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#1
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PWCC vault...explain
As I've noted earlier, I am back after putting a hold on collecting for 4 or 5 years. I've been bidding at various major auctions, scanning ebay and etc. notiicing new trends and practices (e.g. I was first to post here about the new ebay "requiriing authentication" policy). I know PWCC has been a source of criticism and controversy here for many years, but let me ask this: One of several changes there since I exited is their "vault." Just tell me if I have this right:
a) if you win a card you pay the usual 20% premium but you leave it with them and avoid tax and shipping b) you can then require them to sell it at an upcoming auction c) you don't pay an additional fee when it's sold but PWCC collects another 20% from buyer. Is this right? Any other details? Thanks. |
#2
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One word
AVOID |
#3
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a "Why" would be helpful
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#4
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Because a tax avoidance scheme run by a fraud ring doesn’t exactly seem like a safe place to leave ones possessions with.
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#5
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We discussed them ad nauseam for the past 3 years on this platform along with numerous others including blowout.
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#6
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I don’t think “avoid” is at all correct. For those who want it, the pwcc (or goldin or eBay, or whatever) vault can be a very solid way to safely store cards while legally avoiding state sales tax. Think of the vault as a safety deposit box located in a state that does not charge sales tax (in PWCC’s case, Oregon). Your cards will be sent there and stored, and no sales tax will be charged so long as the card remains there for a certain period of time (not sure exact length but my guess is at least one year). Presumably the card is safe from fire, water, theft, etc. I am sure you will have to pay a monthly or annual fee to store the card in the vault. There may be some fee-break to you if you decide to sell any cards held in the vault with the vault owner/AH; at the least, you don’t have to pay the shipping and deal with the logistics of sending the card(s) to the AH, since they already have it/them in their vault. Personally, I have no issue with vaults, including PWCC’s, and I think that for some, particularly those “investing” in cards, the vault is a great tool.
Although I consider my collection assets, and I fully view them as investments, I have never used a vault. First, I want to hold the cards myself, look at them when I want, and sell/trade then quickly without logistical issue. Second, I don’t believe that any AH with a vault is the proper AH to sell cards in my collection, so I see no personal benefit on that front; my collection is all old and rare and PWCC, Goldin, and EBay tend to attract more shinny and modern stuff. Third, I just don’t feel comfortable trusting anyone else (or at least these options) with the care of my large store of value (my collection); let alone do I want to pay a fee to do so. That is not a knock on them specifically, but I like to control my own destiny and I think I would fell that way about most outfits other than banks and security companies. |
#7
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The primary, possibly only, reason to use a vault is to avoid owing and paying taxes. Personally I think this is commendable. I strongly support people doing everything they can not to have to pay off the state even more of their property. But avoiding taxes is exactly what these are for. I have no issue with the concept.
Avoiding taxes by keeping one’s property with a fraud ring though… well people who choose to do that will deserve what happens. |
#8
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Really...if you want to offer a service to store our valuable cards then why are these entities only doing it in states that have no sales tax? Were all the other states fresh out of room for a vault? Total silliness to call it anything other than what it is.
