ce what you can & what you can't 2011 (rev)

WHAT YOU CANWHAT YOU CAN’T

Continuing Education 2011

In this class

We will be reviewing the state and federal laws governing what you can and what you cannot sell as they relate to the following thirteen state :

Alabama – Arkansas – Georgia – Illinois Indiana – Kentucky – North Carolina South Carolina – Tennessee – Texas Virginia – West Virginia – Wisconsin

….and,

We will review federal regulations regarding:

Tax exemptions information and data security

The states we will be discussing today all have continuing education requirements

for their auctioneers.

General Topics

Alcohol, Firearms and ExplosivesAlcohol Sales at AuctionFirearmsFireworks

Wildlife and TaxidermyLive animalsDead animalsFurs

General Topics

Rights and CopyrightsAbove the groundBelow the groundIntellectual property and copyrights

Household ItemsMattresses and PillowsHazardous Materials

ALCOHOL

Control States (ABC) – Monopoly States

All states control alcoholic beverage sales but there are 21“monopoly” states. Those monopoly states with auction licensing CE are:

Alabama – North Carolina –

South Carolina – Virginia – West Virginia

A review of the differences between these states is available at:http://en.wikipedia.org/wiki/Alcoholic_beverage_control_state

Alcohol

Private Sale States will include:

Arkansas – Georgia – Illinois – Indiana – Kentucky – Tennessee – Texas -

Wisconsin

Alcohol and Tobacco Tax and Trade Bureau (TTB)The tax stamp people: they mostly regulate wholesalers

http://www.ttb.gov/about/mission.shtml

….and they want their tax money!

alabama

20X7.08 Alcoholic Beverage Purchases By Communication Services.

All sales, deliveries, purchases or supplying of alcoholic beverages to consumers by wire, Internet, order forwarding, telephone or telegraph gift services, or related communication services are prohibited, whether interstate or intrastate.

Author: ABC Board Statutory Authority: Code of Ala. 1975, §28349. History: Repealed and New: Filed August 21, 1998; effective October 16, 1998. Amended: Filed May 2, 2001; effective

June 6, 2001.

arkansas

Wine Charitable Auction Permit

authorizes qualified temporary permittees to sell sealed bottles of wine at a charitable auction. There is no limit on the amount of wine that may be sold under each separate wine charitable auction permit. The same organization may not obtain more than two such permits during any calendar year. The permit shall have a duration of not more than five days; (Adopted 8-17-05)

georgiaGA: 560-2-11-.03 Charitable Auctions; Wine.

(1) Bona fide non-profit charitable and civic organizations desiring to sell Wine at auction, may apply for, on forms provided for by the Commissioner, a temporary special use permit authorizing the organization to auction Wine in an unbroken package for consumption off premise only, for a period not to exceed three (3) days.

Applications for the temporary special use permit must include:

1. A copy of an official document such as non-profit certification by the Internal Revenue Service or constitution and by-laws of the organization, or a corporate charter which clearly states the purpose of the organization.

2. A letter of authorization or a local permit issued for the event from local governing authorities.

georgia

Alcoholic Beverages may not be donated to a non-profit charitable or civic organization unless the organization has the appropriate state special use temporary permit;

The amount of such donations shall not exceed the amount necessary for the event for which a permit has been obtained.

georgia

The non-profit charitable or civic organization holding a temporary special use permit may ship or otherwise transport Wine, donated by a person who does not currently hold a license that has been issued by the Department pursuant to this Title or Wine donated by

a Georgia licensed Retailer, to the location specified in the temporary special use permit.

georgia Prior to the commencement of the event for

which a temporary special use permit has been issued, the bona fide non-profit charitable or civic organization shall furnish a detailed inventory of the Wine to be auctioned to the Commissioner, including:

(a) The name, address, telephone number, and Taxpayer Identification Number of the person who furnishes the Wine for the event;

(b) The type, Brand, Brand Label, and quantity of each Wine to be sold at auction.

georgia Georgia excise tax is due on all donated

wine. In the event the bona fide non-profit

charitable or civic organization cannot verify that Georgia excise tax for the wine was previously paid to the Department within ten (10) days of the conclusion of the permitted event, the bona fide non-profit or charitable civic organization shall pay to the Department the appropriate excise tax as required by law on Form ATT-75.

georgia

No more than six (6) temporary special use permits may be issued to an organization in any one calendar year.

illinois

Alcohol sales are permitted at auction by special permit:

http://www.state.il.us/lcc/DOCS/SpecialtyLiquor.pdf

indiana Sec. 3.5. A wine wholesaler may sell wine purchased from an estate sale only if the

following requirements are met:

(1) The primary source of the wine sold at auction:

(A) is authorized to sell wine in Indiana on the date the wine is resold by the wholesaler;

(B) is given notice of the purchase by the wine wholesaler; and

(C) authorizes the wine wholesaler to resell the wine purchased.

(2) The seller of wine at auction is a bona fide estate of an Indiana decedent.

