OT - Watch out ND residents

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Posted By: Bryan

I saw this on a different board. Thought I would bring it to the attention of this board in case there are any North Dakota residents here that sell on ebay.

http://news.yahoo.com/s/ap/20051010/ap_on_hi_te/internet_auctioneers;_ylt=Agf_lm18xllvkoixq.l.inUj tBAF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

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Posted By: Mike Campbell

Going forward, I guess nothing will surprise me any more.




"We teach you to talk to the public, think on your feet, evaluate people, breathe properly and control your voice so you can sustain it for hours," says the Web site of the Western College of Auctioneering in Billings, which holds its classes at a motel.

Sad isn't it?

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Posted By: warshawlaw

Since it is obvious that if cleaning up e-commerce was the goal of the regulations, the government would do a lot more for the public good a lot faster by enforcing existing criminal and civil fraud laws against the crooks who are not likely to comply with a regulation registration scheme in the first place, the real reason behind these regulatory schemes is revenue, not policing. States have been eyeing internet commerce for years as a source of revenues. Current sales tax law is ill-suited to fully tapping it and Congress has been very fast (at the behest of their corporate sponsors) to use the Interstate Commerce Clause to mostly carve internet business out of the states' financial grasps on the basis that the medium is new and needs protection to grow.

With that in mind, state tax authorities are constantly trying to find ways to tap the cash. All states tax intrastate sales; even ebay-based sales. All states necessarily exempt purely interstate sales from sales tax because of the Federal bar to such state taxes under the Interstate Commerce Clause (which cedes sole control over interstate commerce to the Federal government). The traditional way states try to tax interstate transactions indirectly is by imposing an end-user use tax which corresponds to the sales tax in the jurisdiction when someone brings in something from out of state. In practice, this use tax is a flop. It is nearly impossible to track and collect it because the seller is necessarily outside the jurisdiction of the buyer's state (hence cannot be forced to maintain or provide records), and shipping records do not detail what is delivered. Consequently, it is only occasionally sought, usually when a company is audited for sales tax compliance and large interstate purchases are noted. The idea of a regulatory requirement with a concommitant registration fee has the attraction of indirectly tapping the interstate e-commerce revenue stream by using the states' police powers while also avoiding the complications inherent in trying to enforce an end user tax.

Another attraction of a license scheme is that it collects the low-hanging fruit first. It is very hard for a state to track and tap into mobile, semi-anonymous internet sellers who have no physical locations where state auditors can show up at and "smell smoke" before demanding registration and "protection" money (anyone who pays a business tax locally knows just what I mean--when a tax regulator shows up at your business looking for your license, you are dead meat. When he shows up at your house, you ask "what business" and tell him to bring a warrant next time he shows up). Stick and brick retail e-sellers like the ones quoted in the article are prime targets for this kind of licensing arrangement because they necessarily do a lot of untaxed interstate commerce and cannot fold up their tables and go home when the "revenooer" knocks on the door.

Finally, in this day and age of Big Brother, it doesn't escape one's graps that the data mined from a licensing operation can be used to create sales tax audit rolls that could be exchanged between agencies and between states. If a name on the license roll doesn't match a name on the auditor's list, you will get a letter...

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Posted By: T206Collector

...that ND require a degree in something, but the only schools are in neighboring MT and MN.

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Posted By: Cy

But wouldn't ebay be the actual auctioneer, with the seller merely being a consignor?

Cy

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Posted By: jay behrens

If anyone in the ND legislature bothered to read the fine print of all the cosignment sellers on eBay, they call themselves bailees. We do. eBay is not or sole source selling items either. We will sell items thru whatever venue we think will generate the most money. In some cases, this is not eBay. Also, given that there are options for BIN or store listings, how can they claim that consignment sellers are auctioneers. The auctions don't resemble traditional auctions. I would think that offering a BIN would immediately nullify the notion of an auction since there is an aotion to buy the item outright. Then again, the law common sense don't meet too often.

Jay

Sometimes when I reflect on all the beer I drink I feel ashamed. Then I look into the glass and think about the workers in the brewery and all of their hopes and dreams.
If I didn't drink this beer, they might be out of work and their dreams would be shattered. I think, "It is better to drink this beer and let their dreams come true than be selfish and worry about my liver."-- Babe Ruth

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Posted By: Bryan

Generally ebay sales will be exempted from sales tax thanks to the Commerce Clause which states a seller must have a physical presence in the state to collect sales tax. Oddly enough, the landmark case in deciding mimimal physical presence (called nexus) was Quill Corp v ND.

The only way sales tax can ever apply to ebay is if the seller has a physical presence (in most cases a physical location) in that state. In order to expand that base the Quill case would have to be overruled and by doing that a firestorm would be set across the business world. Don't look for that to happen any time soon.

In many states the end user tax (use tax) exists and individuals should remit it on their out of state, non-taxed purchases. Depending on the state you live in there should be a line item for it on your state income tax return. However, some states do allow a threshold to be met (amount purchased) before you are required to remit the use tax.

It is not out of the posibility to be audited for use tax by your individual state but the chances of that happening are slim to none. You usually have to be a high profile individual with a known high dollar collection or habit of purchasing out state before you would ever be considered for a use tax audit.