• PATRONS: Did you know we've a chat function for you now? Look to the bottom of the screen, you can chat, set up rooms, talk to each other individually or in groups! Click 'Chat' at the right side of the chat window to open the chat up.
  • Love Gotmead and want to see it grow? Then consider supporting the site and becoming a Patron! If you're logged in, click on your username to the right of the menu to see how as little as $30/year can get you access to the patron areas and the patron Facebook group and to support Gotmead!
  • We now have a Patron-exclusive Facebook group! Patrons my join at The Gotmead Patron Group. You MUST answer the questions, providing your Patron membership, when you request to join so I can verify your Patron membership. If the questions aren't answered, the request will be turned down.

Homebrew, Bartering, and The Law

African Bronze Honey - 50% off for GotMead members

MrMooCow

Got Mead? Patron
GotMead Patron
Nov 11, 2008
335
3
0
Woodridge, IL
So with the economy in the tank, you're seeing more and more people return to bartering (including using formal bartering networks). Other then building roads, I pretty much only have one talent/skill, and that's making booze. Now normally, because the government hates business and entrepreneurs, this does me no good. However, I chanced to run across the carpenter who made the custom cabinets in my condo. Somewhere in our discussion on house buying, he said he would be open to the idea of building me a bar for my new house in exchange for some custom made homebrew (I buy materials, he provides the skills and labor for the bar; Vice versa for booze).

This got me thinking, what other home repair/improvement services might I be able to obtain via booze? My regular handyman is a good old boy, who employs good old boy Poles. I bet I could get them to remodel my bathroom in exchange for booze. My neighbor's kid is a professional painter. My vet seemed to really like the Christmas cyser I gave him. Etc, etc.

So the question becomes, is that illegal? And more importantly, when does the TTB take notice and send their Jackboots after you?

Technically, I'd say the answer to the first is "Yes". The TTB rules and regulations say you can't sell booze without a license, but makes no mention of trading. At first I thought maybe there was a chance of a loophole, but a bit of searching finds that the IRS treats bartering exactly as income. If the IRS treats it like income, I should think the TTB would as well.

The real question then becomes, how much do they pay attention? I'm looking at "BarterQuest", and I'm seeing all manner of services being offered that would require all kinds of licensing and certifications if you were doing it for cash. This implies to me that the various regulatory agencies aren't really paying a lot of attention to the bartering world.

Anyway, just something rattling around the old skull. I'm curious if anyone has tried any kind of significant bartering of their booze, or seen anything regarding how much enforcement the government is doing on such things.

- Brett
 

wildoates

NewBee
Registered Member
Mar 22, 2009
2,373
4
0
Elk Grove, CA
I dunno, but it's a very good question. I know that technically, the IRS expects you to claim fair value on your taxes for bartered goods, but I don't know about homebrew.
 

AToE

NewBee
Registered Member
Jun 8, 2009
4,066
3
0
Calgary AB Canada
I'm almost certain it's illegal, but so's speeding. Unfortunately when it comes to money and alcohol, both of our governments get pretty uppity so the risks go up. If hypothetically a person did such a thing, not talking about it, especially on the net, would be key. ;)
 

fatbloke

good egg/snappy dresser.....
GotMead Patron
I'd suspect that the reg's would be similar to over here for things like that i.e. that they can prevent it as it's obtaining goods and/or services that have applicable pecuniary value.

This is usually the case when "excise goods" are concerned (and more so, given that you lot in the US not only have to put up with the Federal regulation, but also the various State regulations).

They've usually closed all of those kind of loopholes.

Sure, it's possible that they haven't, but given that there's "an extra set of eye's" on the part of the regulators (if State have missed it, then Federal haven't and vice versa) I strongly suspect that it's a "no no", unless it's "done on the QT"
 

kudapucat

NewBee
Registered Member
Dec 2, 2010
2,383
10
0
Bundoora, Melbourne, Australia
I regularly give my honey supplier mead, as it's an example of what her honey produces. She gives me a good rate on honey, as I buy in bulk.
The tea stallholder nearby also likes mead. I give him a bottle now and then, and chat lots. He often gives me some tea, I suppose as a loss leader, to advertise, and perhaps because he likes my mead.
Either way, these are gifts freely given, and no bartering takes place.
 

fatbloke

good egg/snappy dresser.....
GotMead Patron
I regularly give my honey supplier mead, as it's an example of what her honey produces. She gives me a good rate on honey, as I buy in bulk.
The tea stallholder nearby also likes mead. I give him a bottle now and then, and chat lots. He often gives me some tea, I suppose as a loss leader, to advertise, and perhaps because he likes my mead.
Either way, these are gifts freely given, and no bartering takes place.
Which is, I suspect, about the only way it can be legally distributed i.e. without licensing/registration etc with the tax authorities.

