Heritage & PWCC and the PSA 9 Mays

[BobC]

Originally Posted by icurnmedic

Are we certain he is avoiding tax?
It works when bought on eBay but I do not get the option to send to the vault and save from auction houses.
I suppose if you registered using the vault as your address might be different.
And yes, I use the vault.
Thomas

The fact that he had to wait for the PWCC scans to see the issue pretty much guarantees he had Heritage ship the card straight to PWCC. So, he most likely gave that as his shipping address to HA, and therefore paid no sales tax. Put it this way, if he's using their vault, but not bothering to avail himself of the potential sales tax savings, that to me wouldn't be very intelligent.

[Yoda]

Originally Posted by BobC

Leon,

Sales and Use Taxes are state, not federal laws, so they can really vary from state to state. Also, you won't typically see anything specifically written into such state laws that talks or deals with sales and use taxes being due when someone moves from one state/location to another. Sales and use taxes are typically calculated and due right when you purchase something, not long after you've bought and owned something, and then later on move and take them with you. Have you ever in your life heard of someone moving from one state to another, and then having to figure out if they now have to pay sales/use tax to the new resident state they just moved into? I'm going to guess that will be a huge NO, because no state and their legislature could ever be that stupid (regardless of how hard a lot of them may try).

So, if you bought cards and had them immediately sent straight to, held, and then kept in a vault in a state with no sales taxes, that is where your cards are deemed to be kept/used, and therefore the sales/use taxes of that same state are applicable. The laws are the same for individuals and businesses. Ford Motor is headquartered out of Detroit, but has factories and offices all over the country. But if someone from the main office in Detroit orders something to be delivered and used at a plant in say Ohio, Ohio and not Michigan sales/use tax will be due on what was purchased, even if the invoice gets sent to Detroit, and the check to pay for the purchase comes from there as well. And the same goes for individuals like you and me, it doesn't matter where we live at the time we buy something online or otherwise have delivered to us from an out of state seller that determines sales/use tax on our purchase, it is where the item purchased is to be sent/kept/used. And that is one thing that is pretty much recognized and universally followed by all the states with sales and use taxes. And that is why the vaults work to keep people from paying any sales/use taxes when they're located in states with no sales/use taxes.

Now states are aware that people may try to get around sales taxes on big ticket items like cars. So even if you drive across state lines to buy a car, the sales tax will be charged based on where you end up registering and using the car, not necessarily where your main residence is. Think of someone having a vacation home they stay at a few weeks out of the year that is in another state, and they buy a car just to keep and use at the vacation home. The sales tax is due to the state your car is kept and used in, in that vacation home state, not the state you permanently reside in.

Normally state's sales/use tax laws say nothing about a time frame for how long after you purchased something in one state that you then need to wait before moving it to another state, and be totally free of any concern that the new state you just moved it to might think you now owe them sales/use tax on items just brought into that new state that were previously purchased elsewhere. There are some rare instances though where a time frame may be indicated in a state's sales/use tax laws. For example, California sales/tax laws have a specific provision, just for motor vehicles. If you buy a car in another state, and then move it to and register it in CA within less than one year from the date you originally bought the vehicle, you now owe CA the difference between the sales tax you paid in the state you originally bought it, and what you would have owed had you originally purchased it CA. If you originally paid more than what you would have paid CA, then you owe CA nothing. But if you owned the car a year or more before then moving it to CA, you don't ever owe CA any sales tax on the car you just moved into the state. And I believe they may have something about 90 days for other regular sales well. And CA is a very aggressive taxing state, yet even they realize you can't be subject to sales/use tax forever on items you're just moving from one state/location to another.

It's just that to my knowledge, most state currently have no specific language in their sales/use tax laws that spells out how long you'd have to keep a card in one of these vaults before you could then take it out and bring it home with you, and have absolutely no sales/use tax consequence from your state of residence. So, when looking at and maybe selecting which different vault provider you may be thinking of using, you may want to ask and find out up front what their policies are on charging sales/use taxes on something you end up removing from their vault, especially if it is long after you originally bought it and put it in there.

Bob, maybe you can help provide accurate advise on a sales tax issue I face with Heritage. Over several years, they have been charging me sales tax on any items successfully won. I live in Palm Beach, FL where Heritage has an office. I have disputed this charge for many years and have never received a clear explanation for their actions. The amount I have paid over the last few years totals $thousands. i have assumed that since the point of sale is in Texas, a Texas resident should have to pay the tax, fair enough, but why me in Florida where there is a 6% sales tax?
As a point of reference, I do not get charged sales tax by REA, LOTG or Scott Brockleman who is of course a Texan holding an auction in Texas.
It has reached a point where I probably will divorce myself from Heritage and focus on other, equally- trusted AH's.
Any light you could shed on this vexing problem much appreciated.

