HipStamp And The American Philatelic Society Announce Strategic Partnership

It will be interesting to see if these current features of the existing APS store carry through to the Hipstamp implementation:

1. The ability to select APEX expertization for individual items from within the cart as part of checkout.

2. The ability to pay partially or fully for a transaction from your account balance on file with the APS (funds from selling stamps through the APS).

Or are these features falling by the wayside?

Here is Hip's explanation regarding not collecting sales tax:

I don't buy it.They are still the marketplace of record, so the legal responsibility is still theirs, not that of the payment processor (PayPal).

Why is there sales tax on old stamps, when there is none charged by the post office when new? ? ?

USPS is tax exempt by law.

Indeed - perhaps someone is in for a nasty surprise down the road in this regard?! Could be, the platform is not sophisticated enough to collect and remit sales tax automatically (as is eBay). It is an interesting point for discussion.

John

The real reason I infer that Hip is not being squeezed to collect sales tax by various US state agencies is that unlike eBay, Hip's gross sales is insignificant to eBay's volume.




Now one point of discussion at the APS GASS was the show catalog or directory. In the dealer' section for those dealers present several icons were included in the name/description. One was the willingness to work with beginners. The other was an asterisk denoting APS member dealers. HIP appears at the show and in the show directory but does not have the asterisk denoting an APS approved dealer member. Why would the APS choose to partner with a 'dealer' who is not an APS approved dealer? [Now from the comments on the various SCF threads the complaints of the less than positive experiences seem to go against the expectation of an approved APS member dealer.] What is this about? Does the APS code of ethics now not carry through to HIP transactions?

A while back on another forum, I had mentioned improvements in StampStore and one person chided me that APS was a non-profit had to be careful to not jeopardize its non-profit status. The person never articulated what line had to be crossed.

Hipstamp may indeed fall below the calendar-year gross sales threshold (note that it's sales, not state sales tax collected), most of which are $100,000, but given some of the sales puffery that has gone on, I would question whether Hipstamp may have crossed that threshold in certain states with high-population centers, e.g., New York, California, Illinois, etc.

The bigger problem for Hipstamp is that similar to the Federal 1099-K reporting threshold, certain states have adopted an annual number-of-transactions-into-the-state prong to the test, and unlike the Federal test, it's an *OR* test, not an *AND* test. So for example, instead of having to meet BOTH $100,000 in sales to the state AND 200 transactions, if your marketplace handles $100,000 in sales to the state OR 200 transactions (regardless of aggregate dollar amount), the collection requirement is triggered.

https://www.avalara.com/us/en/learn...or-laws.html

Examples:

Alaska: $100,000 in prior calendar year OR 200 transactions
Arkansas: $100,000 in prior calendar year OR 200 transactions
Illinois: $100,000 OR 200 transactions (I can all but guarantee that Hipstamp has triggered this collection requirement)
Indiana: $100,000 OR 200 transactions

I did not drill down into the actual legislation in each state to read fine print, caveats, etc.; this is based on the above-linked reference.

After spending hours of my life that I can never get back researching the tax issue I have to conclude that Hipstamp is without a doubt a marketplace facilitator whether they process payments or not. Hip's argument just seems very weak to say the least.

IMO the question is not will the hammer drop but rather when will the hammer drop when it comes to the tax issue and what will be the stance of the taxing authorities on past sales reporting that did not take place.

They were uninformed. Nonprofits can have massive sales and income from a variety of sources and can even retain large amounts of unspent income with no impact on status. The real question is how the retained income is used. If the primary use is to benefit officers, directors, or shareholders and not the educational mission of the organization, then you have a problem.

As the news spread at GASS there was/is some grumbling by APS member dealers, especially the longer term ones, who find it disheartening that the APS would partner with a 'dealer' who is not an approved APS member dealer. General comments ran along the line of 'it must be about the money.'

I think it is all about money. The cost to run internally vs externally and a need for more revenue to supplement declining memberships.

So APS opens a shop on HipStamp. Probably a good thing in that it does give the APS potential exposure to consumers who are not currently members of the APS.

But why stop there, Delcampe is a much bigger philatelic market than Hipstamp is - if APS wants to get its store viewed by more people (and in particular a larger GLOBAL audience) it would make sense to open a storefront on Delcampe as well as HipStamp

Just my thoughts as someone who uses Delcampe much much more often than Hipstamp

Any progress or news about the joint venture? GASS is over, folks are back to there home geographic area thus perhaps some progress is being made.
Of course if Covid hit any staff at GASS, then that will certainly slow things.

At least a tentative timeline of the merging activities should be available now, if not soon, I would think.