Hillel Nadler (Wayne State), Taxing Zero, 26 Fla. Tax Rev. __ (2023):

“Zero-price” transactions—by which items or providers are offered at a money value of zero—are an more and more essential characteristic of financial life. Customers can search the net, use e-mail, hearken to music, and even commerce shares, all with out paying something out of pocket. However zero-price transactions will not be free: for-profit companies present merchandise at zero-price as a result of they get one thing worthwhile from customers in return. Customers pay with their time, consideration, or personal info. Zero-price transactions will not be giveaways; they’re a type of barter trade.

Below federal earnings tax principals, barter exchanges are taxable: each events to the transaction are taxed on the worth they obtain. This Article considers the therapy of zero-price transactions from an earnings tax perspective. Ought to zero-price transactions be taxed like barter exchanges? If that’s the case, how ought to the quantity acquired in a zero-price transaction be valued? And the way can the federal authorities virtually accumulate tax owed on zero-price transactions?

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