(3) Each wine bottle is affixed with a sticker indicating that the wine was purchased from an estate. The notice given to the primary source under subsection (1) must include the following information: The name of the seller. The amount of the product purchased and the sale price at auction. The vintage of the wine purchased.

A wholesaler is not liable for product liability for wine that the wholesaler sells from an estate auction purchase.

kentucky

By Special Permit:

http://www.lrc.ky.gov/krs/243-00/036.PDF

north carolina

By permit in approved areas:

http://abc.nc.gov/PERMITS/special.aspx

Once upon a time, Wendell sold some collectible whisky at an

online auction site.

tennessee

Alcoholic Beverage Collector

The AG says: An alcoholic beverage collector, who is also a licensed auctioneer, may sell his or her collectible alcoholic beverages at auction, so long as the auctioneer/collector and all bidders are present in person and within sight and sound of each other while the auction is conducted.

Full Opinion: http://www.tn.gov/attorneygeneral/op/2009/op/op09-177.pdf

tennessee

Special Permits: The TN ABC issues special occasion permits to charitable, religious, or education organizations meeting the statutory requirements. For more information related to each of these licenses and permits:

http://www.tn.gov/abc/licensing%20-%20special%20occasion%20lead%20page.shtml

texas

By Permit:

Gifts to charitable auction permittees by licensed package stores are authorized under the Alcoholic Beverage Code, Chapter 53.

virginia

By Permit:

http://www.abc.virginia.gov/enforce/forms/banquet.pdf

wisconsin (11) AUCTION SALES. The sale by an auction house at public

auction of a collection of sealed bottles of intoxicating liquor or unopened beer cans for the purpose of settling an estate or disposing of the collection or the auction sale of sealed bottles or containers of wine or of unopened bottles of intoxicating liquor or fermented malt beverages by a charitable organization, as defined in s. 440.41 (1), at an auction held to raise money for the charitable organization.

(11m) WINE COLLECTORS. The sale by a wine collector to any other wine collector of manufacturer−sealed bottles or containers of wine that the selling wine collector has held for at least 8 years if the selling wine collector has provided prior notice of the sale to the department. No more than one sale in any 12−month period may be conducted by a wine collector under this paragraph.

Cross−reference: See also s. Tax 8.03, Wis. adm. code.

firearms and explosives

18 U.S. Code – Section 923a

Engaging in the Business of Dealing in Firearms

http://www.atf.gov/regulations-rulings/rulings/atf-rulings/atf-ruling-96-2.pdf

Regulations by state

http://en.wikipedia.org/wiki/Gun_laws_in_the_United_States_(by_state)

ATF Federal explosives regulations promulgated by the Bureau of Alcohol,

Tobacco, Firearms and Explosives (ATF) define two general categories of fireworks sold in the United States: “display fireworks” and “consumer fireworks.”

Display fireworks are the large fireworks used in shows, generally under the supervision of a trained pyrotechnician. The regulations at 27 CFR, Part 555, require that any person engaging in the business of importing, manufacturing, dealing in, or otherwise receiving display fireworks must first obtain a Federal explosives license or permit from ATF for the specific activity.

Consumer fireworks are the small fireworks usually sold at stands around the Fourth of July holiday. ATF does not regulate the importation, distribution, or storage of completed consumer fireworks, but other Federal, State, and local agencies do regulate these items to a varying degree. Because consumer fireworks contain pyrotechnic compositions classified by ATF as explosive materials, the manufacturing of consumer fireworks requires a Federal explosives license from ATF.

Wildlife and Taxidermy

Federal and State

http://www.thegreenwolf.com/partslaws.html

wisconsin 29.501(1)(b) "Fur auctioneer" means a person

duly licensed to sell furs of wild-fur-bearing animals

of this or other states or foreign countries.

29.501(6m)(b) Not less than 10 days before conducting a fur auction, the fur auctioneer shall file with the department evidence of national advertising showing the date and place of the auction.

29.501(6m)(c) Within 10 days after conducting any fur auction, the fur auctioneer shall file with the department on forms furnished by it a report of the auction containing the date and place of the auction, the names and addresses of all persons buying furs taken from wild fur-bearing animals, the quantities and kinds of furs bought, and the amounts paid for the furs by each buyer.

Rights and Copyrights

Timber Rights

There are tax implications:

http://www.timbertax.org/research/revenuerulings/capitalgain/

http://www.atlas1031.com/blog/1031-exchange/bid/57365/Timber-Rights-Why-a-Tax-Deferred-Exchange-Matters

Timber Rights

Studies show that timber sellers using a professional forester get up to 50 percent more per sale. Private foresters usually offer their services on a fee basis. Timber owners often find this expense more than offset by the higher selling price received for their timber.

The best time to sell, obviously, is when demand for timber is up and prices are at a peak.

Timber Rights - Know the type of timber forest products you are growing: Different prices are paid for different timber

products.

- Know the timber species you have for sale: Some tree species command higher prices than others due to high demand, limited or special qualities.

- Know the quality of timber: Quality affects timber values just as it does any other product.