[Deertick]

John, you answered your own question. FL has always required a company with a physical location in the state to collect the sales tax, as do many (most?) others.

The bad news is that a lot of states (including FL) are rapidly moving toward taxing all internet sales, regardless of origination, whose destination is within the state.

[Sean]

Originally Posted by Deertick

John, you answered your own question. FL has always required a company with a physical location in the state to collect the sales tax, as do many (most?) others.

California has followed this same practice for more than 10 years.

[BobC]

Originally Posted by Yoda

Bob, maybe you can help provide accurate advise on a sales tax issue I face with Heritage. Over several years, they have been charging me sales tax on any items successfully won. I live in Palm Beach, FL where Heritage has an office. I have disputed this charge for many years and have never received a clear explanation for their actions. The amount I have paid over the last few years totals $thousands. i have assumed that since the point of sale is in Texas, a Texas resident should have to pay the tax, fair enough, but why me in Florida where there is a 6% sales tax?
As a point of reference, I do not get charged sales tax by REA, LOTG or Scott Brockleman who is of course a Texan holding an auction in Texas.
It has reached a point where I probably will divorce myself from Heritage and focus on other, equally- trusted AH's.
Any light you could shed on this vexing problem much appreciated.

John,

What Jim and Sean said in the two previous posts pretty much covers it. But to fully explain.............

It has always been recognized that for a state to be able to legally require a vendor/seller to have to charge, collect, and then remit sales taxes on sales they make to a customer in that same state, the seller/vendor has to have what is known as a sales tax "nexus" in that particular state. Think of "nexus" as a type or level of presence in a particular state. It has always been recognized and considered that having a physical presence in a state automatically gives a seller/vendor sales tax "nexus" in that state, so they can then be required to charge/collect/remit sales tax on any sales to that state they have "nexus" in. And physical presence is having employees, buildings, inventory, leased offices, and so on, in a state. You mentioned that Heritage has an office in Palm Beachy, so there is the physical presence in Florida that requires them to charge/collect/remit sales taxes on sales to all Florida customers, including you. This physical presence "nexus" requirement for all states in the US was then upheld and formalized in a 1992 SCOTUS ruling in the case of Quill Corp. vs. North Dakota.

The fact that Heritage made their sale out of Texas does not determine which state the sales tax is owed to. It is determined by what state they send/deliver the items being sold to. Another way to look at this, you are on vacation in Texas and walk into a store there and buy something, if applicable, you owe Texas sales tax because you completed the sale and took possession of the purchased item in Texas. However, if you instead call that same Texas store to buy and ask them to ship the same item to your home in Florida, if applicable, any sales tax due would be owed to Florida and not Texas, because Florida is now where the sale was completed upon your taking possession of what you purchased. Is that clear and make sense?

There was a further revision to the "nexus" rules as a result of another SCOTUS ruling in the 2018 case of South Dakota vs. Wayfair. This case still maintains that physical presence creates "nexus" for a seller/vendor in a particular state, but went further to recognize that an online or otherwise out-of-state seller can now also have "economic nexus" in a particular state for sales tax purposes by merely having $100,000 or more of sales, or 200 or more sales transactions, to a particular state in a single year. Not every state with a sales tax has adopted these exact same "economic nexus" thresholds as South Dakota, but a majority of them have imposed similar rules since the 2018 SCOTUS case.

Now other AHs may not be charging you sales tax right now because they have no physical presence in Florida, nor have they met Florida's "economic nexus" threshold, at least not yet. Florida set their threshold at simply $100,000 in sales for the previous calendar year, via legislation just recently taking effect on July 1, 2021. So once an outside of Florida AH hits $100,000 in Florida sales in a single calendar year, they are going to have to start charging/collecting/remitting sales tax to Florida on all Florida sales going forward, starting the calendar year after hitting that sales threshold of $100,000.

This should fully explain and answer your question. Bottom line is that Heritage is properly charging you Florida sales tax, whether you like it or not. Sorry, but nothing you can really do about it, unless you want to start using one of these "vault" services out there. Heritage has no choice and has to comply with the laws in place. Good luck!