1. Continuing Education 2011

2. 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

3. ….and,
We will review federal regulations
regarding:
 Tax exemptions
 information and data security

4. The states we will be discussing today all
have continuing education requirements
for their auctioneers.

5. General Topics
 Alcohol, Firearms and Explosives
 Alcohol Sales at Auction
 Firearms
 Fireworks
 Wildlife and Taxidermy
 Live animals
 Dead animals
 Furs

6. General Topics
 Rights and Copyrights
 Above the ground
 Below the ground
 Intellectual property and copyrights
 Household Items
 Mattresses and Pillows
 Hazardous Materials

8. 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

9. Alcohol
 Private Sale States will include:
Arkansas – Georgia – Illinois – Indiana –
Kentucky – Tennessee – Texas -
Wisconsin

10. The tax stamp people: they mostly regulate wholesalers
….and they want their tax money!
http://www.ttb.gov/about/mission.shtml

11. 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 History: Repealed and New: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.

12. 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)

13. georgia
GA: 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.

14. 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.

15. 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.

16. 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.

17. 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.

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

19. illinois
 Alcohol sales are permitted at auction by
special permit:
http://www.state.il.us/lcc/DOCS/SpecialtyLiquor.pdf

20. 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.

21. kentucky
By Special Permit:
http://www.lrc.ky.gov/krs/243-00/036.PDF

22. north carolina
By permit in approved areas:
http://abc.nc.gov/PERMITS/special.aspx

23. Once upon a time, Wendell sold
some collectible whisky at an
online auction site.

24. 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

25. 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

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

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

28. 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.

30. Engaging in the Business of Dealing in Firearms
http://www.atf.gov/regulations-rulings/rulings/atf-rulings/atf-ruling-96-2.pdf

31. Regulations by state
http://en.wikipedia.org/wiki/Gun_laws_in_the_United_States_(by_state)

32. 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.

34. Federal and State
http://www.thegreenwolf.com/partslaws.html

35. 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.

38. 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

39. 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.

40. 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.

41. 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

43. 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

44. Copyrights
What 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.

45. Intellectual Property
 http://youtu.be/rvJSKlsjGog

46. Intellectual Property
 It’s can be stolen! It can be sold!
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=10796
93947&type=RESOURCES
 How to value Intellectual Property:
http://www.ipo.gov.uk/iprpricebooklet.pdf

49. 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

50. hazardous materials
 Gasoline
 Pesticides
http://www.epa.gov/oppfead1/cb/csb_page/updates/2011/ratpoison.html
Refrigerants
http://www.epa.gov/ozone/title6/608/sales/sales.html
 Other

51. Wisconsin
http://nxt.legis.state.wi.us/nxt/gateway.dll?f=templates&fn=defaul
t.htm&d=stats&jd=100.37
*review from paragraph 100.37(2)(d)

52. 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%20
Who%20Sell%20Transfer%20or%20Ship%20For%20P
rofitt%20Cigs%20-%202010-10-21.pdf

54. Federal Income Tax Rules for Auctions
Charitable 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
54

55. Federal Income Tax Rules for Auctions
Charitable 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
55

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
56

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
57

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
58

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
59

61. Guide for Businesses
 Copier Security (Brochure)
 Tax Forms and privacy issues
 PCI Compliance
 Other Business Issues or Concerns?
61