Question
AuctionByte has an article today about recent developments regarding States requiring some form of auctioneer licence for eBay and/or other online selling.
They seem to mostly apply to people who sell goods for other and the three States mentioned are Tennessee, Illinois and Ohio.
While those of us who live in other areas might not feel any immediate impact we should have some awareness of this issue as it will likely be coming to more States in the near future.
One specific concern of the Illinois regulation is that it seems to apply if the buyer lives in Illinois, even if the seller is elsewhere.
While none of this seems to apply if you are selling goods you own, the Ohio law has added some confusion to the issue by including some items purchased for resale.
Drop-Off Stores and Trading Ass'ts seem to be the most prominent sellers effected by these regulations but they are written to include even more casual selling for family, friends, neighbors or local businesses.
I wonder how they apply to drop-shipping or custom order arrangements as we don't actually own the goods at the time of the sale?
Just one more thing that makes me wonder if I shouldn't move to China where Meg says the future of eBay lies.
Link
Answer
It is a law that will be impossible to enforce on the casual sellers. The cost of enforcement will be too large to make it cost effective. Might have an impact on the large sellers. But the casual out of state ones, impossible.
Answer
Having grown up in the RL auctioneering business, there has been a decades~long vendetta by the various associations on anything they perceived as "infringing" on their services. I am actually surprised that this subject hasn't arisen before on a serious level. While it seems to be directed at eBay sellers, I would think that the "professional estate sale" operators are a much better target for what the auctioneers would like to accomplish....they have done FAR more damage to the auctioneering trade than eBay ever has.
Have to agree with Commentary......this will be directed at the drop off stores and most likely the antique shops & malls that offer eBay services much more agressively than it will ever hit casual sellers. It will be another co$t of doing bu$ine$$ that feeds the state coffers.
On the other hand, being listed as a Trading Assistant with eBay will be waving a red flag now, too.
Answer
It is a law that will be impossible to enforce on the casual sellers.
Easy to do. Hedge it against a C of O and you're dead in the water. Impliment a 2nd Hand Law/ordinance in your City or Town and boom! You've just bought a 1 million dollar bond to boot. Now a permit too, then the liscense number on your storefront visible to all. ..... and all that nice bookeeping to go with it. Copiers for paper work, record keeping etc. Sounds like fun. Been threatened with it already....
It's so easy and already on the books in many areas. It's just not enforced. Here, they are starting to to yearly on site inspections. Thank You NY.
Answer
You've got my interest, since I"m in Ohio. Here is a link to the text:
http://www.legislature.state.oh.us/b...?ID=125_SB_209
After reading through all the muck, it's confusing at best. I've sent an email and will post if I hear back.
But there is so much in that law that is conflicting, such as your license can be revoked if you don't display a sign at your place of business, etc., I do think it only applies to people who are accepting items on consignment. The purpose seems to be to protect the person who hands over their good to the auction seller more than anything else. That's why the requirements for the escrow accounts, having a signed contract, etc.
Or do I need to sign a contract with myself before I sell that next $4 book I bought at a library sale?
Answer
(B) As used in this section:
(1) "Goods" means goods, wares, services, merchandise, periodicals, and other articles or publications.
Answer
Well, I got a reply, a total non-answer IMO. I asked:
Hello,
There is a rumor going around that Senate Bill 209 now requires Ohio residents who purchase items from garage sales, estate sales, library book sales, thrift shops, etc., for resale on eBay to get an auctioneer's license. I believe it only applies to sellers who are accepting items on consignment, not sellers who purchase the items outright with no further financial obligation to the person who sold them the items.
Can you please clarify?
Sincerely,
Brenda
Here is the answer, which is a copy-and-paste of some of the portions of the new law:
Brenda:
Under SB 209 an auction is defined as the following:
Sec. 4707.01.
(A) "Auction" means a method of sale of real or personal property, goods, or chattels, at a predetermined date and time, by means of a verbal exchange, regular mail, telecommunications, the internet, an electronic transmission, or a physical gesture between an auctioneer or apprentice auctioneer and members of the audience or prospective purchasers, the exchanges and gestures consisting of a series of invitations for offers made by the auctioneer and offers by members of the audience or prospective purchasers, with the right to acceptance of offers with the auctioneer or apprentice auctioneer. "Auction" includes a sale of real or personal property, goods, or chattels in which there has been a solicitation or invitation by advertisement to the public for an advance in bidding using sealed bidding, provided that the bids are opened and there is a call for an advancement of the bids.
