Watch dealing in New York: licensing, records, and tax

Summary

New York is the opposite of Florida. There is no statewide secondhand-dealer licence: the General Business Law licenses junk dealers, collateral loan brokers, peddlers and itinerant vendors, but has no general secondhand-dealer article. What the state does impose is sales tax registration, a set of marking rules that reach watch cases directly, and an LLC formation process with an unusual and expensive publication step.

The licence that actually governs a dealer's day-to-day is New York City's, and it is strict. If you operate in the five boroughs, read the New York City guide — that is where the substance is.

Sales tax

Every person who sells taxable tangible personal property must register with the Tax Department through New York Business Express before beginning business, and the department is explicit that this applies even where you make sales from your home. Registration produces a Certificate of Authority. The rate you charge combines the state rate with the local rate for the jurisdiction the sale is delivered into, so a dealer shipping around the state is charging different rates on different sales.

Forming the business

An LLC's Articles of Organization cost $200 to file with the Department of State. The step that surprises people is the next one: Limited Liability Company Law § 206 requires the articles, or a notice of formation, to be published in two newspapers for six consecutive weeks. The newspapers are designated by the county clerk of the county where the LLC's office is located, they set their own rates, and you then file a Certificate of Publication with the affidavits annexed. In some downstate counties the newspaper charges dwarf the filing fee, so price this before you choose where the office sits.

Marking gold and silver — including watch cases

General Business Law Article 13 regulates how precious metal articles may be marked, and two sections speak to watches directly.

Under § 229-g, selling — or possessing with intent to sell — an article made of works or movements with a case marked "sterling" or "sterling silver" is a misdemeanour unless the case contains not less than 925/1000 parts pure silver.

§ 229-i governs articles made wholly or partly of gold, prohibiting marks that overstate the fineness of the metal, with defined tolerances measured with and without the solder used to join the parts. Watch cases are carved out of subsection (1) and treated on their own terms within the article.

For a dealer this matters when you describe or re-tag a watch: repeating a case marking you haven't verified, on a piece you're offering for sale, is the situation these sections are written about.

Pawnbroking is separate

Advancing money against a watch is collateral loan broking, not secondhand dealing. New York City requires a DCWP Pawnbroker licence for that activity, in addition to a secondhand dealer licence, under the General Business Law provisions the city's own inspection checklist cites.

Outside New York City

There is no state licence to fall back on, so the requirement is whatever the municipality imposes — and it varies between cities, towns and villages. Check the local code where you operate. Sales tax registration and the marking rules apply wherever you are in the state.