Taxing Zero

Florida Tax Review, Vol. 26 (Forthcoming)

Wayne State University Law School Research Paper No. 2023-26

59 Pages Posted: 21 May 2023 Last revised: 10 Jul 2023

See all articles by Hillel Nadler

Hillel Nadler

Wayne State University Law School

Date Written: May 15, 2023


“Zero-price” transactions—in which goods or services are provided at a cash price of zero—are an increasingly important feature of economic life. Consumers can search the web, use email, listen to music, and even trade stocks, all without paying anything out of pocket. But zero-price transactions are not free: for-profit businesses provide products at zero-price because they get something valuable from consumers in return. Consumers pay with their time, attention, or private information. Zero-price transactions are not giveaways; they are a form of barter exchange.

Under federal income tax principals, barter exchanges are taxable: both parties to the transaction are taxed on the value they receive. This Article considers the treatment of zero-price transactions from an income tax perspective. Should zero-price transactions be taxed like barter exchanges? If so, how should the amount received in a zero-price transaction be valued? And how can the federal government practically collect tax owed on zero-price transactions?

Keywords: taxation, barter, technology, free products, free services, international taxation

JEL Classification: K34

Suggested Citation

Nadler, Hillel, Taxing Zero (May 15, 2023). Florida Tax Review, Vol. 26 (Forthcoming) , Wayne State University Law School Research Paper No. 2023-26, Available at SSRN:

Hillel Nadler (Contact Author)

Wayne State University Law School ( email )

471 Palmer
Detroit, MI 48202
United States

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