Watch dealing in Florida: registration, records, and tax

Summary

Florida is the opposite of Texas in one important way: the dealer registration is statewide and mandatory, not a patchwork of city licences. A secondhand dealer may not purchase, consign, or trade secondhand goods from any location without registering with the Department of Revenue, and the chapter that requires it — Chapter 538, Part I — also sets the records you keep, the report you file on every purchase, and how long you must hold what you buy.

It is also stricter in practice than either state currently covered here. Every purchase from the public produces a thumbprint, a 24-hour report to your local police chief or sheriff, and a hold of 15 or 30 days before you can sell the watch.

Registering as a secondhand dealer

Register with the Department of Revenue before you trade from a location. The fee is $6 per location at registration and $6 per location on October 1 each year. With the application you submit a complete set of fingerprints certified by an authorized law enforcement officer, a recent fullface photo identification card, and a fee equal to the state and federal fingerprint processing costs. The department forwards the prints to the Florida Department of Law Enforcement, which reports back within 30 days, and it may issue a temporary registration while that runs.

An applicant must be a natural person aged 18 or over; partnerships apply as all partners, and corporations file their registered agent details and proof of good standing. The registration is displayed at the registered location, and operating without one exposes you to a civil fine of up to $10,000 per violation (§ 538.09).

What counts as secondhand goods

"Secondhand goods" means personal property previously owned or used which is purchased, consigned, or traded as used property. The definition excludes costume jewelry and coins, among other things — but it does not exclude watches, so a used wristwatch is squarely within it (§ 538.03(1)(i)).

Several exemptions matter to a working dealer (§ 538.03(2)):

• Dealer to dealer. Buying from another secondhand dealer who has complied with the chapter is exempt.
• Trade-ins. Accepting a secondhand good as a trade-in toward a similar item of greater value is exempt.
• Auction businesses, as defined in § 468.382, are exempt.
• Internet businesses. A business that contracts with others to offer secondhand goods online and maintains premises for the purpose is exempt if it meets eight conditions, including keeping records two years, listing serial numbers, allowing police inspection, and either checking serial numbers against FDLE's stolen-article database at least 48 hours after contracting or sending the seller's details to law enforcement within 24 hours.
• Personal online selling. A person offering their own property, or others' property, online where no local business licence is required for it.

Records and the 24-hour report

Complete a transaction form at the time of the transaction. Unless your local law enforcement official agrees otherwise, deliver a record of the purchase to them within 24 hours, on a form approved by the Department of Law Enforcement. It must contain (§ 538.04):

• The time, date, and place of the transaction.
• A complete description of the goods: brand, model, manufacturer's serial number, size, colour, precious metal type and weight, and gemstone details.
• Digital photographs of the goods.
• The seller's full name, address, workplace, phone numbers, height, weight, date of birth, race, gender, hair and eye colour — and their right thumbprint, free of smudges.
• The type, issuing agency, and number of a government photo ID you have inspected.

The seller signs a statement that they own the goods or are entitled to sell them. Giving false verification of ownership is a felony for the seller. Keep transaction records for three years. Where your police department supplies software, transactions are transmitted electronically instead of on paper.

Holding periods

Before you sell, barter, alter, or otherwise dispose of a secondhand good (§ 538.06):

• 30 calendar days for a precious metal, a gemstone, or jewelry — and for antiques, fixtures, decorative objects, and art.
• 15 calendar days for secondhand goods not in that list.
• 30 calendar days where the purchase was made through an automated kiosk.

The hold doesn't apply when the original seller comes back to redeem or repurchase the goods and you can produce the record of the original transaction. A law enforcement officer with probable cause may place a 90-day hold on goods believed stolen, extendable by a court.

Which category a watch falls into. Part I never defines "jewelry", but the chapter does, in Part III: "Jewelry means a personal ornament that contains precious metals and may contain gemstones" (§ 538.31(1)(b)). "Precious metals" means any item containing gold, silver, or platinum (§ 538.03(1)(f)). Applying those:

• A gold, two-tone, or platinum watch contains precious metal — 30 days.
• A steel watch set with stones is caught by "a gemstone" in its own right — 30 days.
• An all-steel or titanium watch with no stones is neither a precious metal nor, on the chapter's definition, jewelry — 15 days.

The definition sits in the part of the chapter that governs mail-in dealers rather than in Part I, so it's worth having counsel confirm it applies before you rely on the shorter hold for steel stock. Nothing else in Chapter 538 competes with it.

Sales and use tax

Register each location for sales and use tax before making taxable sales, online or on the Florida Business Tax Application (Form DR-1). The state rate is 6%, plus your county's discretionary sales surtax; for certain transactions only the first $5,000 of a taxable sale carries the surtax, which matters on watches. Once registered you receive a Certificate of Registration (Form DR-11), which must be displayed at the business location, and an Annual Resale Certificate.

Remote sellers must collect once taxable remote sales into Florida exceed $100,000 in the previous calendar year, and marketplace providers register and remit on the sales they facilitate.

Business registration

A new Florida LLC costs $125 — a $100 filing fee plus the required $25 registered agent fee — and the annual report is $138.75 (rising to $538.75 after May 1). If you trade under any name other than your entity's legal name, register the fictitious name for $50; the registration certifies that you advertised your intent at least once in a newspaper in the county of your principal place of business, and it runs to 31 December of the fifth calendar year.

Pawnbrokers are a separate regime

If you advance funds against a watch and hold it as security, you're pawnbroking, not dealing secondhand goods. That requires a licence from the Department of Agriculture and Consumer Services — a separate licence for each pawnshop, $300 a year, with 30 days' written notice before moving a shop (§ 539.001).

City rules sit on top

Chapter 538 expressly preserves local power: "Nothing in this chapter shall preclude political subdivisions of the state and municipalities from enacting laws more restrictive than the provisions of this chapter" (§ 538.17). In practice most Florida cities regulate watch dealers only through the local business tax receipt, but Jacksonville runs its own permit, reporting, and holding regime on top of the state one. Check your city.