Sharing with the Tax Man

This time of year is especially busy for me because I work part time preparing taxes or should I say bartering my expertise in exchange for a Visa gift card. After all currency is only worth what we agree it’s worth. So taxes have got me thinking about how the new sharing economy could affect our infrastructure and the services that are paid for with our tax dollars. Now nobody WANTS to pay taxes but we all want to benefit from what our taxes pay for, such as roads, parks, libraries, police and fire protection, etc.

Legally speaking all income received is subject to federal income tax and most states have some sort of sales tax. Here in Florida we have no state income tax, most of the revenue needed is generated from property and sales taxes and tourism. So what happens when tourists come to Florida and instead of staying at a hotel they decide to try Airbnb or Couchsurfing? Is the owner of that spare room going to pay the 5% bed tax to the county and federal income tax on the money received? On a small scale it will probably not make much of a difference but as sharing becomes more and more popular it could have a huge impact.

My year end bonus last year was a barter gift card. The doctor I work for does a lot of barter business through a barter agency and we always have a surplus of “dollars.” Cash flow was down a bit last year and so we got barter gift cards instead of a cash bonus. I finally had a need this past month to use one of the other members of the barter community. I needed graduation announcements for my son and there was a printer in the network who I contacted to help me. When it came time to settle up the bill I gave her the gift card but I also had to pay the sales tax (7%) in cash. I understood why it was necessary, and realized that the printer could not pay the state of Florida in printing services, (or could they?) it had to be remitted in cash. Then a few days ago I “helped” my friend do her taxes in exchange for dinner. This got me to thinking about all the other barter and sharing transactions that happen without the state getting their cut and the financial shortfalls in the federal, state and local budgets. After all if I had done her taxes at my job she would have had to pay in cash and the income I received would have been taxed. In our transaction very little tax revenue was generated.

Shareable.net has an excellent soup illustration about how things change when we start sharing. Maybe as we move to this new economy we need to start thinking about the tax consequences. What kind of options could there be? Why couldn’t some people elect to pay their tax obligation in service to the respective tax collector? Do we really NEED a tax system to get things done? Look at the Detroit Robo-cop initiative. Maybe we should pay tax in proportion to the size our personal carbon footprint? These are just tiny examples. We have to start asking the big “What ifs?” So I’m asking...