Quote:
Originally Posted by BioCRN
I've sent stuff directly to vault, removed them hours later for shipping, and have never been charged sales tax (my state has it). The minimal vault fee has been extremely less than the possible sales tax.
I don't know if this is legal, grey area, or if it may become an issue later. This seems to be their system setup, though.
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That is a good, and very interesting, question. It has been discussed on here before, and some have said they thought that there was supposed to be a sales tax charged by the company operating the "vault" they were using if they went to take the cards out and have them sent to themselves. I, and others like Ryan, have stated that it is probably not going to happen as the sales tax laws, which vary from state to state, are not really clear on that topic. Think about it, no state is going to come in when a family moves into it from another state, and start going through all their belongings and furniture, etc., they brought with them to see if they can get some sales tax out of them.
Yet some states have unwritten agreements with neighboring states where they kind of look out for each other and share information about certain businesses where people are crossing over state lines to buy something in the next state to hopefully sidetrack their own state's sales tax laws. So the idea of states not really allowing something like what is being done with "vault" users to get around paying sales taxes is correct, it just isn't something any states have deemed worthy to look into and go after......yet!
But the amount of time one leaves something in a "vault", and the reason for then taking something out to bring back to one's true home, plays a role in whether or not a particular state would be concerned about the sales tax they didn't get.
Quite honestly, what you are doing by having the items you get sent to the vault, and then almost immediately have them forwarded to you in your resident state, would in my opinion certainly be viewed as an illegal attempt to get around the sales tax laws of your resident state. The states just don't have the time and resources to go after these types of schemes. And factor in the Covid issues the past few years and everything else going on, and it makes sense why they haven't bothered, yet! And as you can tell from the reputations some "vault" operators have garnered, just listen to what others are posting, it is no surprise that they may be pushing the illegal concept to people as a way to get more customers/consignors.
It is a grey area as I'm aware of no state that has specifically written into their sales tax laws anything about how long you would have to leave something like cards in a "vault" before taking them out and going home with them, and not potentially be subject to sales tax on them in your resident state.
As a point of reference though, California actually does have a very specific rule in their sales tax laws regarding licensed vehicles. If you purchase a vehicle in any state other than California, where no California sales tax was initially collected on it, and then move that vehicle to California within one year of the date you purchased it, California can come after you for the difference in sales tax that you may have paid to any other state when you bought the vehicle, and what you would have owed to California had you originally bought the vehicle in California. But wait one year and one day, and then move the vehicle to California, and there is no potential California sales tax liability, whatsoever. Again, this is only California, and very specific to just licensed vehicles, but clearly demonstrates how a state is likely to exempt someone from paying sales tax on a card they bought and had sent to a "vault", instead of their home state. It just depends on how long the card is left in the vault before someone tries to repatriate it to their home state. And that is the grey area that is not specifically in any state's sales tax laws that I'm aware of. Again, at least not yet till some state(s) figures out what these "vaults" are doing, and maybe goes after them.
Not to necessarily "stir the pot", but one thing you might want to do if you're uncomfortable with this potential issue hanging over your head is to ask the "vault" operator you are using what happens, and what they are going to do to protect you, should your home state ever come after them, or you, looking for sales tax on these cards you bought. I myself would be extremely interested in hearing how they would respond to that question. Good luck!