Further, R.C. 4707.02 provides the following:
No person shall act as an auction firm, auctioneer, apprentice auctioneer, or special auctioneer within this state without a license issued by the department of agriculture. No auction shall be conducted in this state except by an auctioneer licensed by the department.
The department shall not issue or renew a license if the applicant or licensee has been convicted of a felony or crime involving fraud or theft in this or another state at any time during the ten years immediately preceding application or renewal.
This section does not apply to:
(A) Sales at auction conducted by or under the direction of any public authority, or sales that either are required by law to be at auction, other than sales pursuant to a judicial order or decree, or that are conducted by or under the direction of a public authority;
(B) The owner of any real or personal property desiring to sell the property at auction, provided that the property was not acquired for the purpose of resale;
(C) An auction mediation company;
(D) An auction that is conducted in a course of study for auctioneers that is approved by the state auctioneers commission created under section 4707.03 of the Revised Code for purposes of student training and is supervised by a licensed auctioneer;
(E) An auction that is sponsored by a nonprofit or charitable organization that is registered in this state under Chapter 1702. or Chapter 1716. of the Revised Code, respectively, if the auction only involves the property of the members of the organization and the auction is part of a fair that is organized by an agricultural society under Chapter 1711. of the Revised Code or by the Ohio expositions commission under Chapter 991. of the Revised Code at which an auctioneer who is licensed under this chapter physically conducts the auction;
(F) A person licensed as a livestock dealer under Chapter 943. of the Revised Code who exclusively sells livestock and uses an auctioneer who is licensed under this chapter to conduct the auction;
(G) A person licensed as a motor vehicle auction owner under Chapter 4517. of the Revised Code who exclusively sells motor vehicles and who uses an auctioneer who is licensed under this chapter to conduct the auction.
If the activity conducted by person falls within the definition of auction above and they do not fall within the exemptions provided in 4707.02, the activity would require licensure under this chapter.
Sincerely,
XXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
Auctioneer Program/Enforcement Division
Ohio Department of Agriculture
********************************************
Here is what I take issue with, cutting out some verbiage from Sec. A:
(A) "Auction" means a method of sale of personal property, goods, at a predetermined date and time, by means of the internet, the exchanges consisting of a series of invitations for offers made by the auctioneer and offers by prospective purchasers, with the right to acceptance of offers with the auctioneer. "Auction" includes a sale of personal property, goods, in which there has been a solicitation or invitation by advertisement to the public for an advance in bidding using sealed bidding, provided that the bids are opened and there is a call for an advancement of the bids.
In the above paragraph, the first sentence defines what an eBay seller does, basically, though what constitutes a "series of offers" is not quite clear to me. However, the second sentence does not apply to eBay selling at all, as there are no sealed bids. So there are 2 conflicting definitions as to what an auction is.
Also, what is not included in her response was this from the law:
(G) "Auction mediation company" means a company that provides a forum through the internet for a person to sell the person's real or personal property that was not originally acquired for the purpose of resale via the submission of silent bids using a computer or other electronic device.
By definition then, eBay is not an auction mediation company, as eBay sellers often do list items for sale that were specifically acquire for the purpose of resale. Also, the bids are not silent.
Note this section:
No person shall act as an auction firm, auctioneer, apprentice auctioneer, or special auctioneer within this state without a license issued by the department of agriculture. No auction shall be conducted in this state except by an auctioneer licensed by the department.
By listing items on eBay, am I conducting auctions "within this state"? I maintain they are talking about an auctioneer who holds live auctions within a place of business in Ohio.
Sec. 4707.024. (A) Not later than seventy-two hours after the end of an auction, a person licensed under this chapter shall deposit in one or more trust or escrow accounts all money received from the sale of an owner's or consignee's personal property at auction unless the licensee pays the money to the owner or consignee immediately after the end of the auction.
