eBay vault

[mrreality68]

PWCC, Goldin, and now EBay.

The more the merry

I think I am will turn my basement into a vault

[x2drich2000]

But is the Ebay vault in a tax-free state that will allow buyers to circumvent taxes? And has anyone else ever had the thought of what would happen if one of these vaults, or PSA, or SGC's buildings ever had a fire?

[BobC]

Originally Posted by x2drich2000

But is the Ebay vault in a tax-free state that will allow buyers to circumvent taxes? And has anyone else ever had the thought of what would happen if one of these vaults, or PSA, or SGC's buildings ever had a fire?

Ebay's US headquarters are in San Jose, CA, definitely not a tax friendly state. And San Jose is in Santa Clara County, that has a sales tax rate of 9.875%. Yikes, that's near the top sales tax rate in the country, which may be in Tennessee with an average overall state sales tax rate of almost 10%. California's average rate is 8.618%, but as noted, much higher where Ebay's headquarters are.

So, assuming Ebay wouldn't be dumb enough to put their vault somewhere with an almost 10% sales tax rate, where do you all think they put it?

The five states with no sales taxes are; Alaska, Delaware, Montana, New Hampshire, and Oregon. I don't see Alaska or Montana being in the running, due to their being out of the way and more remote. Not feeling too strongly for New Hampshire either, sort of a gut feeling. If they do open their vault in a non-sales tax state, I think it comes down to Delaware or Oregon, and I'm leaning towards Delaware, if I were a betting man. Curious to hear what others may think. and why.

[icollectDCsports]

Originally Posted by BobC

Ebay's US headquarters are in San Jose, CA, definitely not a tax friendly state. And San Jose is in Santa Clara County, that has a sales tax rate of 9.875%. Yikes, that's near the top sales tax rate in the country, which may be in Tennessee with an average overall state sales tax rate of almost 10%. California's average rate is 8.618%, but as noted, much higher where Ebay's headquarters are.

So, assuming Ebay wouldn't be dumb enough to put their vault somewhere with an almost 10% sales tax rate, where do you all think they put it?

The five states with no sales taxes are; Alaska, Delaware, Montana, New Hampshire, and Oregon. I don't see Alaska or Montans being in the running, due to their being out of the way and more remote. Not feeling too strongly for New Hampshire either, sort of a gut feeling. If they do open their vault in a non-sales tax state, I think it comes down to Delaware or Oregon, and I'm leaning towards Delaware, if I were a betting man. Curious to hear what others may think. and why.

Catching up on the vault issue. Does the location of goods determine which state's sales tax is implicated instead of the location of the parties to the transaction? Thank you.

[asphaltman]

Again....vault. Stupidest idea ever.

[GasHouseGang]

Originally Posted by asphaltman

Again....vault. Stupidest idea ever.

No, no, Dave. You just don't get it. You never have to touch your cards or deal with them in any physical way. It's perfect for the infirmed, homeless, or mentally unstable. Isn't that great?

[Jewish-collector]

How about a net54 vault ?

[butchie_t]

Originally Posted by GasHouseGang

No, no, Dave. You just don't get it. You never have to touch your cards or deal with them in any physical way. It's perfect for the infirmed, homeless, or mentally unstable. Isn't that great?

I can identify as unstable. But I still like to fondle my cards. Sorry, said the quiet part out loud.

[SyrNy1960]

Originally Posted by asphaltman

Again....vault. Stupidest idea ever.

I guess it's ok with some, but for me, I want to have my collection with me, so I can enjoy it.

[BobC]

Here's one possible positive outcome from people using vaults, it makes it much more obvious and clear that people holding their cards in vaults instead of at home are considering them as true investments and not just hobby collectibles. The big federal tax difference between selling a true investment, like stocks and bonds, versus selling a hobby collectible, like baseball cards, is that the current maximum federal long term capital gains tax rate for selling investments is 20%, but 28% for selling a collectible.

And long term means you would have had to own the stocks or cards for at least a year or more for these capped max rates to be applicable. If you own either for less than a year before selling for a profit, the profit is all just ordinary taxable income, subject to whatever the max individual income tax rate is, which is currently at 37%.

