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Frequently Asked Questions About Using Saturn Seattle / Tacoma Barter

Q. What is barter? 
A. Barter is a way of transacting business without the use of cash. You can buy what you need and pay for it with what you have. A sale is made that would not have been if cash were required. Plus, there is an immediate increase in cash flow when one trades for an expense that would otherwise be paid for in cash.

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Q. What are the advantages of barter? 
A. There are several, with the foremost being new business. Barter provides you with new clients and allows you to expand your market beyond your cash-paying accounts. Barter also helps in conserving cash. Instead of spending cash to purchase goods and services, you can barter your own goods and services to pay for those things you need. Thus, more cash stays within your business, providing increased cash flow. Barter puts idle resources to work. Excess time, inventory, and capacity are converted into profits.

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Q. Why join Saturn Barter ? 
A. The problem with one-on-one trading that you are accustomed to, is that each business owner must need exactly what the other has to offer. In the Saturn Barter barter network, everyone trades with everyone, even if they do not want what the other person has to offer. Trade dollars are credited to a trade account with Saturn Barter which can then be spent on any item or service needed or wanted from within the network. 

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Q. How does barter work within Saturn Barter ? 
A. Clients of Saturn Barter use Trade Dollars, instead of cash to handle their transactions. For example, if a client sells $1000 worth of products to another client, they will receive $1000 in Trade Dollars credited to their Saturn Barter trade account. These Trade Dollars can then be used to purchase from the other trading clients within the Saturn Barter network. Saturn Barter is a third-party record keeper, providing monthly statements to clients which reflect their purchases, sales, fees, and current trade dollar balance. 

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Q. What does it cost to get started in Saturn Barter ? 
A. There is a one-time membership investment and a modest monthly administrative fee. 

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Q.How does Saturn Barter make money? 
A. There is a 6 - 7½% transaction fee on sales and purchases. This represents a fee for generating new business for clients of our exchange network. Trade business provided is NEW business from NEW clients over and above your standard cash clients. Most business owners feel justified in paying a small percentage to acquire new business. This fee is Saturn Barter 's main cash producing vehicle, necessary to keep the exchange operating on a financially responsible basis. 

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Q. How can one trade more profitably? 
A. Don't limit yourself to worrying about one or two large one-time purchases. Look at your business checkbook for the last 12 months as a memory aid. Think too, of your personal needs. If you regularly take cash out of your company for living expenses like travel, home improvements, etc. why not take out a barter income instead and save your cash for products and services that Saturn Barter may not be able to supply?

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Q. Are there any unusual uses for barter? 
A. Yes. Barter provides limitless opportunities. Here are just a few creative ones:  
 
Pay Employees.Use trade dollars to pay employee benefits, bonuses, and perks.  
 
Pay Bills. Use trade dollars to pay some of your outstanding cash bills. If you owe a vendor money for a product or service that you just don't have enough cash to pay - talk to them about barter with Saturn Barter . If they become part of our network and you have a trade balance to cover the amount owed to them - then you can immediately pay them.  
 
Collect Past Due. Receivables Businesses that are unable to pay money they owe you would probably be very willing to pay you with their product or service. You may not need these offerings directly, but Saturn Barter may have a market for their products. So phone Saturn Barter with the specifics and we may be able to move their products, either by them becoming part of our exchange network and working with their own account. Or, we can process the transaction through your Saturn Barter account, and credit your account when the products or services have been sold.

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Q. Suppose I want to spend more than what is in my trade account? 
A. The standard policy is that you must have the trade dollars earned in your Saturn Barter account from previous sales to cover all purchases. If and when credit is requested, it is handled on an individual transaction basis. All loans are subject to a 1 ½% per month compounded interest charge on the unpaid balance and subject to the provisions in The Rules and Regulations of The Saturn Barter Contract Agreement and General Trading Policies and Procedures. 

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Q. Are there any tax advantages to barter? 
A. There are no tax advantages or disadvantages to barter. Barter income is the same as cash income for tax purposes. Trading should be considered a marketing tool, not a tax tool. As with cash income, however, trade purchases that are business related are also tax deductible. 

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Q. What does the IRS think about Barter Companies?
A. The Internal Revenue Service has outlined how barter is to take place within the US economy. As a professional barter company, Saturn Barter complies by the guidelines outlined by the IRS. There is no tax advantage or disadvantage in participating in barter. As stated by the IRS,
“Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a barter exchange company. A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.
Unlike one-on-one bartering, members of exchanges are not obligated to barter or purchase directly from a seller. Instead, when a barter exchange member sells a product or a service to another member, their barter account is credited for the fair market value of the sale. When a barter exchange member buys, the account is debited for the fair market value of the purchase.

Trade Dollars
Barter exchanges have their own unit of exchange, usually known as barter or trade dollars. Trade dollars or barter dollars are valued in U.S. currency for the purposes of information returns. Trade dollars allow barter to take place between parties when one party may not have a simultaneous need or desire for the goods or services of the other members. Barter exchanges act as the bookkeeper for keeping track of trade dollars that participants accumulate. Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash.

Record Keeping
Barter exchanges, whether Internet based or with a physical location, are required to file Form 1099-B for all transactions unless certain exceptions are met.

To seek further information about barter, please review the following links from the IRS:

LINKS FOR EXCHANGE MEMBERS:

LINKS EXCHANGE OWNERS NEED TO UNDERSTAND:

How is sales tax handled in a Saturn Barter transaction?
When transacting a Saturn Barter transaction the whole amount including sales tax is included in the transaction. The selling party is responsible for remitting the sales tax to the Department of Revenue during their regular tax remittance cycle. This sales tax expense can be recouped when Saturn Barter members spend their trade dollars within the exchange provided they are spending on items where sales tax is applicable.

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Q. How do I know how much barter income to include on my tax return? 
A. At the end of the year, Saturn Barter totals your barter sales and submits this information to the IRS on the form 1099B. You are also mailed a copy of this form for your records. 

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Q. Who decides what prices the seller will charge on barter? 
A. Essentially, the market determines pricing just as it would for cash. The seller is expected to trade their goods and services at their prevailing prices. By accepting or rejecting prices, Saturn Barter members are ultimately the determining authority in the pricing integrity. Saturn Barter Brokers keep in constant contact with Members to monitor fair trading policies. 

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Q. Can I charge part cash and part trade? 
A. Saturn Barter Transactions are 100% trade.   If exceptions need to be made, then they need to be approved by Saturn Barter Company.  If you encounter vendors requesting cash on transactions, notify Saturn Barter immediately. 

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Q. How do I get started in Saturn Barter ? 
A. Simply go to the Join Us section of this website. There you can complete a Membership Form and read our Application Agreement Contract and our General Trading Policies and Procedures. A member of our staff will then call you to discuss your initial investment payment and discuss your products and services, as well as full details on our barter program. Our Client Services Team will then assist you in getting the most from your barter investment. 

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© Saturn Barter Company LLC