Growing Popularity of Barter Draws CA Tax Man's Attention

Next, they'll check under the sofa cushions


In one recent episode, professional traders Antonio Palazzola and Steve McHugh started with a beer-making kit, and through a series of transactions, ultimately walked away with a food truck.

"This is a cashless society, everybody's open to it, you just have to figure out why and how," McHugh told his hometown paper in an interview last year. "It's a great way to do things."

With a depressed economy, more people are giving up buying new in favor of trading what's old. The International Reciprocal Trade Association, the trade association for traders, estimates that as many as 400,000 companies exchange up to $4 billion worth of goods annually.

But, before down-and-out Californians try their hand at non-monetary trading, barterers beware. Money might not change hands but that doesn't mean the exchange is exempt from state sales and use taxes.