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Comment by kazen44 | Hacker News Reader

isn't this mainly because paying in anything other then the national currency is illegal in most western nations?

For tax purposes, even things like free lunch are considered paymeny aswell.

>isn't this mainly because paying in anything other then the national currency is illegal in most western nations?

I can offer you 10 chickens to dig a trench, nothing illegal about that. You'd have to pay income tax tho, and the IRS does not accept (fractions of) chickens.

As a one-off barter or contractor arrangement sure, but in the U.S., if you're paying anyone who'd be considered an employee, you have to pay at least minimum wage in cash or equivalent, except that you can deduct the cost of room and board if you provide it. Details: https://www.law.cornell.edu/cfr/text/29/531.27

Good point, I did not know that.

Assume that I give you on top of salary Amazon coupons for 1000$. No tax shenanigans. I (employer ) pay all needed taxes to be clean with IRS.

This way I can guarantee quite a nice chunk of revenue for the whole foods store that is opened there. And I effectively subsidize it.

The way I've seen taxes get handled for something like this is that the company giving, say, a $1000 out-of-band benefit will actually top it up to $1250 or whatever the appropriate amount is so it's (approximately) giving a $1,000 post tax benefit.

Even better: Make it an employee discount of 50% off at Whole Foods for all Amazon employees, up to some monthly limit. If structured this way, would it even be taxable at all? I'm not aware of employee discounts being taxed.

In the US tax handling of employee discounts at least on physical goods is as follows: if the discount brings the price paid below cost, then the below-cost subsidy is treated as income received by the employee.

Concrete example: Company sells widgets for $12, of which $2 is profit. Then as long as the employee price is at least $10 there are no tax implications for the employees. If it were $9 they would owe tax on $1 per widget bought, etc.

That said, some companies will pay the relevant taxes for you, or at least try to by guessing at your marginal rate...

I wonder how clearance items work with that.

That is a good question. I don't know offhand; it had not come up in the cases I was dealing with.

> isn't this mainly because paying in anything other then the national currency is illegal in most western nations?

Which makes company towns illegal, hence Amazon is not creating company towns...

I am not an accountant but presumably any material issuance of some sort of scrip that could be exchanged for goods would be seen as tax evasion.

Free meals are allowed under certain guidelines, which seem to be written in a way that generally lets companies like Google skate right up to the edge and not go over it (AFAIK). Things like loyalty points and rebates on business expenses are similarly ignored.

> I am not an accountant but presumably any material issuance of some sort of scrip that could be exchanged for goods would be seen as tax evasion.

It's not. You just have to pay taxes on it.

At which point, why would I want "fake" money that I could only spend in one place rather than real dollars? (That said, this does happen at a small scale with things like peer reward points and so forth but that's a fairly straightforward point->dollar exchange through things like gift cards.)

>At which point, why would I want "fake" money that I could only spend in one place rather than real dollars?

You might want it because the company paying you "fake" money gives you more than the competitor that gives you legal tender. The company might also give you access to discounted goods/services, which makes each dollar of the "fake" money more valuable. There's another comment that goes to this in more detail: https://news.ycombinator.com/item?id=27948860

Regardless the cause, it would still make it not a company town, yes?

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