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Originally Posted by Johnny630
Thanks, Bob !
With these vaults...say the buyer actually wants to have the card in his hand. Say down the road 10 years or so the buyer retires and moves to a sales tax-free state like Nevada can he then have it shipped to his new residence in Nevada without having to pay his original state's sales tax at the time of purchase ?
I often wonder what happens if one of the owners/corporations of these vaults gets indicated or files bankruptcy what happens to your cards then ?
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We'd discussed that very issue in other threads about taking a card out of a vault, and whether or not doing so would trigger sales tax for the buyer down the road then. First, sales taxes are all different for every state, so my advice would be to check the rules for whatever state it is you do currently live in. But as I said in some of those earlier emails, I do NOT believe you should be charged with paying sales tax if you leave a card you bought in a vault, and then take it out to bring home with you later on. The question is though, how long do you need to leave it in the vault before bringing it home so your state doesn't come after you for sales tax?
That is the $64,000 question, and there is no specific answer to that question for any specific state. If you have cards you win online or from auction houses sent to a vault, and then immediately have the vault owner forward the items to you in your state of residence that collects sales tax, I'm fairly confident your resident state's sales tax agents would be interested in discussing your somewhat obvious practice of trying to skirt the sales tax laws with you. But what if you wait say 6 months, 12 months, or longer, before taking your cards from the vault back to your home? California sales tax laws has a specific rule in it that says if you buy a car in a state with no sales tax or a lesser sales tax rate than California, and then within less than one year of buying it move to California and bring the car with you, California says you now owe them the difference of what you paid some other state for sales tax on that car, and what you would have paid California had you originally bought the car in their state. But wait at least one year or more before moving to California and bringing that car with you, and they won't ask you to pay a penny of sales tax to them on that car. Unfortunately, there isn't really any such similar rule specified in any state's sales tax laws for things like baseball cards. So, you kind of have to play things by ear and figure out for yourself how long to maybe leave items in a vault before taking them home. And be sure to check with whomever is operating the vault you are using to see if they have any rules or restrictions in place about sales taxes and taking things out of the vault. They may have certain understandings/arrangements with some state authorities in regards to sales taxes so that the states(s) don't come after them for potentially facilitating a form of tax evasion. Based on what California law says about sales taxes on vehicles, I would think that leaving cards in a vault for a year or more before removing them to take home would make it fairly safe to assume your resident state won't be looking for sales tax from you then on those cards.
In your specific case where the cards were left in the vault for 10 years, and then you retire and take them with you to your new home in Nevada, you would definitely not owe any sales tax to your original resident state. You would have to still be living in your original resident state with sales taxes to have any chance of being charged sales tax. In your scenario, the cards are never being held in a state with sales taxes. But a 10 year wait in a vault should do away with that sales tax issue regardless of whether you take the cards out and into a state with, or without sales tax. Think of it this way. Say you live in Nevada and then decide to move to another state that does have sales tax. You take all your furniture, clothes and belongings, that you never paid sales tax on in Nevada, with to your new home. No state that I am aware of is going to come along and now tell you that you need to pay them sales tax on all your belongings that you have now brought into their state.
As for your other question about what happens to your cards in a vault if the vault owner goes bankrupt, there had been some discussions about that as well. I am not an attorney, but believe that if you are renting a space in a vault to hold your cards, the treatment would be similar to what happens to property held in say a rental locker if the locker owner goes bankrupt. I don't believe your property can be taken because you are legally renting space with the now bankrupt entity, and the property you keep in that space is yours. However, if in the case of say consigning items to an auction house, if the auction house goes bankrupt while holding your items that can be a different story. In that case, you may need to actually be proactive and possibly do a UCC filing to demonstrate your ownership of property you had consigned to the now bankrupt entity to protect your interest. I'll leave it to our resident attorneys to better and more properly explain that situation.