Most of those who do — license in a statewide-fashion, while the others license by county, region or product segment.
However, in these license states, there are exemptions for licensing. Thus our topic today.
First, let’s look at what a typical state constitutes as “engaging in the auction business.”
License states generally consider a person (actually a person or a partnership, LLC and/or corporation) as engaging in the auction business if they satisfy any component of this three-prong test:
- Hold themselves out as an auctioneer
- Contract for auctioneering services
- Perform bid calling, either for a seller or in assisting another auctioneer
Therefore, if a person:
- Is telling people that he is an auctioneer, putting up a sign, publishing a website, or otherwise presenting himself as an auctioneer — he must be licensed.
- Signs an auction contact with a seller or other auctioneer — he must be licensed.
- Bid calls, for his own auction or at another auctioneer’s auction — he must be licensed.
However, there are some exemptions to licensing; these exemptions typically fall into one of these four categories:
- Court ordered auction or an auction conducted under public authority
- Owner selling his own property at auction, if that property was not acquired for the purpose of resale
- An auction sponsored by a 501(c)(3) or nonprofit organization, if the auctioneer is not compensated
- Real or personal property strictly sold via the Internet
What’s important for auctioneers and the general public seems to be … there are some other common exemptions cited by auctioneers, which in fact are not truly exemptions.
For instance, auctioneers will say, “I don’t need an auctioneer’s license” in a particular license state, because:
- “I’m not being compensated.”
- Typically only if the auction is for a 501(c)(3) or nonprofit.
- “I am working in partnership, or with another licensed auctioneer.”
- Not an exemption in any license state.
- “I’m just doing this one auction — there’s a one-auction exemption.”
- Some states issue one-auction exemptions, or licenses, but actually a license is typically needed.
- “I’m selling my own property.”
- Only if the items were acquired for some other purpose than resale.
- “My home state has a reciprocal arrangement with this license state.”
- Typically, only if the auctioneer actually holds the reciprocal license.
- “It’s like my driver’s license — I have a license in my state, so I can auctioneer anywhere.”
- Auctioneer licenses don’t work this way.
- The live component of this auction would require a license.
- License requirements don’t require possession of either.
In summary, it is prudent for the general public to ensure the auctioneer they’re hiring, or the auctioneer selling them property, is properly licensed.
Furthermore, it is even more important for every auctioneer to ensure he or she is properly licensed wherever he or she is “engaging in the auction business.”
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.