Location:
LICENSING; RETAIL TRADE;

OLR Research Report


April 22, 2009

 

2009-R-0181

LICENSURE & REGISTRATION FOR SALES OF SECONDHAND GOODS

By: Meghan Reilly, Legislative Analyst

You asked what licenses are required for sellers of secondhand goods obtained from purchasing entire estates.

SUMMARY

There is no license specifically authorizing purchasers of estates to sell the articles within the estate. But certain licenses are required if the goods will be sold at auction or meet the requirements for sale by a junk dealer or precious metals and stones dealer.

Towns require auction licenses, applications for which must be filed at least three days before the auction, for anyone who does not live in that town.

Junk dealers selling junk, old metals, scrap, rags, waste paper, or other secondhand articles must register their vehicles with the Department of Motor Vehicles (DMV) and obtain a license from the municipality authorizing their place of business.

Precious metals dealers buying gold; silver; items plated with gold, silver, or platinum; watches; jewelry; precious stones; or coins must be licensed by the chief of police, or if there is none, the first selectman of the municipality in which they do business.

AUCTIONS

Anyone conducting an auction in a town in which he or she does not live must be licensed by that town, with certain exceptions (CGS 21-1). The law does not apply to auctions of provisions, charcoal, wood, farm products, and secondhand household furniture, or to auctions conducted by or for the state pursuant to a court order.

License applications must be written and filed at least three days before the auction. The licensing authority may revoke the license if it is “for the public interest” (CGS 21-2). Failure to obtain a license is punishable by imprisonment up to 60 days, a fine of up to $500, or both.

Towns cannot charge a fee to a blind auctioneer and noncommercial educational broadcast facilities (such as CPTV) are exempt (CGS 21-5 and 21-5a).

JUNK DEALERS

A "junk dealer" is any person engaged in business as a dealer and trader in junk, old metals, scrap, rags, waste paper or other secondhand articles (CGS 21-9). This does not apply to any dealer in motor vehicles, or antique household furniture, china, or glassware (CGS 21-14).

A town may make ordinances licensing junk dealers, including charging a license fee set by the selectmen of between $2 and $10 annually per team or vehicle used in connection with the business. Junk dealers must also register with the Department of Motor Vehicles (DMV). The DMV must issue a certificate of registration to junk dealers upon application. The junk dealer must provide his name, residence and post-office address. The junk dealer must show the certificate to the selectmen or other authority to whom he makes application in any town for a license. Any town, city, or borough may, by ordinance, regulate the establishment, location, or conduct of any junk yard within its territorial limits unless there is a duly constituted local zoning or planning commission (CGS 21-10). A "junk yard" means any place in or on which old metal, glass, paper, cordage or other waste or discarded or secondhand material, which has not been a part, or is not intended to be a part, of any motor vehicle, is stored or deposited (CGS 21-9).

Anyone engaging in business as a dealer and trader in secondhand bicycles, junk, metals, or other secondhand articles in any town, city or borough shall make application to the selectmen of the town, the mayor or chief of police of the city, or the warden of such borough for a license to transact business within the town, city, or borough limits. The officials must issue a license designating the place of business to suitable persons and may revoke any such license for cause. Such dealers must also pay to the licensing authority a fee of between $2 and $10, determined by the authority, and a $10 annual renewal fee.

Each dealer must keep a book recording in written English (1) a description of articles received, (2) the name, residence, and general description of the person from whom articles were received, and (3) the time and hour when the property was received. The book, all articles of property mentioned therein, and the place of business may be examined at any time by the selectmen, chief of police, or either's designee. Each dealer must make sworn statements weekly of all his transactions to the chief of police in the case of cities or boroughs and, in other cases, to the town clerk. A dealer must keep all goods at least five days after the filing of such statement (CGS 21-11).

Junk dealers must display on each vehicle used for the business (1) the name of the person conducting such business, (2) the number of the license under which such business is being conducted, and (3) the name of the municipality where such license was granted. The names and number must be painted upon the outside of the vehicle in letters at least four inches in height and two inches in width (CGS 21-12).

Acting as a junk dealer without meeting these provisions is punishable by a fine of up to $50, up to 3 months imprisonment, or both (CGS 21-13).

PRECIOUS STONES

Under CGS 21-100, a “precious metal and stone dealer” is anyone who is in the business of buying gold; silver; items plated with gold, silver, or platinum; watches; jewelry; precious stones; or coins. Manufacturers are exempt. The law requires that these dealers be licensed by the chief of police, or if there is none, the first selectman of the municipality in which they do business. Licenses may be revoked for cause and licensing authorities may not issue them to anyone convicted of a felony. The licensing authority may require an applicant to submit to state and national criminal history records checks.

Unlike pawnbrokers, precious metal and stone dealers are not required to retain purchased goods for a specified period. One reason for the difference may be that pawnbrokers lend money on deposits or pledges of personal property (e.g., jewelry or household goods), or buy the property with the agreement to sell it back to the owner at a later date. Precious metal and stone dealers purchase goods like gold, silver, and jewelry without any agreement to sell them back.

But precious metal and stone dealers must safeguard against receiving and disposing of stolen goods, a form of larceny. Specifically, they must demand positive identification from sellers. They must also keep records of each transaction, including a description of the goods, the price paid, the seller's name and address, the type of identification presented, and the day and time the goods were received. The information must be written down at the time the transaction takes place. Any state or municipal police officer may have access to the required records and inspect the business establishment and the goods purchased or received.

Precious metal and stone dealers cannot purchase goods from a minor who is not accompanied by a parent or guardian. They must pay for goods by check, draft, or money order. Cash may not be transferred to either party in the course of a transaction. They must give sellers receipts containing the same information they are required to keep, the amount paid for the goods, and the business's name and address.

The licensing authority may require dealers to make a weekly sworn statement describing the goods received during the week. These statements are not subject to disclosure under the Freedom of Information Act.

MR:ak