In the Beginning
The first president of the association was Russell Davis in 1949. Although Mr. Davis was the first president of the association, the association was not recognized by the State of Minnesota as an association until June 7, 1960 when it officially incorporated as the Minnesota State Auctioneers’ Association. Recently, the board of directors came across the original Articles of Incorporation. This document presents an interesting look into the heritage of the association.

The Incorporators and First Board of Directors
In 1960, the association was incorporated by three people all from Minneapolis, Minnesota: Jerry Rosenzweig, Bertin A Bisbee, and Gus N Benakis. Initially, the association had 16 directors: EK Elmes, Long Prairie; Vernard Paulson, Winthrop; Alvin Payne, DeGraff; Hubert Pinske, Arlington; WJ Radde, Watertown; WA Thomsen, Austin; Daniel Turek, Montgomery; Paul Hull, Austin; Floyd Munsell, Franklin; Frank Sloan, Minneapolis; Russell Davis, St Peter; Tom Gould, Minneapolis; MJ Henry, Foley; Claus V Beck, East Grand Forks; Alvin Kohner, Winona; and MC Maranell, Woodstock. Many of these first directors were past presidents of the association, at the time of incorporation, or would go on to become presidents of the association, after the first incorporation.

Initial Purpose of the Association
The original articles provided 13 purposes for the association. I’ll briefly touch on the first nine of the purposes, as they offer an interesting look back at the heritage of the association – a look back that is important to remember as the association celebrates 60 years.

• To promote a spirit of cooperation among auctioneers who constitute the association and for the encouragement and protection of auction sales and to hold meetings at stated periods where members of the association may meet one another in a body and whereby the interchange of views they may be mutually benefited, their profession promoted and the most advantageous methods of bookkeeping, management, advertising and other problems applicable to their particular profession may be discussed.
• To reform abuses in the profession, to secure, for the profession, freedom from unjust and unlawful transactions, to produce uniformity and certainty in the customs and usages of the profession, to settle differences among the members of the association, to prevent unjust and unreasonable discrimination against any person or persons by any combination, person or conspiracy in any matter relating to the profession or the members.
• Protect the interest of all Auctioneers (members of the association) in all matters of legislation when such legislation is in the interest of our association.
• At all times to help, aid and assist in elevating the Auctioneering profession technical training, instruction, apprenticeship, exchange of ideas, practices, advertising and publicity.
• Exclude all questions which verge on immorality, sectarianism or on politics, except as essential to the discussion of a political topic.
• Go to the assistance of a brother member, when due to conditions over which he has no control, in helping to the best of one’s ability in the conduct of an auction sale or in any other way or manner your judgment may dictate.
• Strive at all times to make the public more auction minded by fostering advantages of selling at auction, conducting charity auction sales, publicity and by being auction salesmen.
• To exercise the privilege, when consistent to do so, of using the organization’s influence as and when the occasion presents, in protest against existing or proposed legislation designed to place unfair or burdensome limitations upon the member, all state Auctioneer organizations and or Associations and upon the auction method of selling or barter.
• To create and maintain a Health and Welfare program, designed to care for the health and welfare of members whose disability by reason of advanced age, or injury, may force them from active performance of their profession as Auctioneers.

It is often easy to look at an association, and forget that so many have come before the current leadership, and with such foresight. In fact, nearly all nine of the purposes of the original association remain topics at the forefront the association today. As the association moves forward, and celebrates 60 years as an association in 2009, now is an excellent time to review the first purposes of the association, and consider if the association is remaining faithful to its fellow members and the first purposes!

I understand that if selling for a business that would have charged tax, I need to collect on their items. However, it is unclear if I am selling for people downsizing, left over estate items for the deceased or someone just cleaning house…

I am under the understanding from the MSAA that tax MUST be collected on this type of sale. Yet the first response I recieved from the state tells me I do not have to collect sales tax.

There are two other auction houses within 30 miles of mine and they are not collecting tax. I am and this is creating a conflict with my customers.

Minnesota has rules governing the collection of sales tax. The particular area that applies to auctions of personal property is: Minnesota Administrative Rules 8130.5800 ISOLATED OR OCCASIONAL SALES AND SALES OF PERSONAL PROPERTY USED IN TRADE OR BUSINESS.

