Legal-Ease: Social networks buy, sell, exchange…need a license?

Before the Internet and social media took over many aspects of business and interpersonal interaction, written publications were the main method of formal marketing of goods and services for sale. Believe it or not, at one time advertising publications were among the best-selling print publications in the country, with readers sometimes browsing for hours to get the most recently printed copies of magazines that advertised items for sale.

Now, with social media platforms available all over the internet, ordinary people like you and me can find themselves engaged in buying and selling items and services online. In fact, online “garage sale” sites are all the rage these days, as people search for places to buy, sell, or exchange goods and services.

Most of the time, people can get away with buying or selling something sporadically without having a license to buy or sell that item. For example, if I ever sold my truck, I could sell my truck to someone (possibly featured via social media) without a license. This sale of my truck is considered an “occasional” sale.

The need for licenses increases as the quantities of items of a particular category that are bought and sold increase to become a regular (even if not full-time) business. This column does not include an exhaustive list of all the licenses required for the different categories of “things” sold online. However, there are a few categories of items for which licenses are frequently required, and anyone advertising or selling more than a handful of a category of goods should check to see if a license is required.

Usually, anyone who makes occasional sales of five or more new or used motor vehicles (cars, trucks, all-terrain vehicles with engines but no snowmobiles) in a 12-month period must have a allowed. The licensing process includes requirements for minimum business hours as well as various other consumer protection requirements. Of course, anyone working in the motor vehicle advertising, rental or sales business needs a permit, even if fewer than five sales/rental transactions occur in any given year. .

Similarly, those who buy, sell, or trade five or more mobile homes (also called manufactured homes) in a year must hold a mobile home dealer’s license.

Every auctioneer, including those involved in building equipment auctions, needs a license.

Notably, however, the marketing, sale or rental of agricultural machinery (defined as “all machinery and tools used in the production, harvesting and maintenance of agricultural products”) does not require a license. However, farm machinery (for determining if a sales permit is required) that may have a motor vehicle registration tag (commonly referred to as a license plate) is considered a motor vehicle and not a farm machine.

Anyone selling more than two or three items in the same or similar category within a time window of a few months is strongly advised to search online (relying only on government websites) or contact a lawyer to confirm that these sales are not sales of items that require a license.

Lee R. Schroeder is an Ohio licensed attorney with Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agricultural matters in Northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to be used as legal advice, and specific advice should be sought from the licensed attorney of your choice based on the specific facts and circumstances facing you.

Milton S. Rodgers