How do credits work?

What a credit is worth

One credit is $1 of purchasing power with members. A $400 catering job earns 400 credits, and a $150 brake repair costs 150 credits.

Credits are a closed loop. They are spent only inside the network. They are not cryptocurrency, they are not a separate currency, and their value does not float against the US dollar. Think of them as a record that lets member businesses buy from each other without writing a check.

How you earn and spend them

You earn credits by selling to other members. The credits post to you when the buyer confirms the trade, or on their own after 7 days. If something goes wrong, a problem can be reported within 30 days. You spend credits with any member business. You don't have to buy from the business that bought from you.

A simple loop: a printer prints 1,000 menus for a café and earns 800 credits. The next month, the printer uses 600 of those credits to get the company truck serviced by an auto shop in the network. The café and the auto shop never had to deal with each other. Earned credits roll forward month to month, so the printer spends the rest when it needs something.

Every new member also starts with 100 welcome credits to spend with any member. It is a gift, not a loan. Members find what to spend on in Discover, on the map, and through suggestions in the app.

Why credits help on slow days

Most businesses have open capacity: an empty chair on a Tuesday, a crew with a gap in the schedule, tables that sit empty after lunch. Selling that time to other members earns credits you can spend on things the business would otherwise pay cash for.

You choose which offers take trade and when. Cash customers stay exactly as they are, and one switch pauses new trade customers anytime.

Is income from trade taxable?

Yes. The IRS treats income from trade like cash income, generally in the year you earn it, the same as if you had been paid in cash.

Trade exchanges report each member's trade sales for the year on Form 1099-B. Purchases made with credits can be deductible business expenses the same way cash purchases are.

One planning point worth knowing: because trade income is taxable, you may owe tax in cash on income you earned in credits. Factor that into how much you choose to sell for credits in a given year.

This is general information, not tax advice. Keep records and confirm how trade income applies to your business with your accountant.

How Red Rock Trade handles reporting

A good trade network does the recordkeeping that makes reporting straightforward. That means a clear record of every trade and a year-end Form 1099-B for each business.

Red Rock Trade records every trade, and after year end each business gets a Form 1099-B for its trade. Normal tax obligations stay with you as the member, so share the form with your accountant.

Red Rock Trade, in St. George and Cedar City

Red Rock Trade is a local business trade network for St. George, Washington County and Iron County, Utah. You can read how Red Rock Trade works or see plans.

FAQ

Is income from trade taxable?

Yes. The IRS treats income from trade like cash income, generally in the year you earn it. Keep records and confirm the specifics with your accountant.

Will I get a 1099-B?

Yes. After year end, each business gets a Form 1099-B for its trade. Trade exchanges report each member's trade sales for the year on this form. Normal tax obligations stay with you as the member.

What is a credit worth?

One credit is $1 of purchasing power with members, used only inside the network. A $200 service costs 200 credits.

Can I exchange credits for cash?

No. Credits are spent only inside the network and can't be exchanged for cash. You earn them by selling to members and spend them with any member business.

Do credits roll over?

Earned credits roll forward month to month, so you can spend them when your business needs something.