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ErikTheRed
05-08-2009, 1:32 AM
If I were to purchase a gun from another CalGuns member who lives within California, and he ships the gun to my FFL, will I pay tax on that gun? I know FTF PPT's do not get taxed, but not sure about transfers that are shipped to FFL's. Does the FFL accept the gun into dealer inventory when receiving a shipped firearm from within the state or only when receiving out-of-state transfers? If it becomes dealer inventory, it would mean the FFL is technically selling the gun to me (not transferring), in which case it would be taxed.

Thanks!

halifax
05-08-2009, 4:48 AM
I believe the BOE considers those sales as "occasional" and not subject to sales/use tax. Only firearms that come from a retailer's/dealer's inventory would be subject to sales/use tax. Just because it's in your A/D book doesn't make it part of "inventory".

JagerTroop
05-08-2009, 6:20 AM
I just talked with a local dealer, and he told me that out of state transfers are taxed. I believe you are correct about it 'becoming dealer inventory'.

BigMac
05-08-2009, 6:30 AM
Just because it's in your A/D book doesn't make it part of "inventory".

Actually, yes it does.

halifax
05-08-2009, 7:12 AM
Actually, yes it does.

Maybe to the BATF, but do you count the firearms in your safe (that you paid no money for) which have been DROSed and in the 10-day wait when you file your taxes?

I've never considered those part of my inventory for tax purposes. I could be wrong.

halifax
05-08-2009, 7:46 AM
Back to the OP. See http://www.calguns.net/calgunforum/showthread.php?t=101320 post #9

When a licensed firearms dealer processes a transfer for a customer, the dealer would be liable for the tax in situations where the seller is a retailer that is not engaged in business in this state. If the seller of the firearm is an individual rather than a retailer, the dealer would still be liable for the tax if the dealer finds the buyer for the firearm. If the seller of the firearm is an individual rather than a retailer and the buyer and seller agree to the sale of the firearm without any prior assistance from the dealer, the transaction would likely qualify as an occasional sale and would not be subject to tax.

So, if the CA dealer had nothing to do with purchase other than the required paperwork, buying from an individual is an "occasional sale" and not subject to sales/use tax. (BTW, that applies to PPT, intra-state, and inter-state transfers.)

dfletcher
05-08-2009, 8:59 AM
As a practical matter, on an intra or interstate sale between two unlicensed individuals how would the FFL know how much to charge for tax? I've done quite a few transfers, I don't recall my FFLs ever having the slightest idea of what I paid - if asked, I think I could keep a straight face and say "I paid $250.00 for that 6" 1957 made Colt Python ....."

halifax
05-08-2009, 9:38 AM
As a practical matter, on an intra or interstate sale between two unlicensed individuals how would the FFL know how much to charge for tax? I've done quite a few transfers, I don't recall my FFLs ever having the slightest idea of what I paid - if asked, I think I could keep a straight face and say "I paid $250.00 for that 6" 1957 made Colt Python ....."

The dealer wouldn't be charging tax on an occasional sale, so it doesn't matter.

ErikTheRed
05-08-2009, 4:36 PM
Very good. Thanks for the hellp!!

paladin4415
05-08-2009, 8:18 PM
IIRC this would not be a PPT if the firearm is shipped in to an FFL. For a PPT, both parties and the firearm being transferred have to be together at the FFL at the time the paperwork is being done.

pTa
05-08-2009, 8:29 PM
Any business is only required to charge sales tax on item's in their store's retail inventory (for an ffl; this means firearms, ammo and accesories they purchased to sell to their customers). Entering firearms into their books just logs that it was received by them on such and such date.
There are ffls that charge "sales tax" to just tack on more $$$ for themselves (above and beyond their service fee).
See; Inbert n Smytherz.

Rudolf the Red
05-08-2009, 8:45 PM
IIRC this would not be a PPT if the firearm is shipped in to an FFL. For a PPT, both parties and the firearm being transferred have to be together at the FFL at the time the paperwork is being done.

This is how I understand it to be. There are other thoughts on this but I stick with the quote's.

It's a rumor I was told by a DOJ agent.

bohoki
05-08-2009, 8:56 PM
how much is the tax? isn't what a person paid for it a privacy issue between the buyer and seller and what precident would using blue book value for tax is there?

Rudolf the Red
05-08-2009, 9:04 PM
how much is the tax? isn't what a person paid for it a privacy issue between the buyer and seller and what precident would using blue book value for tax is there?

I would not tax a PPT. Only new guns and transfers from out of state.

bohoki
05-08-2009, 10:00 PM
I would not tax a PPT. Only new guns and transfers from out of state.

that is what we are talking about a private purchase that has to be shipped in

becxltoo984
05-08-2009, 10:20 PM
"Its Called a use Tax "

http://www.boe.ca.gov/ads/news06.htm

bohoki
05-08-2009, 10:24 PM
"Its Called a use Tax "

http://www.boe.ca.gov/ads/news06.htm

duh but the boe seems to think it is the duty of the ffl to collect the use tax

halifax
05-09-2009, 4:37 AM
IIRC this would not be a PPT if the firearm is shipped in to an FFL. For a PPT, both parties and the firearm being transferred have to be together at the FFL at the time the paperwork is being done.

What would not be a PPT? The OP was asking about an in-state firearm transaction shipped between private individuals. He knew it was not a PPT.