The answer from the state is correct – but only to a point. They are correct that tax is generally not collected in instances where you are selling for that seller and only that seller (an auction by their definition) not at consignment auction. However, regularly scheduled consignments auctions are not considered auctions (I know it sounds crazy – but that’s the law – see Rules 8130.5800 Subp. 10 B.), and are instead considered consignment auctions. As a result, Subp 10 applies.

Subp. 10. Consignment sales and consignment auctions.
A. For purposes of this part, consignment sales are sales in which a retailer maintains a place of business where tangible personal property owned by others is sold by the retailer in the normal course of business. The retailer may also sell property owned by the retailer. A consignment sale is not an auction, as defined in subpart 8.

B. Consignment auctions are events that are regularly scheduled, are open to members of the public to sell their items, and are held at the same location. Consignment auctions are not selling events, as provided under Minnesota Statutes, section 297A.87. Consignment auctions are not auctions, as defined in subpart 8.

C. The sale of items held in inventory, taxable services, and property primarily used in a trade or business is generally subject to tax, as provided in Minnesota Statutes, section 297A.68, subdivision 25.

D. Consignment sales and consignment auctions are exempt from tax if:

(1) the title to the property passes directly from the owner to the buyer;

(2) the payment does not pass through any accounts of the retailer or auctioneer;

(3) the retailer or auctioneer does not carry insurance on the property; and

(4) the rights to accept or reject any offer are retained by the owner.

If all four of the exceptions apply at consignment auction, you are not required to charge tax. If an auctioneer fails to meet any of the four, tax is required to be collected. Of course, there are exemptions that the buyer can have – and most require them to have a tax id number, and all require them to complete an exemption form.

To answer your question, if it’s a regularly scheduled consignment auction, tax should be charged. If is a stand alone auction for a seller, tax is not required to be charged if it meets the exemption explained in the correspondence from the state. In fact, our company has taken the collection one step farther, and collect sales tax on all consignment auctions. We have found the term regularly scheduled to be unevenly applied, and find it financially prudent to charge tax on all consignment auctions rather than risk an audit, and assessment of unpaid sales tax.

I have always heard that we were legal to sell firearms if they are part of an estate or if the auction that we are working is a 1 party auction.

Our local sheriff called me and said that this is incorrect…any firearm that are sold at auction need to be sold under a FFL.

I called the St.Paul office of Tobacco, Firearms, etc. and visited with a gal named Mary. She again, told me that I was legal to sell as I mentioned above.

I also received a call from another auctioneer in our area – he had heard that the sheriff had visited with me…this auctioneer said that in Minnesota – you are legal to sell any firearm without running them thru an FFL. This auctioneer sells a lot of firearms..

When I answer a question for a member, I like to provide the sources I used for my research. I believe this empowers the member to learn. It also encourages them to share the information with others, as it’s just not well I talked to this person and they said it was okay. Much of this style comes from working at the law office where I cite every thing I write.

My answer to the question: Selling Firearms at Auction: Before I answer your questions, I’ll point you to the sources I used for to obtain the answers.

The ATF provides the Federal Firearms Regulations Reference Guide online. A copy can be found here: http://www.atf.gov/pub/fire-explo_pub/2005/p53004/index.htm

Within the guide, there is a section entitled “Rulings, Procedures, and Industry Circulars” within that section is ruling 96-2 Activities of auctioneers requiring a dealer’s license. This ruling discusses at length what an auctioneer can and can’t do without a license. I’ve attached a pdf of the rulings. Ruling 96-2 is found on page 15 and 16 of the pdf, and page 133 and 134 of the document. The text of the document is informative, and somewhat lengthy. However, it finds the following:

Held: Persons who conduct estate-type auctions at which the auctioneer assists the estate in selling the estate’s firearms, and the firearms are possessed and transferred by the estate, do not require a Federal firearms license.

Held further: Persons who regularly conduct consignment-type auctions, for example, held every 1-2 months, where the auctioneer takes possession of the firearms pursuant to a consignment contract giving the auctioneer the exclusive right and authority to sell the firearms at a location, time and date to be selected by the auctioneer and providing for a commission to be paid upon sale are required to obtain a license as a dealer in firearms pursuant to 18 U.S.C. § 923(a).

Hopefully this information helps. Your local sheriff appears to have provided you with incorrect information. There are instances when an auctioneer can sell firearms without a license or involving a licensee. I trust you’ll find this information helpful.

If you have any questions for me that you’d like me to answer, feel free to contact me in any of the ways on my connect page. I’m glad to offer my assistance.