Quote:
Originally Posted by AddieJoss
I trhink part of the reason folks will use the “vault” is due to the fact they can ship their winnings from pwcc or other auction houses there not pay the sales tax. On larger purchases that will save a lot. Those items will also be available for sale to those that want to. Also, safer than some folks homes. The lending does not need to be to just buy other cards but can be for college costs, mortgage, etc, and just not wanting to liquidate just yet. The shear volume will not be mandatory as it is ancillary business for pwcc. I think it will make sense for folks in certain situations and bother option is not bad.
Cory Weiser
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Not so sure that is a way to get around the sales taxes. The buyer's address is already listed in Ebay records, so I believe that is the address they would use for determining sales tax liability, not where PWCC has their "Vault". Simply telling PWCC to hold onto the cards in their "Vault" in Oregon may sound like a way to escape sales tax, but i doubt that would work. You would have the ability to ask for your cards to be sent to you at any time, so sticking them in PWCC's "Vault" for a while to escape sales tax from where the buyer really lives would eventually get picked up by those states getting cheated out of sales tax as well. And PWCC could get their neck in the wringer with those other states by helping to hide the true nature of the transaction and assist these buyers in not paying the proper sales tax.
The other states would argue that there is no real purpose for keeping the cards in Oregon, other than to get around the sales tax. And if you did argue that you keep them there to facilitate PWCC being able to resell them quickly and easily for you, then the states could argue that you are actually acting like a dealer in that case and should probably be registered and filing sales tax returns yourself. And that also likely means you should be giving sales tax exemption certificates out to sellers when you buy items to begin with so you wouldn't be paying sales tax on anything anyway, but now you're in a business that should be filing and reporting what you're doing, which could lead to more trouble and work than it is worth.
The courts would have a field day with this. Saying you don't owe the sales tax because you told someone to hold the items for you in a non sales tax state would hold water like a sieve. This would likely be viewed as a "step transaction" where the buyer gets the item, has it shipped to them and then turns around and sends it to PWCC in a non-sales tax state. The fact that you tell PWCC to hold on to the item for you doesn't mean the buyer still didn't go through technically receiving the item and then deciding to have PWCC holding it. Unless it was for a "business purpose", which I already noted earlier would mean you probably should be registered and filing sales sales taxes as a dealer, the other states would argue the idea of holding your cards in Oregon is a deceptive practice meant only to beat the states out of the sales tax they are due.. What you are proposing is an out and out scam to defraud states of sales taxes due them, and would likely get anyone involved in trouble if caught. And I'm talking possible criminal prosecution for the parties involved as that borders on tax evasion.
Think about it. If what you suggested would work to escape sales tax, why wouldn't someone set up a company in a non-sales tax state and instead of acting like a consignor and selling items for people, like PWCC does, this company instead buys items on behalf of their clients so they don't have to pay sales tax. The company charges a fee, say 1%-2% of the value of items they buy, and argue it is for their services in purchasing items for their clients and not a portion of the sales tax they saved them. The item goes to them at their address in a non-sales tax state, and they simply turn over the items to their clients once they receive them, sans any sales tax. Because of the shipping/postage costs involved it wouldn't make sense to do on small, nominal valued items, but for a big dollar item it could make a lost of sense.
The problem with this idea is that the company doing the purchasing would likely be determined to be acting as an agent for the real buyers, and doing so purposely to get around paying the sales tax. Or, the states would argue that the company doing the purchasing was in effect a dealer themselves ans that when they got reimbursed for their purchases on behalf of their clients that were effectively selling those to the clients and therefore they should be collecting and remitting sales tax to all these other states themselves.
Oh, someone doing this would likely get away with it for a while, but once a state got wise, I wouldn't want to be the parties involved in defrauding the states of their sales taxes.