Johnny BeBarter
Jul 23, 2009
4 Comments
Last night, we continued through our DVD queue by watching Johnny Belinda, a 1948 movie for which Jane Wyman won an Academy Award. Wyman plays a young deaf and dumb (dated movie, eh?) woman who finds a doctor that brings out her potential, only for her to be attacked by the town drunk, has a child, and becomes the village pariah and scandal. But one of the subplots grabbed my attention: Lew Ayers’ character, the doctor, is burning bridges in the town by not always accepting bartered goods for his services.
We all learned about bartering in junior high social studies: trading goods and services for . . . goods and services. We heard about it again in the 1990s when Russia and some other former Soviet Bloc countries were in such bad economic shape that people would trade pipes for . . . plutonium?
But now there are some in the green community who are looking to barter as a way of building wealth. Instead of using cash, folks trade their goods, and receive needed goods, or credits. There are plenty of sites out there, and I’m getting my head wrapped around why this is slowly catching on. Some feel burned by Wall Street; others see it as a way of reducing the purchase of unwanted “stuff;” others want to liberate themselves from items they just don’t need; some see this as a way of building skills or getting services they couldn’t otherwise afford. Green Barter, based in Vermont, promotes itself by telling its customers that they can save cash, increase merchandise turnover, and find a creative way to increase their customer base.
So pay attention in your local communities: during these tough economic times, it could be a way to get tasks around the house done, or getting goods and services your business may not be able to afford. Whether this will be scaled and have any economic impact, however, is another story. 
When you barter, you are engaging in a commercial transaction and sales, income and other taxes may apply. So it would be interesting to see how these barter sites and communities deal with this tax issue. By not paying cash for a good or service, and then not paying tax on your purchase, the local, state and federal governments are not receiving some of the tax revenue they otherwise planned on getting. So, while consumers may be getting a good deal by bartering in this fashion, the governments would not. Of course, they can always use their tax agencies to audit these barter sites and communities.
Thank you, Ara! I guess this is why we shouldn’t go to Wikipedia for tax advice–I had a different impression from the cursory research I had done.
All barter companies (Trade Exchanges) are regulated by IRS and are required by law to report all sales to IRS each year. The law says if you barter for personal use it is not taxable. But if you trade $1.00 for business it’s treated the same as a cash sale. This way we work with IRS and have no problems with IRS.
Thank you, Debbie, for the clarification. I have a feeling this will catch on, even in large cities, if this credit crunch continues!
LK
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