eBay vault

[SyrNy1960]

Originally Posted by Wite3

Horrible idea...especially if it is based in CA...ebay will charge you (of course) for the vault and I guarantee they will add things like insurance on top of that. I am fairly certain they will not let you self-insure (via something like Collectible Ins. Co.). Fire danger in CA, theft, earthquake, etc.

Not seeing the card in person is also weird to me, an old-school collector not an investor, but even as an investor, I want to hold it and see it.

What will it cost you to actually remove a card from the vault? A handling fee to find it and a shipping fee? More?

Ugh...hate where the "hobby" is going sometimes.

What about cards getting lost, damaged, or stolen in the vault, swapped out, etc. How many times have you received a card, even slabbed, that had issues. Not receiving the card, you will have to trust them. I’m also an old-school collector, and getting older, so maybe I just don’t trust change.

[FrankWakefield]

The Vault, to me, seems to be like a massive extension of the idea of putting a card in a slab.

My first thought was that it would be in California, where eBay is. And then I thought about earthquakes... West of the San Adreas would not be a good location.

If they build it, they need virtually no one knowing where it is, it would be a lucrative target for burglary.

The whole idea is a very close cousin to NFTs. You 'own' something you can't experience with any of your five senses. You can't see a ball card that's there, you only get to see a scan or picture that is floating around on the internet.

Next step will be do you want your collectables in The Original eBay Vault here on Earth, or The Lunar eBay Vault. And later, the The Mars eBay Vault. What do you reckon the sales tax is on Mars????

I agree with what's been posted about eBay providing a grading service; they'll be doing it all. And a day might come where they stop accepting cards unless they're graded by eBay Grading... No PSA / SGC / Beckett nor the rest allowed.

So, just when you think you've seen it all, out this comes; and then you won't ever get to see anything again.



For the sales / use tax... I think the sales tax is owed when it is bought, regardless of where it is stored or delivered. The seller charges the buyer, then remits it to the taxing entity.

[FrankWakefield]

A sales tax is collected by the seller. It's added to the cost of the buyer. It's remitted to the state where the sale occurred... And it's collected when something is sold, not delivered.

UNLESS the buyer is out of state. An out of state buyer will most likely owe a use tax on an item that is ineligible for the sales tax. The use tax is owed by the buyer back in his home state.

What eBay does, in an agreement with the states, is to collect a sales tax and pass that on to the correct state. Two things... I think it's wrong that they collect tax on shipping and handling, I don't think that's taxable in my state. Hell, if I buy stamps at my Post Office, Kentucky isn't getting a sales tax on that! Second thing, I bet in the massive agreement among eBay and the states, they send that tax money to the states every 30 days, 60 days, or something like that... probably has language about waiting to make sure the transaction between buyer and seller is completed and there aren't returns or problems. AND the real reason they'd do that is so eBay could have all of that tax money for a month or two or more and draw interest on the money, which eBay keeps. A month of interest on that may not be megabucks, but it would be free money for eBay made on other people's money.

Did cities that have a sales tax get a seat at the table with the states and eBay?

[Rhotchkiss]

Regarding the vault and sales taxes: rules require vendors to collect sales tax on buyers when (1) the item will be “consumed” (used, kept, stored) in a state that has a sales tax (maybe it’s technically a use tax), and (2) the vendor has done a sufficient level of transactions with the state to mandate sales tax collections. This latter reason is why smaller AHs like Sterling, Collector Connection, and even LOTG collect sales tax on items being sent to some, but not all, tax collecting states they send consignments to.

Delaware, Oregon, and a few others do not have sales/use tax. If a card is sent for permanent storage (consumption) to a no-tax state, the vendor will not collect sales tax. I am positive the card must remain in that state for a certain period (1-2 years maybe) after which tax will never be owed even if moved to another state; however, if moved before that period to another state, tax would be due to that other state. If located in a no-sales-tax state, The vault is the permanent storage that allows owners to avoid state tax. But the card absolutely must stay in the vault for a certain period of time. It is no different than buying a boat in Delaware and keeping it at a marina there - no tax due- and then 3 years later taking it to North Carolina.

Unlike the aforementioned smaller AHs, eBay is gigantic. It certainly must now collect sales tax in every state and a zillion times a day and file many, detailed tax returns often. The increased administrative cost to eBay for this new requirement must be massive. Did eBay increase its fees once it was required to collect sales tax? If not, that “tax” they collect on shipping and taxes, and the time value of money and the use of those huge taxes before having to pay them over (30, 60, 90 days) is likely how they are compensated for all of the increased cost they had to absorb.

One last thought- many folks here do not understand NFTs, but they do understand (although may not approve of) the vault concept. Well, they are kind of the same. While you have the right to own and hold a tangible card, when you use the vault, your ownership is really reduced to pictures on your phone and the knowledge that can go see it if you buy a plane ticket. NFTs are just pictures on your phone without being able to visit your card (bc it does not exist in a form you can touch and feel). Whether you agree with this comparison or not- to me, notions like vault certainly feel like gateway drugs to concepts like fractional ownership and NFTs.

[BobC]

Between Ryan's and my posts you should now have a pretty good idea of how sales tax works with these vaults, and why they put them in states with no sales taxes, if you didn't before already. (Nice post by the way Ryan!)

My original comment about Ebay's vault and sales taxes was because of what their website, that Steve posted the link to, said about how if you chose to take your cards out of the vault you would then be charged applicable sales tax. But as Ryan and I were pointing out, that shouldn't be the case if the cards you had in the vault are going to be kept in there for an extended period of time before you go to remove them. But Ebay's site in that link doesn't say they will ever stop charging you sales tax upon removal of your cards from their vault, regardless of how long you leave your cards in there. So that may be something that anyone thinking of using Ebay's vault might want to double check with Ebay on before signing up. And you can, and probably should, also ask the same questions of PWCC or Goldin if you're ever thinking of using one of their vaults as well, or for comparison purposes if you're trying to decide among them which one to actually use.

It is possible Ebay will stop charging you sales tax on vault removals after a specified period of time, but just didn't spell it out on that linked site. I'm guessing that won't be the case though, and that they will potentially hit you with a sales tax charge whenever you take something from the vault. And the reason I say that is because doing so helps generate more business for Ebay. If you have a card in Ebay's vault, and decide to sell it through an AH, you'll have to now pay the applicable sales tax to get the card out of the vault and over to the AH. But if you sell the card out of the vault through Ebay, you don't get hit with the sales tax, while Ebay gets their fees from the sale.

So if that is the clever/sneaky thing Ebay is doing to boost and retain even more business, keep that in mind if you're ever thinking of using a vault service, and then trying to decide among the different ones available, which would be best for you.