Don't Forget the Tax Man Barters and trades of goods and services represent an increasingly significant percentage of our economy, especially since the advent of organized barter and trade exchanges.
Artists barter their art all the time.
Peter Max, to cite a high-profile example, was recently involved in a dispute with the IRS over the amount of tax that may or may not be owed on art that he bartered. With these facts in mind, now is a good time to review the tax laws pertaining to barter and trade in the United States. The law states that appropriate state, local, and federal taxes must be paid on either type of transaction. Corporate barter only applies to multi-million dollar companies. Retail trade exchange is what artists normally engage in and what is at issue here.