Hi, all I hope someone will be kind enough to help me with a question
of ethics and legality. Does anyone know whether it is OK to send a
student/associate of mine who doesn’t have a resale number to the gem
show to buy on my behalf, using my resale certificate? No one has
ever asked me to prove who I am, beyond a business card, so I guess
it would work, but I’d rather not feel I’m doing anything shady.
Thanks! --Noel
Does anyone know whether it is OK to send a student/associate of mine who doesn't have a resale number to the gem show to buy on my behalf, using my resale certificate?
Noel, ethics isn’t really a problem here, and neither, really are
legalities. You send your student with your tax number, and in
essence, you’re representing that he/she is buying on your behalf.
Nothing wrong with that, so long as the show will let them in (not
all will). However, understand that one primary reason for the tax
number stuff is so that dealers don’t have to worry about sales tax
liability themselves. That means buyers are responsible for filing
and paying any sales or use tax that may be due, now or eventually,
on the purchases. In this case, since purchases are being made with
YOUR number, you’re essentially liable for taking care of the taxes.
Properly, your student would show up with the reciepts, which would
be given to you. You’d then write a reciept to the student showing
that sale from your inventory at the same cost (or make a commission
if you like), with any sales due added on, which the student would
then pay you. You’d then file that as a sale with your sales tax
return. Since the purchase price and sales price are the same,
you’d not generate income on which tax would be due, though in a few
instances, there are business taxes due on gross reciepts, in which
case that would impact you.
As to ethics, the ethical principal of wholesale shows is that
professionals don’t like to find their own customers buying their
gems at the same places they do. This makes it impossible to add a
markup and compete, if the dealers will sell to anyone. But in this
case, your student is arguably working on the wholesale side of that
equation, or training to do so, so I see no problem with this.
Each show, however, has it’s own requirements for who they’ll let
in, and what proofs are needed. Some shows require advance
registration, as well as total proof that the actual individual is in
the business actually served by the show (so someone with a
restaurant supply business can’t come buy their gems at wholesale
too, since they’re really a retail gem buyer), some even want photos
of the store front, I think. The big shows for finished jewelery
are often this way.
Other shows are more lax, mostly covering their butts with the
various tax authorities. The GLW gem shows come to mind as an
example of such, or at least they used to be quite casual about it…
Peter
It sounds ethically ok. If you were letting her use your resale
number espressly to buy stuff for herself, that would be ethically
not ok. I don’t think it’s illegal. In this case, she’s acting on
your behalf, as your agent, with your knowledge aforehand. But the
gem show may want to know about the arrangement. Why don’t you ask
them?
Christine in Littleton, Massachusetts
Noel & All, There was a time when I would have told you no without
even batting an eye. Over the last 8 years as a dealer in Tucson I
have changed my view. Every show lets people in that do not belong in
the show. Most of the people come in as guests of a registered
buyer. Once inside the show they make personal purchases.
Celebrities, Industrialists, and millionaires also have entered most
of the shows with no affiliation to the Gem & Jewelry Industry.
Limousine shuttle service picks these people up at the airport from
their personal air transportation and delivers them directly to the
show. Some of these people buy directly from dealers in closed door
affairs that never see the light of a show room.
What this means is that at most of the Tucson if you are a rich
person no one cares and the entry is more of a formality than an
actual check of credentials. Some things may be changing. I am in
G+LW shows and this year they have already started talking about a
more formal entry for security reasons.
The legality of entry is whether or not the buyer is purchasing to
resell the items. If they are not then they should be paying a tax
on the item. Is this person buying strictly for you and not for
themselves? That is the question you have to answer for yourself. I
will assure you that the dealers will not care.
I would preregister yourself and your associate as an entity. Then
I would send the person alone to the show. Not one dealer I know
will care if the person is legitimate or not. Dealers do care if the
person has verifiable funds to spend.
Gerry Galarneau
@Gerry
Christmas Sale at
www.galarneausgems.com
Noel, If the associate is buying on your behalf, using your money,
then they are acting as your agent/employee and can use your resale
number for those purchases. (I’m assuming you’re in the U.S.)
Karen Goeller
@Karen_Goeller
Hello Noel,
Does anyone know whether it is OK to send a student/associate of mine who doesn't have a resale number to the gem show to buy on my behalf, using my resale certificate?
I can't see any ethical problem. In these circumstances, your
student/associate is acting for you as a buyer. Keep the records and
if the buyer buys anything that is personal (not for you), but uses
your certificate, go through the paperwork to document you are
selling it to him/her and collect the sales tax. I would pre-register
the buyer though. Less hassel to have that done ahead of time. Just
my $.02, Judy in Kansas where it’s cold but sunny.
Judy M. Willingham, R.S.
Biological and Agricultural Engineering
237 Seaton Hall
Kansas State University
Manhattan KS 66506
(785) 532-2936
Aloha, This is Hawaiian Quizine Collectibles, Ent. in Hawaii. The
Gem shows here will not allow any person of a company into the
wholesale purchasing unless a business in the “buyers, students,
associates, or other significant persons” must have and show with a
valid ID card. In the past, business owners were inviting friends and
family to these events and allowed them to buy at wholesale prices.
This caused a huge stir here and a crack down on company support
documentation has ensued to prevent this from happening again.
Business cards can be obtained for free at:
http://www.vistaprints.com If you use their logo on the back of the
card, you just pay for shipping for the first 250 cards. If you
would like a message, calendar, or any new design templates they
offer currently, you must pay for the cards with Vista Print on the
back side. Our company collected quite a few cards from the gem
wholesalers here who used Vista Prints business cards. Now they
offer a variety of announcement cards. Good luck and a HAPPY HOLIDAY
SEASON TO ALL. Barbara HQCEI
Aloha Everyone, This is HQCE. The written below is for
business/trade people who send an authorized person in the
owner’s/presidents place to purchase gems for their business. ONLY
PERSONS WHO HAVE A BUSINESS CARD, his or her name on item, and the
title of their capacity: President, Owner, BUYER for the company.
Now in Hawaii, the large gem shows will allow only those people who
have a company business card with a picture ID to enter the
wholesale area. This has been done to crack down on non-business
persons purchase gems at wholesale prices for their own personal
use.
As any business, we spend a good sum of money to retain the
company’s name, image, products, services, vendors, and a host of
other necessary business transactions. Many of our customers have
tried to obtain the name of the vendors we purchase goods from in
order to by pass our company and purchase directly from the vendor
for their own benefit. Our company has not spent thousands of
dollars to build it, only to have our sources revealed, have a loss
of customers, and send our customers to our vendors who may sell
them to make a dollar to two.
The buyer of my company was only allowed in the last gemstone show
because she was previously listed in Trade Gem Show’s computer.
Otherwise, ONLY A BUSINESS CARD WITH HER TITLE would enable her to
enter in the future. This is why our company listed the Vista Prints
Business Card link below business their service is reliable, quick,
easy, and very affordable. Our company recommends that people who
work or even study with you should have a business card in his or
her name, the company he or she represents, and a valid ID card. This
keeps the Trade Gem Shows to trade business people only and not the
public. If the public can purchase a small/medium size nugget
strand of Turquoise for only $8.00 or less, then why should this
customer purchase any products from any company with only several
pieces for much larger sum.
Thank you for reading my comments and hope this helps. Happy Holidays
and Mele Kalikimaka to All, Barbara