PWCC vault...explain

[Rhotchkiss]

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.

[G1911]

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.

[Lorewalker]

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.

[Johnny630]

The art of the fluff push up certain cards bought in larger quantities by investors buy the under cards push one high then higher then list the 8’s and 9’s relist pump and refresh creating a higher and higher comp while
profiting off the undercard which were already bought up by the investors…I give them credit it worked for a good long while…vaults have other collateral purposes…

[swarmee]

Originally Posted by Lorewalker

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.

COMC is a vault service that pre-dates PWCC's. And it is in Washington state, which has sales tax. So they're not all created for that reason.

[GregMitch34]

thanks for the lengthy reports

[BobC]

Originally Posted by swarmee

COMC is a vault service that pre-dates PWCC's. And it is in Washington state, which has sales tax. So they're not all created for that reason.

Very true, but with PWCC, they expanded the original concept/idea to take advantage of people's greed to attract more potential customers/clients/consignors with the possible sales tax savings. And then adding in the possibility of loans on cards held in the "vault", they pushed things even farther to attract more people. COMC never went to that level, they did their concept to make it easier for people to consign and sell. PWCC's efforts and additional push to expand their customer/consignor base is also why you'll more likely see cards selling for thousands, and even tens of thousands of dollars, on PWCC, but very unlikely ever sold for such prices on COMC.

I could be wrong, but they seem to be going after somewhat different markets, even though they are both into selling cards online. Your comment is still very true though.

[chjh]

"And then adding in the possibility of loans on cards held in the "vault", they pushed things even farther to attract more people."

Nothing wrong with asset based lending.

Most AH provide loans against cards. Most industries offer asset based lending. PWCC doesn't require the loan. They only offer it as a service if someone needs it.

[BioCRN]

Originally Posted by Rhotchkiss

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

I've sent stuff directly to vault, removed them hours later for shipping, and have never been charged sales tax (my state has it). The minimal vault fee has been extremely less than the possible sales tax.

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.

[Peter_Spaeth]

Originally Posted by BioCRN

I've sent stuff directly to vault, removed them hours later for shipping, and have never been charged sales tax (my state has it). The minimal vault fee has been extremely less than the possible sales tax.

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.

You still owe the tax, unless you choose tax evasion. It's an issue for YOU, not PWCC. Did you really think it was that easy for you to evade taxes? Your state isn't that dumb.

[mrreality68]

I believe the vault concept has some merits and they were mentioned above.

For me however I would not use one for some of the reasons that Ryan mentioned.
In addition I am least comfortable at this point using the vault at PWCC because of their past reputation. Until those concerns are put to rest I would hold off.

They do have amazing inventory and their prices seem to get amazing returns for their sellers but the way they achieve/ or achieved that leaves me on the sidelines.

[BobC]

Originally Posted by Peter_Spaeth

You still owe the tax, unless you choose tax evasion. It's an issue for YOU, not PWCC. Did you really think it was that easy for you to evade taxes? Your state isn't that dumb.

BioCRN,

What Peter is saying is true. My prior post was to spell out for you the story behind the issue and how it works and is likely perceived by various states. He's just more succinct and direct than I am. LOL I wanted you to understand the issues behind this a little better, and so you realize these "vaults" are, as I mentioned in an earlier post, often times taking advantage of human greed and laziness to pull in more people. And they aren't necessarily concerned with what they are proposing being 100% legal because technically, as Peter alluded to, the issue is mostly on you and not with the "vault" operator.

See, the sales tax is to either be collected and remitted by the seller of something, or paid by the buyer as what is then termed "use tax" if the seller was not otherwise required to collect and remit the sales tax. But if you buy something from say an AH or on Ebay, and have it sent to a "vault", that "vault" operator is not the buyer or the seller, and so really has no responsible for collecting or remitting sales tax, whatsoever. And if you subsequently ask them to send you your cards, that isn't a sale either, so they have no sales tax liability on just sending you your own cards. Now you may ask, "Yeah, but what if I purchased the item through PWCC and then had them put it into their "vault" for me, aren't they then the seller also, and possibly potentially liable for collecting and remitting the sales tax as such?" That might be true if these "vaults" are not set up as entirely different and separate entities from PWCC and Goldin's sales/auction entities. And trust me, they are going to be separate legal entities for liability and other protections, just like this sales tax issues and question. That is why I suggested you ask the "vault" operator you are using what they are/will do to protect you should the sales tax people come looking and calling. Otherwise, maybe think about at least leaving your cards in the "vault" a little longer before taking them out and home with you, and come up with and have ready a reasonable and believable story as to why you then suddenly did take your cards out of the "vault", aside from "So I could get out of paying sales taxes!".

[Carter08]

Originally Posted by Peter_Spaeth

You still owe the tax, unless you choose tax evasion. It's an issue for YOU, not PWCC. Did you really think it was that easy for you to evade taxes? Your state isn't that dumb.

I may agree with the end result but I think the issue is a bit more nuanced.

[BioCRN]

Originally Posted by Peter_Spaeth

You still owe the tax, unless you choose tax evasion. It's an issue for YOU, not PWCC. Did you really think it was that easy for you to evade taxes? Your state isn't that dumb.

Yeah, it's not a big deal for me and if they come for the loot they'll get it. My buying/selling isn't tied to a business and I can cover any personal liability if I choose to not directly address the issue.

I'm just sharing my experience of how the vault has been operating as far as requesting the cards being shipped to me and how long (or short, in this case) of time between being in the vault and being shipped.

Every piece of tax sketchiness (all of it from accident or oversight, btw) I've been involved in has been easily solved by agreeing to pay a lesser amount than I'm owed and without penalty anyway. This has all been personal liability not tied to a business, though.

[molenick]

I agree that using credit cards to buy collectibles is spending money you don't have (although I guess buying anything with credit cards is spending money you don't have).

I think of a cash advance against a consignment as a little different. If I consign what the auction house and I agree to be $6K of cards and they agree to advance me $2K then this is essentially a no interest, collateralized loan which the auction house and I agree will be paid back in full in a few months using the proceeds of the sale. The end result is that I have $2K now and $4k later to spend on whatever I choose to spend it on (as opposed to having $6K later). Either way it is based on the proceeds from actually selling the cards...not based on the cards merely existing somewhere in a vault.

I think (maybe?) this is different from money borrowed against cards someone is holding for me but which I have not agreed to sell. That is more like a home equity loan, where you borrow money against the value of your house but are not actually selling your house. In that case, I do think of it as a credit card scenario and in a sense as "money you don't have").

I could be wrong, just my take on it.

[BobC]

Originally Posted by BioCRN

I've sent stuff directly to vault, removed them hours later for shipping, and have never been charged sales tax (my state has it). The minimal vault fee has been extremely less than the possible sales tax.

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.

That is a good, and very interesting, question. It has been discussed on here before, and some have said they thought that there was supposed to be a sales tax charged by the company operating the "vault" they were using if they went to take the cards out and have them sent to themselves. I, and others like Ryan, have stated that it is probably not going to happen as the sales tax laws, which vary from state to state, are not really clear on that topic. Think about it, no state is going to come in when a family moves into it from another state, and start going through all their belongings and furniture, etc., they brought with them to see if they can get some sales tax out of them.

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!

[Peter_Spaeth]

I only read it quickly but PWCC's FAQ on its vault now makes no mention of sales tax. I think it used to. If they are steering clear of the issue, that's smart of them.