And there are extensive sections such as this:
(B) For purposes of this section, a person licensed under this chapter shall designate a trust or escrow account that contains an owner's or consignee's money as "client trust account" or with words of similar meaning. In addition, a trust or escrow account only shall contain money received from the sale of personal property at auction that has not been disbursed and money for expenses regarding the auction, including commission and advertisement fees, that are specifically delineated in the auction contract.
And the law spells out in great detail what the auctioneer's responsibilites are and when they have to be executed in regards to the owner of the property.
All well and good, but when the "auctioneer" is actually the owner of the property...
So, I responded with this, although I thought my original question was simple enough:
Hi XXXXX,
Yes, I read through the text that you have so kindly incorporated below. Still, I found the information to be conflicting in places, which is why I needed clarification.
I still need some clarification. Let me put it more simply with a direct question:
Would a person need an auction license (and go through the requisite 12 months of apprenticeship with a licensed auctioneer) from the state of Ohio for the following activities:
1. Going to a library book sale, purchasing a book from the Friends-of-the-Library Organization for the advertised price of 25 cents to $1.00, with the intent of selling said book on eBay at an opening bid of $4.00.
2. Going to a garage sale, purchasing a book from the homeowner, for the advertised price of 25 cents to $1.00, with the intent of selling said book on eBay at an opening bid of $4.00.
3. Going to an estate sale, purchasing a book from the relatives of the deceased or the professional hired by the relatives of the deceased, for the advertised price of 25 cents to $1.00, with the intent of selling said book on eBay at an opening bid of $4.00.
Please note that all of the above activities would relate to a strictly mail-order eBay business. (No walk-in customers, no storefront, no on-site auction activity.)
Sincerely,
Brenda J. Grolle
********************************************
Yes, you read that right, in the state of Ohio you have to go through a 12 month apprenticeship with a licensed auctioneer, pass written exams, demonstrated thorough knowledge of both state and federal auctioneering laws, pay a large annual licensing fee, open an escrow account with either $25,000 or $50,000 depending on the circumstances that I didn't really understand or care to, etc, etc,
So I do not believe in any way shape or form that they mean that the person who is purchasing items outright to put up for auction on eBay or any other Internet auction site has to go through all that crap.
And if they do mean that, they are insane!
Answer
I'm thinking it doesn't apply to non commercials. But, the Second Hand Laws in your community may cover what that law doesn't.
This may help with more of the 2nd hand law/pawnbroker ideas..
http://home.earthlink.net/~pawnbrokernw/pa08003.htm
BTW, that law has been circulated since 2001
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Pardon my ignorance, but what are Second Hand Laws?
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Thanks for the link. I can't find anything in the Ohio Revised Code regarding "second hand", maybe if I spent hours searching, but...not going to do it.
Interestingly, what shows on the site is the Auctioneer laws prior to the Bill signing. The content there makes it clear that an auctioneer was someone who conducted live auctions. The current wording of the bill incorporates auctions via Internet.
I've never been to a live auction, but there are ads in our local paper one day each week. Many of the auctioneers do have websites and advertise that you can place bids via their website rather than having to attend in person.
Now, given that context, yes, the entire Bill does make sense. Someone who is running auctions via the Internet on their own commerical website would need an auctioneers license, and need to be schooled in auction law.
I can see why it would apply to the consigned merchandise as well as property the auctioneer bought outright for resale.
But any of us who purchase outright are not operating a business like that. Once we buy the merchandise, whether used or new, our obligation to the person who sold us the merchandise stops right there. It's ours to do with as we please, throw away, use it, or sell it. There are no clients who need an escrow account to protect their funds, no contracts that need to be signed, etc.
In fact, in another part of the Ohio Revised Code, they referred to the auctioneer and seller as 2 different people, without consideration that they could in fact be one and the same. That's where the problem with that exception clause comes in. It doesn't recognize the fact that many eBay sellers are both "auctioneer" (according to the new definition) and the seller.
The bulk of the Bill goes into great detail about the obligation the auctioneer has to his/her client (the owner and what the Bill considers to be the seller of the merchandise).
That has nothing to do with selling on eBay if you own the merchandise.
I've read the argument on another board that eBay is actually the auctioneer, not the individual seller. The seller is the consignee in that relationship, so the Bill wouldn't apply to the eBay seller anyway.
Nope, I'm not going there...don't want to make my head hurt...
Ramble over...