Hertiage Auction Net Effective Rate

[Edwolf1963]

Won one lot last night on Hertiage and got the invoice this morning below. Doing the simple math on the final cost to me, makes the total fee percentage back to me at 33.8%

I haven't been able to be very aggressive in any bidding with Heritage since they sent out their tax advisories to many/many states including me in Illinois. Though I have not seen or read of any physical location they have here or built within the last year or so, I got the advisory note as did several others in other states. (Funny how they built physical locations in no less than 10 states all at once.) It is what it is and I have watched Hertiage since the advisory letter knowingly. Obviously with that knowledge also means that I've had to factor in over 30% now (give or take depending on amount of bid/how S&H factors in as a percentage) lower than I might otherwise vs other AHs at (approx.) 14% to 24% net effective buyer rates.

As a consignor, that's a consideration that weighs heavily and leaves me to feel I would never use them as that's just too big of a cut to incur. Whomever consigned this E94 SGC40 Davis took in $220 (assuming no consignor fees - which I doubt) on a card I thought should have easily topped out at $400+ given current market. Certainly as the buyer I'm happy I was able to catch it at this price (even with the net effective buyer rate) - but as both consignor and buyer of late, it still makes me wonder if the consignor in this case is pleased with that ROI .. and/or where I will go to sell or consign in the future.

[edjs]

Ed,

I swear, I was sitting with that card open, debating back and forth in my mind "should I bid, no, maybe, should I?" I watched the timer count down to zero, that was how much I liked that card. Congrat's.

Ed

[Edwolf1963]

Ed, thanks – yeah, great card/great price (even with the net effective buyer rate) I was really surprised, I threw that bid in some time ago and didn't expect it to last without being bumped. I was even prepared to take it higher within the range I thought it probably should go for. Perhaps it was lost on the radar of other very nice cards they had close over the last couple days? No complaints on that front – just hard to be competitive usually with Heritage given the net rate it will end up coming back on me.

Thanks for your note/feedback!

[frankbmd]

Ed, your HANER* is my EBP**

*Heritage Auction Net Effective Rate

**Effective Buyer's Premium

http://www.net54baseball.com/showthread.php?t=188256

[BobC]

In regards to one of the OP's comments in his opening post, Heritage didn't necessarily have to build a physical location in Illinois, or any other state, to suddenly become liable for collecting and remitting sales tax on sales within that particular state. Every state that imposes sales tax has their own unique rules that can cause that company to have what is known as "nexus" for the imposition of sales tax liability on sales within their state.

Physical presence in any state, under current law, is pretty much a mortal lock that the company is subject to sales tax laws but, not the sole factor. Depending on the state, having representatives/employees in-state, use of agents, simply having activity above a certain level, making deliveries in company vehicles or attending trade shows, amongst other things, can cause a company to have "nexus" for sales tax purposes in a particular state.

In Illinois in particular, there's actually a definition by which an out-of-state seller doing telemarketing into the state may be deemed to be a "retailer" for Illinois sales tax purposes and thereby subject to Illinois sales tax.

Sales tax liability and collection laws has been in a flux for years now as more states keep trying to increase their tax revenues in any way possible, especially if they can increase taxes on out-of-state companies. There's even a group known as the Multi-State Tax Compact which is working to make the sales/use tax laws more universal across all the states in the U.S. A good number of the states already belong to and agree with the Compact and it is ultimately thought that one day, all the states will be buy-in and be party to some form of this universal agreement. This would possibly include having all companies be liable for collecting and remitting sales tax in all states, even if there is no physical or other presence in these other states.

I know a lot of people look upon the sales tax as an extra cost and try to not pay it but, it is mandated and part of the laws in pretty much every state that if you don't get charged sales tax by the seller, you are required to voluntarily remit and file a use tax return in some form with the state you're in. As states become more and more aggressive in tax collection efforts in the future, don't be surprised when large, highly visible companies like Heritage end up charging sales tax to pretty much everybody. I think it is more a question of when, not if, we're all going to have to pay sales tax on major auction house winnings.

BobC

[bobbyw8469]

I know a lot of people look upon the sales tax as an extra cost and try to not pay it but, it is mandated and part of the laws in pretty much every state that if you don't get charged sales tax by the seller, you are required to voluntarily remit and file a use tax return in some form with the state you're in. As states become more and more aggressive in tax collection efforts in the future, don't be surprised when large, highly visible companies like Heritage end up charging sales tax to pretty much everybody. I think it is more a question of when, not if, we're all going to have to pay sales tax on major auction house winnings.

These are used items though. Technically, wasn't the sales tax paid when the items were purchased? Can the government tax something indefinitely?

[bcornell]

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