The IRS recognizes trade dollars as a legitimate form of currency. In 1982, Congress passed the Tax Equity Fiscal Responsibility Act (TEFRA), which recognizes trade exchanges as third party record keepers of transactions and stipulates that all trade revenue earned (sales made through the exchange) be treated as income and is taxable in the year in which products or services are sold. Exchanges file Form 1099–B, Proceeds from Broker and Barter Exchange Transactions, summarizing all member transactions within the calendar year. Accordingly, the exchange will issue a Form 1099–B for each member’s account, summarizing the value of all sales made through the exchange during the year. The IRS receives the same information.
At the exchange I run, BizXchange, we encourage our members to consult a CPA or tax professional to determine how to best record and account for trade business. Additional examples of bartering and information on how to report the income are described in IRS Publication 525, Taxable and Nontaxable Income.
How Printers Benefit from an Exchange
Benjamin Dwan of Minuteman Press in Seattle, WA, felt a little skeptical when he joined BizXchange in 2008. Within months he saw the value that the exchange added, as it became a great source of new business for his company.
Ben now accepts BizX dollars for printing jobs from other BizX members and these additional jobs help to keep his presses running at all times. As a result, Ben has been able to remodel his facility using services provided by other exchange members and he’s increased his cash flow by using the exchange to purchase everyday business items. In one year alone, he purchases more than $11,000 in ink and toner through the exchange.
Ben’s trade relationships have also enhanced his business, as his exchange customers often end up referring other cash customers.
Joining a trade exchange offers printers the ability to subsidize both fixed and variable operational costs, attract and maintain cash business, fund employee incentives or rewards programs, and raise capital for marketing or other costs.
The simple fact is that economic realities have made companies like BizX more mainstream. Exchanges are seeing strong growth each year and new exchanges are being launched every day. Companies are starting to see their trade exchange as another necessary business tool. If you’re not already an exchange member, I recommend exploring the opportunities wherever you do business.
Bob Bagga is the chief executive officer and president of BizXchange and is recognized internationally for his leadership in the exchange industry. BizX has offices in Seattle, San Francisco, and Dubai. Bob can be reached at email@example.com. More information is available at www.myprintresource.com/10645465.