Lets face it, we're all "up sh1t creek, without a paddle" with this - as it seems that out of the major, industrialised, english speaking nations, that is really enlightened about this, is the Kiwi's. They allow all manner of home brew making, including distillation.... And it's proved a success, as their tax revenues have gone up since they Ok'd everything (well, according to various articles I've read anyway).....
 

MrMooCow

Got Mead? Patron
GotMead Patron
Nov 11, 2008
335
3
0
Woodridge, IL
That's one of the things that's so frustrating about the whole thing. It's easier for me to legally own a 50 cal sniper rifle then it is to make a little beer or wine to sell as a side business. "Want to make a little money on home made beer? Nope, sorry, you might hurt someone. What? You'd like to purchase a weapon pretty much designed only for killing humans, with an effective range of almost 6000 feet? Go right ahead!" (Lest we get distracted by snark, I do understand that 50 cal rifles can be used for other things besides killing humans).

I can commercially make food, build cars/airplanes, perform structural carpentry/masonry, advise people on health matters.... all easier and with fewer restrictions then the making of alcohol. And all of those with at least as great a potential for harm as making wine and beer.

I'd be fine with requiring a basic license, maybe some safety classes. I'll pay taxes on the proceeds, Caesar can have his pound of flesh, I just don't get why the government is so paranoid about booze made at home.

*pause, deep breath*

Actually, I do. I expect that the heavy restrictions are put in place by the industry lobbyists because they know that high priced wine/beer is a scam. Anyone with half a brain can make a product just as good as 99% of the commercial stuff, at a far lower cost, and just as safely. I'll bite on distillation needing to be well regulated, but some basic safety classes are all you should need to get a commercial license to produce small quantities of wine/booze. The free market will take care of the folks who produce vinegar.

I'm ranting aren't I? I'm starting to turn into the gotmead equivalent of that homeless guy who stands on the corner mumbling to himself and twitching violently.

*grumble* *twitch* *mumble*
 

TheAlchemist

I am Meadlemania
GotMead Patron
Sep 9, 2010
2,464
8
0
near a lake
I regularly give my honey supplier mead, as it's an example of what her honey produces. She gives me a good rate on honey, as I buy in bulk.
The tea stallholder nearby also likes mead. I give him a bottle now and then, and chat lots. He often gives me some tea, I suppose as a loss leader, to advertise, and perhaps because he likes my mead.
Either way, these are gifts freely given, and no bartering takes place.
Indeed, the way we use language has a powerful impact on the way we think.

In the US it is legal to make a gift to the person of your choice for a value of $10K every year without paying taxes on that value.

There is no law that I know of that would prevent you from making a gift of your homebrew skills to your friend the vet. Likewise, your carpenter is at liberty to make a gift of carpentry skills to you.

These are gifts. Just say it out loud. "I'd be happy to offer you a gift of the use of my homebrew skills..."

If it is a barter, then, as Jesus would say, "Pay Caesar what's due Caesar."

As an aside, on the subject of industry lobbyists, I'm hoping to see Farmageddon...
 

commonsenseman

NewBee
Registered Member
Mar 23, 2011
150
0
0
First of all, that's a really good idea.

Second of all, you were just giving him some "yeast samples" in exchange for his services, I don't see how that's a problem ;D

Third, I'm guessing that regulatory agencies are going to be paying more & more attention to bartering as time goes on. Check out the barter section on craigslist, it's getting pretty big.

Fourth, don't put up an ad on craigslist for free beer.
 

TheAlchemist

I am Meadlemania
GotMead Patron
Sep 9, 2010
2,464
8
0
near a lake
...you were just giving him some "yeast samples" in exchange for his services, I don't see how that's a problem ;D
Don't use the term "in exchange for" when referring to a gift. If it's "in exchange for" then it's a barter and subject to tax.

A Gift is a gift. Freely given. No strings...of course, if the recipient has a gift for you, that's nice...;)
 

commonsenseman

NewBee
Registered Member
Mar 23, 2011
150
0
0
Don't use the term "in exchange for" when referring to a gift. If it's "in exchange for" then it's a barter and subject to tax.