So let's say someone has a card that has been sitting in a vault for well over a year, and they sell it for a $1 Million profit. Currently, the IRS would likely say all baseball cards are collectibles by definition, and therefore the seller could owe up to $280K of federal capital gains tax from the $1M profit on selling the card. But if they could successfully argue to the IRS that their baseball card they sold was actually held as a true investment and not as just a collectible, the max federal capital gains tax on that $1M profit would only be $200K, an $80K difference to the seller's/taxpayer's advantage. To my knowledge, I've not yet heard of a case where someone has made such an argument, and prevailed. I suspect the 8% spread between the max federal long term capital gains tax rate between investments and collectibles likely doesn't generate enough of a potential tax savings for someone to want to take the risk on the legal cost and expenses, plus potential interest and penalty charges, of taking up such a fight with the IRS. At least not yet. But with the continuing rising prices of cards, it seems like it is only a matter of time before someone does try to make this argument with the IRS and claim a 20% max federal tax rate on the profit from selling a card. Who knows, if questioned by the IRS about taking such an investment versus collectibles stance, upon presentation of enough supporting evidence, like always having kept the card sold in one of these vaults, the IRS could surprise people and agree with the taxpayer's argument and just acquiesce the point. But somehow I doubt they would. LOL

Of course, this entire point is moot if the person selling the card operates as a dealer in business, and the card being sold was currently part of their business inventory. In which case the net profit from the card sale is all just ordinary business taxable income, and there are no maximum federal capital gains tax rates involved.

[BobC]

Originally Posted by icollectDCsports

Catching up on the vault issue. Does the location of goods determine which state's sales tax is implicated instead of the location of the parties to the transaction? Thank you.

In the case of an online/internet sale, the sales tax is charged on where the purchased item is being shipped to, which is supposedly where the item is to be used/kept. In other words, where the transfer of ownership normally occurs.

You buy something online from a local card shop one state over, and if applicable, they are supposed to charge you sales tax for the state they sent the card to, because that is supposedly where you actually take possession of your card when you open your mail. But let's say you are on a trip in this other state and you happened to walk into this same LCS and buy this card in person and take it with you. Now the LCS will charge you sales tax based on the state they are located in, because that is where you bought and took actual possession of the card. See the difference?

This doesn't work like this for really big ticket items like cars though. Even if you drive to another state to pay for and pick up a car, the sales tax will be based on where the car ends up being registered at and ultimately kept.

[Eric72]

Originally Posted by BobC

...This doesn't work like this for really big ticket items like cars though. Even if you drive to another state to pay for and pick up a car, the sales tax will be based on where the car ends up being registered at and ultimately kept.

An increasing number of sports cards are more expensive than sports cars.

[BobC]

Originally Posted by Eric72

An increasing number of sports cards are more expensive than sports cars.

LOL

Very, very true. The thing with cars is they have to be licensed and registered in the state/city they're going to be housed and used in. So those are easy to track and catch. Someone driving over a state/county line to buy and pick up say a living room set for a few grand isn't that easy for state auditors to always find and catch. So buying cards in card shops in states with no sales tax can save you money. Try to use cash so you leave as small a footprint as possible.

[icollectDCsports]

Originally Posted by BobC

In the case of an online/internet sale, the sales tax is charged on where the purchased item is being shipped to, which is supposedly where the item is to be used/kept. In other words, where the transfer of ownership normally occurs.

You buy something online from a local card shop one state over, and if applicable, they are supposed to charge you sales tax for the state they sent the card to, because that is supposedly where you actually take possession of your card when you open your mail. But let's say you are on a trip in this other state and you happened to walk into this same LCS and buy this card in person and take it with you. Now the LCS will charge you sales tax based on the state they are located in, because that is where you bought and took actual possession of the card. See the difference?

This doesn't work like this for really big ticket items like cars though. Even if you drive to another state to pay for and pick up a car, the sales tax will be based on where the car ends up being registered at and ultimately kept.

Thanks for this explanation and all of the tax education you provide this forum.

[Gorditadogg]

Originally Posted by mrreality68

PWCC, Goldin, and now EBay.



The more the merry



I think I am will turn my basement into a vault

We're living in a flippers paradise.

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