Yes! The IRS and State both regard all business barters and trades as a business income and expense. You need to report your bartered expenses and earnings as outlined below. Please consult your accountant.
"...Reporting Bartering Income You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C, Profit or Loss from Business (Sole Proprietorship) or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return. Refer to Topic No. 308 and Should I File an Amended Return? for information on filing an amended return...."