LUXURY & RE-SALE TAX ABUSE - by Vintage Vinyl Recording Dealers?
Dave U. Random
The buck stops here and the black birds on the wire poles are chattering
about? In light of the Federal and States budget
crisis (Health Care reform) both the Internal Revenue Service and the
individual States Tax Franchise boards need to scrutinize these record
dealers who claim purchases for re-sale (claim a tax exempt status) then
keep them tucked nice in snug on their plywood records shelves.
A well known Pacific Northwest collectors' purchase of a $10,200.00
record, (Reported in Krause Publications, Issue September 2009
"Goldmine" Magazine) (see:
http://www.urbanartantiques.com/2009/john-tefteller-wins-record-on-ebay-issues-press-release)
poses ethical the question isn't the purchase subject to a luxury tax?
But importantly there is the possibility abuse of record dealers
claiming their big dollar purchases for re-sale then claiming a loss or
tax exempt re-
sale status on the purchase is that fair to the ethical dealers who play
by the rules? Record dealers who enter into quid pro quo deals should
have their tax exempt records audited (IRS and state). Now this doesn't
imply that the gentleman was in violation but it does raise flags. Taxes
are taxes but when a person lauds their purchase it should go under Big
Brother's microscope.
So -
A. Isn't a substantial purchase of recording over $10,000 liable to
Federal or State income tax under the purchasers under current taxation
laws? What about purchases that go overseas they should be liable to the
tax laws? How about $5,000+ records coming into the USA, what is the
taxation status?
B. The buck stops here. Please take a good look at Stephen M.H.
Braitman's article in the October 2009 issue of "Goldmine"
(Krause Publications) and look carefully at Braitman's wording.
Pretentious writing but explicit into the de facto of record dealers.
One thing that bothers me about this article is Braitman explicitly
states a dealer duping an ignorant man/woman out of rare record then
quickly turned a profit for it on eBay. Any ethical seller of rare
recordings would tell the owner the luck of having a record worth a
fortune, right! Wrong. In the record collecting business there are two
groups - the ethical and the unethical. Whereas the ethical is likely to
inform the owner that they have a potential record worth $5,000 or even
$35,000.00 and represent him or her to an ethical auction house like
Collect.com, Butterfields, Bonhams, Christies, etc. It's tiring to hear
certain dealers dupe/lure/cheat, the ignorant owner into peanuts then
turn a hefty profit. In other words there needs to be a stop to these
dealers fucking people out their potential retirement nest
eggs.(Braitman's article doesn't mention an ethical transaction at all,
mysteriously and take n o t e).
C. Then there is the issue of a record dealer abusing their re-sale
business license by claiming their purchase as re-sale
(tax exempt) avoiding state mandated taxes. So both IRS and State tax
franchise boards should scrutinize business re-sale licenses and see if
they are paying their fair share. Or record dealers taking advantage of
the system. This could best achieved by IRS agents watching eBay sales
and thumbing through trade magazine like Goldmine and the price guide
advertisements.
D. Contact your legislature representatives, inform them to scrutinize
eBay. Is eBay/Paypal abiding by the IRS rules of reporting purchases of
over $10,000. Inform your legislature that the standard should be
lowered to $500.00 and should be taxable. When the purchaser claims a
re-sale then flags should go up.
E. Finally those that are in violation that is misreported items should
be seized by the IRS or State Tax boards.