Tax Type
Retail Sales and Use Tax
Description
Auctioneers performing auctions for nonprofit organizations
Topic
Taxability of Persons and Transactions
Date Issued
12-20-1988
December 20, 1988
Re: Request for Ruling: Sales and Use Tax
Dear********************
This will reply to your letter dated October 21, 1988 in which you request a ruling on behalf of the regarding the applicability of the sales and use tax to auctioneers who perform at auctions conducted by nonprofit organizations.
FACTS
Auctioneers occasionally donate their time to "bid-call" fundraising auctions conducted by nonprofit organizations. The auctioneers are not responsible for conducting the auction, receive no compensation, and have no control over the clerking, cashiering or collection of monies.
Since the auction firms or auctioneers are not responsible for conducting the auction, you request that the auctioneers be exempt from the collection of sales and use tax on tangible personal property sold during fund-raising auctions conducted by nonprofit organizations.
RULING
An auctioneer is engaged in the business of selling tangible personal property and must collect and pay the sale tax on the gross sales price of each taxable sale. There is currently no statutory provision that would exempt auctioneers from the collection of the sales and use tax when they conduct auctions for nonprofit organizations which take on the same status as sales for profit making purposes.
An auctioneer, however, would not be deemed in the "business" of selling at retail if he gratuitously bid calls an auction which is actually conducted by a nonprofit organization, i.e. the auctioneer has no direct association with the money being collected, registration, clerking, etc. Yet, if the auctioneer is responsible for conducting the auction or has control over collection of the money, he is still liable for collection of the tax whether the auction is for a nonprofit organization or not and whether he is compensated for his services or not.
In those limited circumstances where an auctioneer is not required to collect the tax, the nonprofit organization conducting the auction may be required to register and collect the sales tax.
If an auctioneer is uncertain about the applicability of this ruling to a specific fund-raising event conducted by a nonprofit organization, please have them contact the department for a written ruling.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner