Accepting orders from collectors in minnesota

mrearlygold · March 28, 2015 10:25PM

If we get a small buy it now order on ebay from collectors in Minnesota do we have to collect sales tax even if we are not in Minnesota? What other hoops do we have to jump thru for the privilege of transacting business?

Is there a way to deny orders on ebay that originate in Minnesota like we do with foreign countries?

rkfish · March 28, 2015 10:49PM

TextIs there a way to deny orders on ebay that originate in Minnesota like we do with foreign countries?

No.......

And just google coin dealer requirements for the state of MN.....you are required to have a MN dealer lic., bond, and collect/submit tax to MN on all sales if you do more than 5k a year in sales with residents of MN.

derryb · March 28, 2015 11:01PM

you have an ebay license, you're good to go.

The Minnesota business license requirement applies to bullion coin sales.

I include this in my description in hopes of discouraging Minnesota buyers: "Due to the new Minnesota Bullion Coin Dealer law restrictions, we cannot sell or deliver any gold or silver coins to Minnesota addresses. Be sure to thank your Minnesota state officials for making it difficult to sell bullion coins to Minnesota residents."

No way to deny orders on ebay for sales in another state other than to refund and not ship.

I doubt MN will attempt to extradite someone from another state over small amounts. Worst case MN would contact you wanting their money for a business license.

JohnHarper · March 28, 2015 11:40PM

I am a Minnesota registered coin bullion dealer representative. The bullion trading law has nothing to do with sales tax. If you avoided paying tax before, you can still avoid paying the tax. Yes, if you meet the sales volume requirements for the year, you need the license.

foodude · March 29, 2015 12:29AM

This topic has been discussed several times in this forum.

ITCA has information about the law on their website for thier members, including language that some are now including in their Ebay listings/etc. ITCA also provided free seminars at the November Baltimore show last year, and at this year's January FUN show.

Here is a link to the MN Department of Commerce Website: MN DoC

It is a very complex and difficult law to understand. I know some large dealers that spent significant money trying to understand the law through their attorneys. Some have registered, and some will now only do business with a registered MN Bullion Coin Dealer, including no business with MN collectors.

In regard to the $5000 threshold comment, it is for the aggregate of buy+sell. For example, if you buy from one party for $2500 and sell to another party for $2700, the $5000 threshold has been met.

The term "bullion coin" is defined by the law as "any coin containing more than one percent by weight of silver, gold platinum, or other precious metal." So an 1804 dollar is a "Bullion Coin."

The MN Department of Commerce has publicly announced 14 enforcement actions under the law. Most involve MN individuals or MN firms, with fines ranging form $0 to $250,000. Most receive no fine, a cease and desist letter, and their firm name and list of activities the State found improper publicly posted on the MN Department of Commerce website.

In February, a TX firm was fined $11,000 for “[engaging] in unregistered bullion coin dealer activity in MN by conducting multiple bullion coin transactions, and did not comply with sales practices requirements including failure to disclose the precious metal content on invoices.” $1000 of the fine was to be paid immediately, and if they registered within 60 days, $10,000 of the fine is waived. This dealer is now registered.

In January, an OH firm was fined $15,000 for “[violating] a 9/4/2007 Dept stipulation (File# SE2606568) by omitting required disclosure in advertisements and engaged in unregistered bullion coin dealer activity in the selling, buying, marketing, soliciting or delivery of bullion coins.” The other half was waived if they complied with the terms of the consent order.

There are currently about 100 dealers registered from MN, and about 15 dealers registered form other States (AZ, CA, CT, LA, MI, NH, OK, TX, WI).

edited to add: I have encountered several unhappy MN collectors at local shows that tell me national dealers that they have dealt with for years will no longer do business with them due to this law.

There are some exceptions to the law, including a person who engages only in transactions at occasional trade shows where the consumer is present and the transaction is made at the trade show" need not register. The term "occassional" is not defined in the statute, but the DoC seems fine with it being at least 2 (maybe more{?)). Many out of State dealers set up at the recent Norrthwest Coin Club show, and last years fall MOON show without any issues. Half of the MOON deaelrs werre from out of state. I did not count the numnber of out of state dealers at the Norrthwest Coin Club show, it may also have been half out of state dealers.

foodude · March 29, 2015 2:13AM

Regarding one of the original questions "If we get a small buy it now order on ebay from collectors in Minnesota do we have to collect sales tax even if we are not in Minnesota?" I have heard from several people that one of the out of state registered deaelrs has begun to collect sales tax for mail orders into MN if the purchaser is does not have a sales tax exempation certificte (or the like). I'm not sure if it has something to do with the MN Coin Deaelr Bullion law triggering some type of nexus, if they had a nexus already but now realize they do, or ...(?)

As has been pointed out above, the sales tax law which has been in place for years is a completely different law than the recent MN Coin Delaer Bullion law that in part went into effect on August 1, 2013; and in full effect on July 1, 2014.

derryb · March 29, 2015 5:59AM

Me mailing a coin to a MN buyer who purchased it online from my FL address is a business transaction that took place in the state of FL. Appears the state of MN is actually requiring out-of staters to have a MN business license to conduct postal transactions within the state of MN. Fighting this would be the proper way to deal with it once and for all. Doesn't seem it would be too difficult for an out-of-stater who never steps foot in MN to win court action on MN applying MN law outside of MN. Jurisdiction is the issue that should be addressed.

The issue really boils down to "are you doing business in the state of MN?" If you are located outside of MN (such as a storefront just outside the state lines) then you are not subject to MN business license requirements. If you were you would also be subject to paying MN sales tax on your sales. MN (and all other states) do not (and cannot) require an out of state seller to pay MN sales tax on an item purchased by a MN resident outside of the state of MN. They do require the resident to report and pay MN sales tax on the item (of course, no one does). This is the ammo to fight the "are you doing business in the state of MN" battle.

MN is applying one set of business license requirements to merchandise purchased out of the state and carried into the state by the buyer (no MN license required for the seller) vs. merchandise mailed into the state (business license required) while at the same time treating both scenarios the same when it comes to state sales tax (resident is required to report purchase and pay sales tax to MN). Again, the issue is one of interpreting "doing business in the state." Hopefully someone will force this into a court before more states get on board.

Accepting orders from collectors in minnesota

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