Storage Auctions

Resale License

Resale License
« on: February 06, 2012, 06:55:19 AM »
Good morning and good Monday,
Do you need a resale license to be a regular seller on Ebay or a regular seller at local thrift stores/flea markets, etc.?

Offline Cobia

  • ******
  • 1144
    • View Profile
Re: Resale License
« Reply #1 on: February 06, 2012, 07:11:40 AM »
Good morning and good Monday,
Do you need a resale license to be a regular seller on Ebay or a regular seller at local thrift stores/flea markets, etc.?

No, A resale license is really only needed if you intend to do storage auctions as part of a larger licensed business, like operating your own thrift store. The main purpose of a resale license is to save you from having to pay sales tax on the inventory you purchase (storage lockers) because you are required by law to collect sales tax from your customers for all inventory you sell. Basically it's used so your not taxed coming and going.

Look around the forum, you will find information as to the threshold of sales per year from Ebay required to be reported to the IRS, after a certain level of sales (dollar amount) I believe Ebay will send you a 1099 for the year, others on here may have more info on Ebay sales and tax implications.

Flea markets vary from state to state and location to location. Some flea markets are true "free markets" where the responsiblility is totally on you to "do the right thing" and report your income and collect sales tax. Some flea markets have a mechanism for charging you a vendors permit and daily sales tax reciepts. There has been talk of a few, rare, instances of flea markets or vendors malls requiring business licenses and liability insurance to sell on thier property.

Hope this helps...

Re: Resale License
« Reply #2 on: February 06, 2012, 10:24:37 AM »
Thank you Cobia.  Your response brings me to another question. Although I have attended a couple of auctions, I have not purchased a locker yet.  If you do, do you have to pay sales tax on it? 

I am hoping to start buying lockers within a week or two..... 8)

Re: Resale License
« Reply #3 on: February 06, 2012, 10:33:55 AM »
Thank you Cobia.  Your response brings me to another question. Although I have attended a couple of auctions, I have not purchased a locker yet.  If you do, do you have to pay sales tax on it? 

I am hoping to start buying lockers within a week or two..... 8)

Depending on your state, yes.

You are *supposed* to pay sales tax, but some facilities have been known to not bother collecting it. I wouldn't count on that though. Better to be safe and assume they will charge it. Figure that into your math when deciding what you would want to pay for a locker.

Offline Cobia

  • ******
  • 1144
    • View Profile
Re: Resale License
« Reply #4 on: February 06, 2012, 10:47:19 AM »
Thank you Cobia.  Your response brings me to another question. Although I have attended a couple of auctions, I have not purchased a locker yet.  If you do, do you have to pay sales tax on it? 

I am hoping to start buying lockers within a week or two..... 8)

Charging sales tax on units won at "Public auction, public outcry, or lien sales" seems to be a fuzzy area concerning what the law says. Regardless, be prepared to pay sales tax on top of the bid price at some facilities. In my part of the country there is only two corporately owned storage companies that charges sales tax on top of the winning bid price. The other corporate facilities and independent facilities do not charge sales tax. There is also another charge to be aware of and it's called the "buyers premium". In my area it's generally 10% on top of the winning bid. Like sales tax, some facilities have a buyers premium, some don't. Generally the buyers premium is meant to be a little more gravy for the profeesional auctioneer running the auction. Sometimes you might find a facility were the owner or manager is running the auction and adds a buyers premium, although this practice is pretty unscrupulous, it's just one of those things you gotta put up with to play the game. In my area, I have yet to see a facility charge sales tax and a buyers premium together, but I know it happens in other parts of the country. Be on the look out for the last hidden charge, cleaning deposits. Typically around $50 per unit. You get the money back once you clean out the unit, but while you are bidding on units you must keep this additional charge in mind as part of the overall price of the unit when it comes time to pay.

If all three charges are in affect where I live that takes a $500 unit up to $650, yikes!

Re: Resale License
« Reply #5 on: February 06, 2012, 12:43:55 PM »
Cobia and Matches already answered your question but I'll do so also.

Large corporate type auctions normally charge sales tax.  Small units that use an auctioneer normally charge sales tax.  However, not all facilities charge the sales tax.  IMO it's stupid to pay tax on something that has already been taxed once but I degress.

Ask up front if they charges a "buyers premium", "sales tax", and "cleaning deposit".  They should tell you all this before the auction, but I've been to a number that don't.  Also be aware that the sales tax is AFTER the BP if there is one normally.  So you can have these types of scenarios:

Figure $100 bid for a unit, 10% BP, 7% sales tax, $50 deposit (some charge this PER UNIT).
1) No deposit, tax, bp == $100
2) No deposit, w/ tax == $107
3) No deposit, w/ bp and tax == (100 * 10%) * 7% = $117.70

So if you get a facility that has all 3.  You could be looking at $167.70 for a $100 unit till you get your deposit back.  Here is a real world example from units buddy purchased the other week.  This place charges a 10% bp, 7% tax, and $50 per unit cleaning deposit.  He won 3 units that day.

Unit 1: $300 bid
Unit 2: $175 bid
Unit 3: $250 bid

He spent a total of $725 in bids + $72.50 bp + $55.83 (tax on bid + bp) + $150 (deposit) = $1003.33


Know the rules before you bid.  I've seen a few newbies be surprised that the $150 locker they won cost them $176.55 instead of the $150 they "thought" they were paying.

Re: Resale License
« Reply #6 on: February 06, 2012, 01:13:43 PM »
Had no clue.  Thanks everyone for the replies.


question
Paying Sales tax vs Resale License

Started by Jags

6 Replies
2768 Views
Last post October 16, 2011, 02:44:44 PM
by Jags
xx
Yearbooks? License Plates?

Started by Fayettenam Man

4 Replies
1814 Views
Last post September 02, 2013, 06:36:58 PM
by Adam
xx
License Plates Worth Keeping? Is it okay to resell them?

Started by rulesforrebels

4 Replies
2478 Views
Last post May 04, 2011, 08:08:08 PM
by Travis
xx
All around resale.

Started by foulup

0 Replies
2466 Views
Last post December 15, 2010, 06:15:26 AM
by foulup