- Know the volume for your timber sale: Logging requires the use of heavy equipment and numbers of men and large costs associated with this. Larger volumes for sale generally equate to higher stumpage prices because of the greater logging efficiency and reduced costs.

- Know distance from market: Transportation of forest products is expensive. Local mills should be able to pay higher prices for your products than more distant mills.

- Know size of trees: Generally, the larger trees bring the best prices. Large saw logs and poles are worth

more than small ones.

It is important to know as much about the trees you are selling as it is to know the value of the next house or car you sell. Attention to the above factors make for a better sale. The more you know, the better prepared for a sale you will be.

Mineral Rights

Mineral rights leases and sales are on the rise in many parts of the country

Considerations:http://www.askchesapeake.com/Barnett-Shale/Leasing/Pages/selling-mineral-rights.aspx

Other air and land use rights Cell Phone Towers

Pollution Rights

http://www.greenleft.org.au/node/9097

Water Rights

http://youtu.be/tKYIAF_i92I

Other

CopyrightsWhat is a copyright? A copyright is the legal protection given in the United States to original works of authorship. Copyrights protect books, paintings, photos, music, video, software and so forth. Copyright protection attaches to a work the moment it is fixed in tangible form (on paper, on video,. etc.) and prevents others from using the work without permission.

Copyright is a bundle of rights A copyright is a bundle of rights, including the exclusive right to distribute, sell, duplicate, publicly perform, and create derivative works from the work. Copyright for newer works lasts for at least 70 years, depending upon whether the author is a person or a company. The length of copyright protection for older works is often difficult to determine. The fact that a work is old doesn't necessarily mean that the copyright on it has expired. Until the end of the term of protection, a copyright owner has the right to sell, transfer, assign, or license one or all of these exclusive rights to someone else.

Intellectual Property

http://youtu.be/rvJSKlsjGog

Intellectual Property

It’s can be stolen! It can be sold!http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1079693947&type=RESOURCES

How to value Intellectual Property:

http://www.ipo.gov.uk/iprpricebooklet.pdf

Household Items

mattresses, pillows & bedding

The FTC: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt068.shtm

A Guide:

http://www.southernlabel.com/pdf/tagmanual.pdf

hazardous materials

Gasoline Pesticideshttp://www.epa.gov/oppfead1/cb/csb_page/updates/2011/ratpoison.html

Refrigerants

http://www.epa.gov/ozone/title6/608/sales/sales.html

Other

Wisconsinhttp://nxt.legis.state.wi.us/nxt/gateway.dll?f=templates&fn=default.htm&d=stats&jd=100.37

*review from paragraph 100.37(2)(d)

Other

Adult & Pornographic Materials Drugs & Drug Paraphernalia Offensive Items (Nazi, Klan, etc) Counterfeit Items Tobacco

http://www.atf.gov/alcohol-tobacco/Open%20Letter%20to%20All%20Persons%20Who%20Sell%20Transfer%20or%20Ship%20For%20Profitt%20Cigs%20-%202010-10-21.pdf

some charitable tax exemptions

54

Federal Income Tax Rules for AuctionsCharitable Contribution Deductions for Donors

of Auction Items

Most goods donated as auction items

Tangible personal property not used by charity in activity related to exempt purpose

Deduction limited to lesser of cost or fair market value

Items purchased and immediately donated for auction should have fair market value equal to cost

55

Federal Income Tax Rules for AuctionsCharitable Contribution Deductions for Donors

of Auction Items (Cont.)

Self-created goods donated as auction items Deduction ordinarily limited to cost of supplies

consumed in creating goods

Services donated as auction items No deduction for contribution of contributor’s own

services Donation of purchased airline tickets or hotel stay

should be deductible

56

Federal Income Tax Rules for Auctions

Substantiation of Charitable Contribution Deductions for Donors of Auction Items

Donor must have either a bank record or a written record from charity showing charity’s name date of contribution amount of contribution or, if contribution is a good,

location of contribution and reasonably detailed description of the good

57

Federal Income Tax Rules for Auctions

Substantiation of Charitable Contribution Deductions for Donors of Auction Items

Donor giving $250 or more at once must have written acknowledgement from charity

Obtain by earlier of date return for year filed or due date (with extensions) for such return

Must include amount of cash, description of any property, and whether charity provided any goods or services as consideration for the contribution

58

Federal Income Tax Rules for Auctions

Charitable Contribution Deductions for Purchasers of Auction Items

No charitable contribution unless amount paid exceeds fair value of auction item

If amount paid exceeds fair value and amount paid is $75 or more, charity must provide “quid pro quo” notice to contributor

59

Federal Income Tax Rules for Auctions Unrelated Business Income Tax

No UBIT if not regularly carried on

No UBIT if substantially all work done by volunteers

No UBIT if substantially all auction items consist of merchandise donated to the charity

Data and copier security

61

Guide for Businesses

Copier Security (Brochure) Tax Forms and privacy issues PCI Compliance

Other Business Issues or Concerns?