If I were to purchase a gun from another CalGuns member who lives within California, and he ships the gun to my FFL, will I pay tax on that gun? I know FTF PPT's do not get taxed, but not sure about transfers that are shipped to FFL's. Does the FFL accept the gun into dealer inventory when receiving a shipped firearm from within the state or only when receiving out-of-state transfers? If it becomes dealer inventory, it would mean the FFL is technically selling the gun to me (not transferring), in which case it would be taxed.

Thanks!


See post #6. The quoted part is from a email communication directly from the BOE to me. In it, the BOE says that if the dealer had nothing to do with the prior arrangement for the sale between two non-licensed individuals, the sale is considered an "occasional" sale and NOT taxable. So, it doesn't matter if the two non-licensed individuals are two feet apart, two counties apart, or two states apart.

An example:

CA resident buys a firearm from a retailer selling on Gunbroker: TAXABLE

CA resident buys a firearm from a non-licensed individual on Gunbroker: NOT TAXABLE

halifax
05-09-2009, 4:52 AM
Any business is only required to charge sales tax on item's in their store's retail inventory (for an ffl; this means firearms, ammo and accesories they purchased to sell to their customers). Entering firearms into their books just logs that it was received by them on such and such date.
There are ffls that charge "sales tax" to just tack on more $$$ for themselves (above and beyond their service fee).
See; Inbert n Smytherz.

That is a very serious charge. If you have proof that Imbert & Smithers is keeping sales tax revenue you should turn them in.

Suchar-Enterprises
05-12-2009, 3:09 PM
I have been a dealer for a while and don't agree with this business of dealers collecting tax on out of state transfers; it's a nightmare trying to keep my books straight and the state is not paying dealers to be there tax colletors. The BOE, like most Gov agencies, is clueless about there own laws and you're likely to get a different answer each time you call if you even get an answer. Below is the written tax code (which is well hidden on the BOE sight and I challenge you to find it with out using the code section number). I have to give the credit for the foot work to our loyal attorney friend Chuck Michel of Trutanich - Michel, LLP. Here's the link to the BOE sight page for those who don't want to spend a lovely afternoon searching for this info... http://search.ca.gov/search?q=495.0848+&output=xml_no_dtd&site=ca_boe&client=ca_boe&proxystylesheet=ca_boe


CALIFORNIA SALES AND USE TAX ANNOTATIONS



495.0848
Delivery by Licensed Firearm Dealer.
A California resident
purchased a firearm from an out-of-state retailer who is not engaged in business
in California. The California customer contacts a licensed California firearm
dealer and states that he paid money to an out-of-state dealer and wishes for the
dealer to have the firearm shipped to the dealer’s place of business and legally
transfer the firearm to him. The dealer contacts the out-of-state seller and
arranges to have the firearm sent to him. Upon receipt of the firearm (prepaid by
the customer), the dealer logs the firearm into his Federal Acquisition/Disposition
books. The customer then fills out the State Department of Justice Firearms
Dealer Record of Sale. The dealer collects the state fee of $14.00 plus a $16.00
charge to cover the dealer’s expenses.
When a licensed 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 dealer is the retailer of the firearm. In such a case, the
dealer would owe sales tax on the total amount of the sales price of the gun,
including the Department of Justice fee passed on to the customer and including
the dealers service charge. (Section 6007.)
If the out-of-state retailer was engaged in business in this state under section
6203, the California dealer’s deliveries for that retailer will not be considered
taxable retail sales by the 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, the
out-of-state retailer has the duty to collect the use tax under section 6203 and that
retailer should collect tax on the invoice price of the firearm plus the dealer’s
service charges and the Department of Justice fee that is passed on the customer.
10/26/95. (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.)

Suchar-Enterprises
05-12-2009, 3:16 PM
CA dealers that are not collecting tax as required or keeping state taxes for themselves is a very serious situation and could cause problems for all the honest dealers who are trying to obey the law. During my last DOJ and ATF inspection I was asked if I collected tax on out of state transfers and asked to show proof; fortunately I keep all of my transfer paper work together including my business invoices that show tax was collected.

halifax
05-12-2009, 4:10 PM
CA dealers that are not collecting tax as required or keeping state taxes for themselves is a very serious situation and could cause problems for all the honest dealers who are trying to obey the law. During my last DOJ and ATF inspection I was asked if I collected tax on out of state transfers and asked to show proof; fortunately I keep all of my transfer paper work together including my business invoices that show tax was collected.

Never had the ATF inspectors ask me any thing financial. The DOJ guy did make it perfectly clear that I couldn't charge more than $35 for a PPT though. That's the only financial type question he asked.

tonelar
05-12-2009, 10:06 PM
I bought a Ruger Vaquero from someone in Lake County. Had a peninsula ffl receive it for me. They charged me sales tax on their service fee as well as the blue book value of the pistol. They didn't care what the sellers receipt said.

I didn't like it, but wanted the pistol more. I just don't go to their store anymore.

pTa
05-12-2009, 10:14 PM
That is a very serious charge. If you have proof that Imbert & Smithers is keeping sales tax revenue you should turn them in.

Did I say Imbert and Smithers? Home of the $50 PPT Fees?

I told them it was purchased from an individual and exempt from sales tax and they told me to pay up or shut up.
I honestly don't know they kept it for themselves. I just know they were being d_cks.