A Gift is a gift. Freely given. No strings...of course, if the recipient has a gift for you, that's nice...;)
Good call. I guess I was just trying to get around the alcohol part of it.

I do freely give away yeast samples anyway, why not give them to somebody who has skills?
 

Chevette Girl

All around BAD EXAMPLE
Moderator
Lifetime GotMead Patron
Apr 27, 2010
8,398
18
0
Ottawa, ON
Back in the way-back, I used to "earn" a bottle of mead every year at a festival by giving the meadmaker a backrub, it's not a skill I could earn income with either, so it's not like the gov't loses anything. I don't know if the gov't cares if you trade services for services like that, for years I used to barter one bottle of wine per riding lesson from one of my coaches, the gov't didn't lose out because I'm not allowed to sell the stuff anyway and she doesn't claim the income from lessons anyway. I don't know how big the transaction has to be before either of our governments would take notice. And if you're purchasing the materials for your reno and he's performing the labour for mead, well, that's between you and him, isn't it? If it's illegal, I'm guilty too, with my last Chevette, I often had the help of a mechanic who'd work for beer. <shrug> I guess it's just a matter of where the line is drawn.

Then there are some companies who'll do your repair job for cash, tax-free, if you'll forego the receipt (which I believe IS blatantly illegal, although I'm sure there are loopholes somewhere, like gifting, which is how we did it at craft sales when trading our goods with those of another vendor).

One of my associates is involved with two different barter networks, and the way it works (here anyway), is that you have an account of "barter dollars", if you "sell" something, you get barter dollars, and you "buy" things with barter dollars. There is a paper trail on it and sales taxes are paid so it's all above-board as far as that goes, but whether or not it's claimed as "income" for tax purposes depends on the legitimacy of the vendor, I guess...
 

JayH

NewBee
Registered Member
May 9, 2006
355
3
0
Corrales, NM
Many years ago while I was still tuning airplanes upside down for fun my instructor had one of the top, one of a kind aerobatic airplanes going. If you happen to be into airshows I know you would recognize it.

Anyway on a couple if times as a friend I bought one of his t-shirts ($200.00). It was one of the ways he knew who his real friends were. He also used to take his real fiends up for free rides and (on occasion) actually let them fly his toy.

I'm sure there is some way you could find out who would be willing to say give you as a friend some $'s or trade for your art work. The fact that that art work would happen to be able to be easily placed on that free bottle of yeast samples you gave them isn't your business.

Again, make sure they are your friend and not some government spy :)


Cheers
Jay
 

sarend

NewBee
Registered Member
Sep 24, 2010
102
0
0
Arizona
MrMooCow, I wouldn't worry too much about it. I have a family member who used to own an aviation business (that is how I achieved my private pilots license), then a limo business (after 9-11 killed his plane business) and now he has another business. He always told me, "The bartering system is alive and well in ...... City, Arizona." He never claimed anything.

Now, was that wrong per the laws? Yes. But, are we paying more in taxes now than what caused our founding fathers to revolt? Yes.

I have filled my elk tag here in Arizona and used some of the meat for auto repairs. Elk meat is hard to come by, and it is considered organic meat, of course.

I believe if a person sticks to the triple-S philosopy, they will be OK.

What is the triple-S? Houndsmen have practiced it since some fool decided to re-introduce wolves back into the western states. Remember, when you buy a purebread coon hound, train them, compete with them to get titles, and use them as part of your guide service; they are worth $1000s. So, when you find your best dog dead at the jaws of a wolf, you have lost $1000s of dollars and years of preparation. So, they Shoot, Shovel and Shutup. Meaning they don't brag to anyone. No one knows about it save for God.

If you barter a few bottles of mead and don't make it public knowlege, then I think you will be Ok. If someone official asks, then you can always say you and the other person are friends and each gave the other the goods/services out of friendship. If asked, I would have said I shared my elk meat with a friend because he was my friend. And, he worked on my car because he knew I was all thumbs and needed the help.

Stephen
 

MrMooCow

Got Mead? Patron
GotMead Patron
Nov 11, 2008
335
3
0
Woodridge, IL
Alrighty, so now let's pull this in a bit. I rent my spare room out. Could my roommate "buy into" my mead/wine/beer making hobby? IE, could he give me an extra $50/month for the express purpose of buying ingredients to make booze with?

