PDA

View Full Version : Sales tax and Out of state transfers


nickvig
03-08-2009, 10:38 AM
A thread in the rifle forums got me started on this question....but here's a little background first...

About 8 months ago I got the bug for Kimber Custom II. I did some research at the local gunshops (Tuners, Oaktree, Firingline, etc.) and found the best deal at $880 OTD including DROS. The gun lists at $828.00 per the Kimber website, so the best deal was about $20 off of list.

I tell my father who used to live in CA but is now a VA resident that I've been looking for the Custom II. There just happened to be a gunshow in the area that weekend so he kept an eye out for me for a Custom II. He finds one for $675 plus tax and VA background check. He ends up with the gun for about $720 OTD. The plan was to have it shipped and transferred to me, but after calling around, the $100-$150 transfer fee and the sales tax would put the gun right back at the price I would have paid buy just buying it locally.

So here's my first question. How much margin is there in selling a firearm that a gunshop in VA can afford to reduce the price by approximately 18% and a store in CA can not?

Secondly....I've ready very conflicting information about sales tax on out of state transfers.

http://www.calguns.net/calgunforum/showthread.php?t=137688

Is there something in writing that shows the BOE stance on collecting tax from out of state sales?

Third....I've also read conflicting info about intra-familial transfers. Since my father is a VA resident, it still shows as an out of state sale and it has to be done through a FFL as it would be if I was purchasing from a dealer or any other party not related to me, correct?

hawk1
03-08-2009, 11:12 AM
First you need to call around as you can find better prices to transfer in the pistol. Some FFL's will collect tax some don't. That you can find out as well by asking.

BOE writings;
"495.0843 Deliveries by California Firearm Dealers for Out-of-State
Retailers. California residents order firearms from out-of-state
retailers and the retailers ship the firearms to an authorized
California firearm dealer for delivery to the customer. The California
firearm dealer charges a fee to register each firearm in California.
When the California firearm dealer completes the registration paperwork
and delivers a firearm to a California purchaser for an out-of-state
retailer not registered with the Board as a retailer engaged in business
in this state, it is presumed that the firearm dealer is the retailer of
the firearm under the second paragraph of section 6007. In such a case,
the firearm dealer would owe sales tax on the total amount of the retail
sales price of the gun to the customer, including the Department of
Justice fee if passed on to the customer, and including any service
charge made by the firearm dealer.


If the firearm dealer establishes to the satisfaction of the Board that
the out-of-state retailer was engaged in business in this state under
section 6203, its deliveries for that retailer will not be considered
taxable retail sales by the firearm dealer, even if the out-of-state
retailer has not registered with the Board as a retailer engaged in
business in this state. In such cases, as well as in situations in which
the retailer is in fact registered as a retailer engaged in business in
this state, the out-of-state retailer has a duty to collect the use tax
under section 6203.s The retailer should collect use tax on the invoice
price of the firearm, plus the service fee, even if paid directly to the
firearm dealer by the customer. Also, the
Department of Justice fee passed onto the customer should be included in
the measure of tax. 12/7/95. (Am. 99-2).


(Note: On and after January 1, 1999, the Department of Justice fee is
not
includible in the measure of tax, but all other charges remain subject
to tax.)"


It can be argued that the FFL has no business collecting the tax. You can do a search and read tons of information in regards to this.

I'll send you a pm with some info.

5150Marcelo
03-08-2009, 11:25 AM
If thats the case, just tell the FFL shipping the firearm NOT to include the receipt of payment, and to mail it directly to you, and tell the FFL receiving the firearm that the firearm was a trade or givin to you.

I think its totally BS that there are FFLs that will collect the tax. I think the ones collecting it are pocketing it to be honest. Also, the ones on this forum saying that they would collect the taxes, I wouldnt shop at there business anyway. My FFL charges me $25 transer + $25 DROS + and thats it, combined with the cost of the items I can get outta state are still wayyyy cheaper than what I can get them local/in-state vendors... brutal truth.

I HAVE NEVER PAID TAXES ON AN OUT OF STATE ITEM BEING SHIPPED INTO MY RESIDING STATE.

halifax
03-08-2009, 11:28 AM
Are you saying that your father purchased the firearm and now wants you to have it?

If so, that is an occasional sale between private parties and for tax purposes would not require you to pax CA sales/use tax per BOE.

Also, find a cheaper transfer dealer.

Bobotheclown
03-08-2009, 11:35 AM
If you dad bought the gun and he wants to give you the gun, it would be an inter-family transfer. All he has to do is ship the firearm to a FFL that is ok with receiving firearms from a private citizen. You then DROS the gun. No tax since it's a PPT. $100 to receive the firearm is excessive. You can find cheaper ones out there. Ade's is $50 plus DROS.

Post about inter-family transfer across state lines (http://www.calguns.net/calgunforum/showthread.php?t=92147)

nickvig
03-08-2009, 11:54 AM
Thanks for the links and info. A couple of guys have pointed me to FFL's who charge less (thanks USN Chief and hawk1). I will definitely check them out.

ontargetrange
03-08-2009, 5:08 PM
As a retailor in this wonderful state I can give you the reason I am forced to charge sales tax -- try surviving a Sales Tax Audit -- especially in these times of budget cuts and budget losses -- the goal of the agency is to get every dime and penalty they can -- you are toast when they show up --- the earlier advice of a transfer saves money for people when I have to deal with a transfer.

If I am listed as a retailor for a particular firearm I am then "obligated" to consider the firearm as sold through me and that I should collect sales tax -- I have been informed that Kalfiornia will not look fondly at someone trying to get around paying taxes - ever ---

This is not a user friendly State and we need to be careful when ordering our toys that we get out of paying the extra fees

shootin' nuke
03-09-2009, 10:01 AM
As a retailor in this wonderful state I can give you the reason I am forced to charge sales tax -- try surviving a Sales Tax Audit -- especially in these times of budget cuts and budget losses -- the goal of the agency is to get every dime and penalty they can -- you are toast when they show up --- the earlier advice of a transfer saves money for people when I have to deal with a transfer.

If I am listed as a retailor for a particular firearm I am then "obligated" to consider the firearm as sold through me and that I should collect sales tax -- I have been informed that Kalfiornia will not look fondly at someone trying to get around paying taxes - ever ---

This is not a user friendly State and we need to be careful when ordering our toys that we get out of paying the extra fees

+1. Our shop has had to deal with the BOE, and they are no fun. A dealer who will transfer a weapon without charging sales tax is taking a big risk. Think fines, big fines. When people ask how they can change it, I give them the same answer as I give reguarding firearms laws: Write your elected representatives!!

EOD Guy
03-10-2009, 7:16 AM
If thats the case, just tell the FFL shipping the firearm NOT to include the receipt of payment, and to mail it directly to you, and tell the FFL receiving the firearm that the firearm was a trade or givin to you.

I think its totally BS that there are FFLs that will collect the tax. I think the ones collecting it are pocketing it to be honest. Also, the ones on this forum saying that they would collect the taxes, I wouldnt shop at there business anyway. My FFL charges me $25 transer + $25 DROS + and thats it, combined with the cost of the items I can get outta state are still wayyyy cheaper than what I can get them local/in-state vendors... brutal truth.

I HAVE NEVER PAID TAXES ON AN OUT OF STATE ITEM BEING SHIPPED INTO MY RESIDING STATE.

You just admitted to continued violations of California law. Even if you don't pay sales tax at time of purchase, you are required by law to pay the equivilent use tax when you file your state income taxes.

We all know that all Calgunners are law abiding citizens and pay their taxes in full.;)