__________________
( h @ $ e A n + l e y |
#9
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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. |
#10
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__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 05-22-2022 at 08:06 PM. |
#11
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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! |
#12
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Now having said that, you're pretty much right on with your understanding. The "vault" is actually a fairly ingenious business idea that was initially based on the change in sales tax law back in 2018 from a Supreme Court case, South Dakota vs. Wayfair., and was really pushed when Ebay enacted a mandatory collection of sales tax on all sales on their platform as a result of that case. The idea is that by having your winning items sent directly to your PWCC "vault" (which just happens to be located in Oregon, one of the five US states that does not have a sales tax), their Oregon address is used to determine if there is any sales tax owed. And that doesn't just work for things won from PWCC. You can go to any AH or other sites and use the "vault" address as your shipping destination, and that is the address that is generally used for determining sales tax liability. Using a "vault" service also replaces the need for getting a safe deposit box or safe for home/office storage as well. An online file is supposedly created so the owner can go and view images of cards they have in the "vault" whenever they want. And my further understanding is that PWCC will also allow people using their "vault" to borrow money against the value of cards they have stored there. Which I think is maybe an even bigger factor than the sales tax savings in many cases. In other words, someone looking to cash in on surging prices of cards they own can send them to PWCC to put into their "vault" and consign them to PWCC to sell for them at the same time. The loan can get them their money now, instead of having to wait until their cards are auctioned/sold, and the buyer pays for them. Think of it as operating kind of like one of those payday loan places you see everywhere. The idea is to entice people to put cards into their "vault", and then let human greed and laziness take over. Since PWCC sells cards, once you've used their "vault" to save on some sales tax, or get that loan for cash you needed now, it is so easy to just contact them to consign and sell a card for you. You don't have to worry about the time and expense of listing the card for sale yourself, of shipping it to a buyer or other AH or consignor to sell for you, they'll even go ahead and send the card out for grading if you gave it to them raw. This basically creates an ever increasing pool of people and their cards that will use PWCC to sell for them. All of which PWCC gets to charge a commission on when they sell the card. What PWCC really wants is for a card they sell from their "vault" by one owner, to be purchased by another owner who also uses their "vault". In that situation, PWCC simply makes an entry in their system to show the card in their "vault" is now owned by a different person, and they still get to charge their full commission on the sale. It's like the old prostitute saying, "You got it. you sell it, you still got it......what a business!!!" The "vault" concept brings in future consignors/sellers, and is akin to PWCC having a perpetual inventory on hand, that they don't have to pay for. And the idea has already been copied by Goldin, which has established their "vault" in Delaware, another state without a sales tax. And even Ebay has bought into the concept and has established their own "vault" program as well. I don't know the full story behind Ebay's vault, but you can easily check into it online. Hope this helps bring you up to date, and gives you some background on, and the genesis of, the "vault" service concept. |
#13
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I have never heard of this before... this makes me laugh and think |
#14
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One of the other bad thing is if u pass away all of a sudden and no one in your family knows about "The vault" then obviously "The vault" would never contact your family they have something to be claimed.
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#15
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The actual old joke involved a certain ethnicity...which I'm not going for.
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#16
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And, Bob, let's not forget the cash only/no credit and tax free aspects of that particular vocation.
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#17
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Guess this can add new meaning to the term.......pimping the goods! LOL |
#18
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Asking for an opinion about PWCC on an N54 forum is pretty much like asking Fox News an opinion about Joe Biden.
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#19
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Now you have me wondering if prostitution is where realtors and used car salesman got the expression "previously loved."
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#20
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I've heard the term "well loved" used in regards to some cards by various people/AHs. Maybe an extension of that old saying as well? |
#21
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I like to receive my cards when I buy em.
Also, threat of loss, fire, theft, stupidity, fraud, etc too much for me. Send me my Mantle I'll take care of it Sent from my SM-G981U using Tapatalk |
#22
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It all depends when the margin call comes. What happens if values fall 50%?
What if the advance doesnt cover your future purchases. Also, what are the tax ramifications? Is this some sort of 1031 exchange for cards? Just too many new variables heating up the already white hot market. Sent from my SM-N950U using Tapatalk
__________________
"Trolling Ebay right now" © Always looking for signed 1952 topps as well as variations and errors |
#23
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I was going to mention values falling but I didn't want my post to be too long.
Yes, there is a risk that between the time of consignment and sale card values will fall so much that you will not be able to cover the advance. Also, I was not saying the advance would necessarily be used to cover other purchases...it could be used to cover the cost of a new hot water boiler. I guess I am just saying that if you sell $6K worth of cards you actually have $6k cash as a result and that an advance just means you are are getting $2k now and $4k later. There are of course other variables involved and in theory the prudent thing is to not get an advance and wait until the auction is complete and you have received your check before spending (or saving) the proceeds.
__________________
My avatar is a drawing of a 1958 Topps Hank Aaron by my daughter. If you are interested in one in a similar style based on the card of your choice, details can be found by searching threads with the title phrase Custom Baseball Card Artwork or by PMing me. Last edited by molenick; 05-23-2022 at 04:25 PM. |
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Quote:
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#25
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To be clear, I was not talking about tax-related issues (of which I offer no advice since I am not an expert).
Just commenting on cash advances made against future sales versus loans made against property being held in a vault. Maybe there is no difference, I was just bringing it up for discussion.
__________________
My avatar is a drawing of a 1958 Topps Hank Aaron by my daughter. If you are interested in one in a similar style based on the card of your choice, details can be found by searching threads with the title phrase Custom Baseball Card Artwork or by PMing me. |
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