Delcampe Is Officially Run By Morons

So Delcampe has provided a bit more information today:

On the Delcampe Forum from Dimitri:

"Hello,

We understand your emotion following our decision to stop our services for the moment in 25 states. Once again, we are sorry to have been forced to make such a decision, but please remember that we are a small company of about 30 people with a passion for collecting, and that we do not have the same resources as a company with thousands of employees. Our core business is to facilitate exchanges between collectors so that everyone can find the jewel that they love.

In the states where our services are still available, we do not see any risk of non-compliance because we are very far from the reporting thresholds. We have stopped our services in states that require tax capture from 200 transactions regardless of the amount of those transactions. It is therefore not planned to close the accounts of users in other states such as NY, CA and TX".

He provides a link that you can look up individual states:

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

So for the state of New York, as long as the collective buyers in that state don't purchase more than $500,000 in four quarters we're cool. Okay New York, we have a budget..don't blow it! You see some $100,000 items, you keep scrolling.

So utterly clueless by these people. They still don't get that it's not the decision that is the problem but the brusque and callous manner in which it was implemented and communicated after the fact, with impacted buyers and sellers no longer having access to any historical transactional information.

Yea, that was pretty heinous as well. They just dropped that bomb and ran away for a three day weekend. Only reason I was able to get more information out them beyond what the people with closed accounts is because I badgered them on their forums and via email. The no warning is a bad move on their part. I now wonder if other states will get a warning if their state thresholds are met. Doesn't sounds like Delcampe wants to change their system to comply with the tax requirements.

"Young Skywalker, I sence a great disturbance in the force."

Many of the smaller collector/dealer sellers no longer list material on ebay in my areas of interest.

No argument Delcampe has handled this badly, but that "200 transactions regardless of amount" is an odd threshold for some states to be using. With an average sale of $10 let's say on Delcampe, they would have to add programing & procedures to track sales by state, register & remit state sales tax on $2000 gross, when they are only keeping ~8% ($160) of that with their fees. Can see why they decided it wasn't worth it for them.

And of course all the US based sellers on Delcampe report that income properly to their state as well as the feds when filing income taxes. With the screams associated with the recent 1099-K issues, I think not.

Yes, sometimes it hurts when a business model run up against changing reality of the financial world.

That said, no one here can say what was told to Delcampe which caused the changes and how much time, if any, they were allowed to act.

This sounds like the passengers in an Uber being upset they were not given any notice that their Uber driver would be stopped and arrested for a law violation (such as drunk or drugged driving), leaving them without their planned ride.

Edit: period to a comma.

I think that your first quote above is the important one and one that makes your second point moot.
Don

I have said it twice and I repeat: "a typical American way of looking at the world."

What your states do with taxation, in principle, is completely irrelevant to most of the world. There is no reason for any company outside the USA to be concerned with local taxation. This kind of news is less interesting to most people outside the USA than the beach weather forecast for the North Pole.

You need to read or reread Chris Palermo's post on page 5 of this thread.

As previously mentioned, if a US state seeks to require an entity in a foreign country to collect taxes for it, that constitutes a supposed legal basis that is likely to prove non-existent in any non-US jurisdiction because of its extraterritorial nature.

Not if the rest of the world wants to sell to Americans. I'd add that your phrasing makes it sound like there's a national level of sales & use taxation in the USA, which there is not. No one is forcing an overseas seller to do business in the USA or with its residents; let's not make it sound like Delcampe (or anyone) has been somehow singled-out for persecution. The ruling does nothing more than place all sellers of goods and services to Americans on an equal footing.

This is actually pretty simple. Delcampe has a nexus with each of the States. That is what is required to trigger the collection of sales taxes. There are enforcement mechanisms for compliance.

If, as Geoff and NSK say,
and
why has Delcampe bothered to take the measures which this topic is about?

My guess is that Delcampe has taken a legal opinion. Mainstream lawyers are a risk-averse bunch, and have probably advised it accordingly. What Delcampe has probably NOT then done is a risk assessment of not operating as a tax collection service for a legal entity several thousand miles away that is likely to have no knowledge of Delcampe's existence and no knowledge of the purchasers of products sold via its site.

Of course, but something prompted them to at this point. As has been said ad nauseum this is not an issue that arose last month. I seriously doubt that Delcampe woke up the other day and said "hey, let's drop 50,000 Euros on an attorney" to deal with a non-existent problem" and while we are at it, we will redefine what we are in our T&C's.

My guess would be that Delcampe has an extremally small presence in the US in that a copy of their server data would be contained on a US server and secondly most of their US funds would need to cleared through New York. With most service providers they have a number of server farms distributed throughout the world and as a subscriber only, as Delcampe would be, it is extremely difficult to firstly get information on where all of your server copies are running and secondly to opt out of any specific countries. I was running a large application for a US pharma company using AWS services. We were forced to adopt EU data privacy as AWS was never able to guarantee that a copy of the data was not going to be shadowed in Europe (the data was in Iceland and Germany).

The pharma company adapted the privacy laws for US patients as they had a lot to lose, it seems that Delcampe has decided that losing the business makes sense and is cheaper than trying to follow the law.

Both US and the EU have habit of enforcing each other to follow their laws. I can think of many other examples in the financial world.