Secondhand tax hike puts the squeeze on Guitar and Bass Land

“I do trades and trade-ins, consignments, and I buy used gear.” But Thom Beebe, owner of Guitar and Bass Land/Skin City Drums in El Cajon, says he won’t be doing that for much longer, due to a sudden increase in the cost to renew his shop’s secondhand/pawnbroker license.

“The initial application was $125, and there has been a renewal fee of 10 dollars each year since I opened in 2008.” But the price to renew this year is a whopping $588. A secondhand/pawnbroker license is required by law to purchase and sell used musical equipment. Beebe’s ran out on November 4.

“Used guitars and used amps are a big source of my income,” he says. He produces a small black file box from behind the counter. “This is my kit. When someone comes in and sells me used gear, I have to fill out a form, fingerprint the seller, and hold the gear in the back for 30 days minimum.” He says the policy was put in force to prevent the trafficking of stolen equipment.

“But I’ve been doing this for a long time. If someone comes in and they’re all sketchy and grinding their teeth, I’m not gonna buy their stuff.”

A demand letter dated October 23 bearing the official seal of the City of El Cajon breaks down the new and revised secondhand/pawnbroker fee structure, pursuant to Assembly Bill 391. For active license renewals after August 17, there is a one-time application cost of $288, plus an annual renewal fee of $300, payable to the El Cajon Police Department.

“We have nothing to do with setting the fees,” says Shannel Honore, who is the Records Division manager at the El Cajon Police Department. “We’re only responsible for collecting the money.” She has no idea why the fee increased. She directs further questions to the area congressman. She explains that the tax gouge will eventually hit every music retailer in San Diego as their individual secondhand/pawnbroker licenses expire. It is not just an El Cajon thing. “Since this is coming from the Department of Justice, the rate hike is throughout the state.”

But calls to area guitar shops reveal a general ignorance of the new fees. “Our renewal isn’t due until next March,” says Jeff Baumgart, manager of Guitar Trader in Kearny Mesa. “It’s a huge increase,” he says, when I read him the collection notice, “but we’ll just have to absorb it.”

Beebe says that his business has been slower this year than usual. And, right now, $588 is blood money. “When my license expires,” says Beebe, “I won’t renew it, and after that, I won’t be able to buy used gear anymore.”