to their server, so I know they allow it (source). My only question is whether I need a business license to charge users access. Do I need to pay taxes on this as well? Even with my highest estimates, I would probably make less than $300/yr on this. The plan is simply to cover my costs of hosting it.

I'm located in California.

Users would pay me via PayPal (using BuyCraft's plugin or something similar to automate it).

Also, I have users that help me manage the server (ie. "staff"). The plan is to trade them free access in exchange for their help (banning abusive players, etc). Would I be able to do this?

kylesureline
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Re the business license - in California business licenses are given by the municipal/county governments, so you'll have to check that with your city hall or county office.

Re taxes - yes, you'll have to pay taxes, as with any income. Services are considered "imputed income", and generally you'd recognize income to the extent they would be paying had they been paying the full price (or the actual cost of services provided, if more).

Since this is a hobby and not a for-profit enterprise, your deductions may be limited by the actual income and the 2% AGI threshold. See more here.

littleadv
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