Obviously, this is easy as shit to do on the QT. But could you do it completely above board? The relevant law seems to be:

Sec. 24.75 Wine for personal or family use.

(a) General. Any adult may, without payment of tax, produce wine for personal or family use and not for sale.

(b) Quantity. The aggregate amount of wine that may be produced exempt from tax with respect to any household may not exceed:

(1) 200 gallons per calendar year for a household in which two or more adults reside, or

(2) 100 gallons per calendar year if there is only one adult residing in the household.


Now, based on that, could I say in my lease something like "Rent is $600/month, and includes room and utilities. For an additional $50/month renter may have access to the bar and all booze contained therein." Where I then keep the bar stocked with tasty, tasty homebrew?

My roommate is not /family/, but he is a member of my household. Would this functionally be any different then any other shared household expense?

Discuss amongst yourselves.
 

AToE

NewBee
Registered Member
Jun 8, 2009
4,066
3
0
Calgary AB Canada
(b) Quantity. The aggregate amount of wine that may be produced exempt from tax with respect to any household may not exceed:

(1) 200 gallons per calendar year for a household in which two or more adults reside, or

(2) 100 gallons per calendar year if there is only one adult residing in the household.[/I]
Wow, your state is tight with the booze! Not that I'd ever exceed those amounts, but where I live we can have in our possesion at any one time, up to 300gal of cider, PLUS 300gal of beer, PLUS 300gal of wine (inluding mead) per household (all of these only talking of homebrew obviously). And the trick to that is that there actually is literally no limit to how much you can make, just how much you can have on-hand at any one point. If I could give the stuff away at a fast enough rate I could brew 300 gallons of EACH per week as long as I ditched it all before the next batch. Pretty cool stuff! ;)

Now, as far as people "pitching in" here's how I would imagine it would work. They would have to be of the same household, and the amounts given would have to in no way exceed the material cost of what they are consuming per month (I'm no lawyer but that makes sense to me). Also, the way you're saying, with them having access to homebrew for $$$ - no no no, you're in bad territory there, that's clearly sales of alcohol.

You want that made simpler? They're "not" pitching in, you're all "making it together". Make sure they know enough of the process to explain what their part would be in the process (hell, if you wanted you could actually make them help, why not?!), and then there is no exchange of anything, it was never your mead being given to them and their money being given to you, it was all of you making something together. This should make things much easier.

Within a household I can''t see anything being provable as far as exchange of goods goes. When you start going into tradespeople and such though you're on thin ice for sure - and plausible deniability kinda goes out the window when you start a thread on the subject on an internet forum!;)

As far as doing it totally on the up and up, the only way is if you're all pitching in and making brew together. Anything other than that is selling booze.
 

JSquared

NewBee
Registered Member
Aug 4, 2011
89
1
0
Tucson, AZ
MrMooCow, Yes you are legally able to put that in a lease. And being that renting is a business transaction you would pay taxes on that $600 as well as the $50 "bar access fee". Now the problem comes in to the legality of the bar. You would have to have a liquor license or be registered as a private club. (at least in this state)

Now if you happen to have a rent of $650 and you use the "extra" to make Booze with it then he is a member of the household and you can produce the higher limit of 200 gal and he can consume his share. I know this because I can't get married to my partner is this state but because we live together I can produce the higher limit.
 

AToE

NewBee
Registered Member
Jun 8, 2009
4,066
3
0
Calgary AB Canada
I know this because I can't get married to my partner is this state but because we live together I can produce the higher limit.
Ahah, well at least there's some benifit! ;) Just move up to Canada, nearly unlimited homebrew and marriage for all! ;D
 

Chevette Girl

All around BAD EXAMPLE
Moderator
Lifetime GotMead Patron
Apr 27, 2010
8,398
18
0
Ottawa, ON
We have a lot of brew-on-site places around here and the way they get around it is exactly as discussed you're partnering to make the wine - and apparently the legal line here is that if you throw the yeast in, you made the booze, so the brew place isn't selling you wine, but since they make sure you pitch the yeast packet, the $$ you pay them is rental of premises and equipment.

So call it a bottle deposit on your line item list for your renter. But honestly, since you're not making a profit on the proceeds, I'd figure you could take his $50 under the table as long as he pitches yeast now and then, then you're partners. The other way is that access to the rec room containing the bar is extra, charge him an extra $50 on his entire rent bill for use of one more room in the house. The booze just happens to be in the bar.
 
African Bronze Honey - 50% off for GotMead members