PDA

View Full Version : PPT fees


magsnubby
07-22-2009, 11:44 AM
Is there a set fee an FFL can charge for an PPT? I was told by an FFL that by law they can only charge $35 for a transfer. I know one FFL that charges $50 "Because that's just our fee ".

Fjold
07-22-2009, 12:19 PM
He's breaking the law because no one will do anything about it.

magsnubby
07-22-2009, 12:30 PM
He's breaking the law because no one will do anything about it.

I will. What needs to be done?

ke6guj
07-22-2009, 12:32 PM
Yes, the maximum fee for a PPT transfer is $35. $25 DROS + $10 max dealer fee. It is only a PPT if both parties are CA-residents and both appear in front of the dealer at the same time. Anything else, and it isn't a PPT, and the dealer is not limited to a $10 dealer fee, but can charge any fee he wishes.

ke6guj
07-22-2009, 12:36 PM
I will. What needs to be done?If you are sure it is a PPT, you might want to print out the PC and the FAQ that mention the $35 max fee. Some people have done this and received a refund for the overcharge. Others have called CADOJ to complain about it.

It is a misdemeanor to charge over $35 total for a PPT, so the dealer should be following the law.


What fees can I charge for handling a Private Party Transfer (PPT)?
If the transaction is a PPT, you are restricted to charging no more than $25.00 in State fees described and $10.00 per firearm for conducting the PPT. For example:

For a PPT involving one or more handguns, the total allowable fees are $35.00 for the first handgun, and $31.00 for each subsequent handgun.
For PPTs involving one or more long guns, the State fees are limited to $25.00 for the whole transaction plus $10.00 dealer fee per firearm transferred.
(PC section 12082)

12082. (a) A person shall complete any sale, loan, or transfer of a firearm through a person licensed pursuant to Section 12071 in accordance with this section in order to comply with subdivision (d) of Section 12072. The seller or transferor or the person loaning the firearm shall deliver the firearm to the dealer who shall retain possession of that firearm. The dealer shall then deliver the firearm to the purchaser or transferee or the person being loaned the firearm, if it is not prohibited, in accordance with subdivision (c) of Section 12072. If the dealer cannot legally deliver the firearm to the purchaser or transferee or the person being loaned the firearm, the dealer shall forthwith, without waiting for the conclusion of the waiting period described in Sections 12071 and 12072, return the firearm to the transferor or seller or the person loaning the firearm. The dealer shall not return the firearm to the seller or transferor or the person loaning the firearm when to do so would constitute a violation of subdivision (a) of Section 12072. If the dealer cannot legally return the firearm to the transferor or seller or the person loaning the firearm, then the dealer shall forthwith deliver the firearm to the sheriff of the county or the chief of police or other head of a municipal police department of any city or city and county who shall then dispose of the firearm in the manner provided by Sections 12028 and 12032. The purchaser or transferee or person being loaned the firearm may be required by the dealer to pay a fee not to exceed ten dollars ($10) per firearm, and no other fee may be charged by the dealer for a sale, loan, or transfer of a firearm conducted pursuant to this section, except for the applicable fee that the Department of Justice may charge pursuant to Section 12076. Nothing in these provisions shall prevent a dealer from charging a smaller fee. The fee that the department may charge is the fee that would be applicable pursuant to Section 12076, if the dealer was selling, transferring, or delivering a firearm to a purchaser or transferee or a person being loaned a firearm, without any other parties being involved in the transaction.
(b) The Attorney General shall adopt regulations under this section to do all of the following:
(1) Allow the seller or transferor or the person loaning the firearm, and the purchaser or transferee or the person being loaned the firearm, to complete a sale, loan, or transfer through a dealer, and to allow those persons and the dealer to comply with the requirements of this section and Sections 12071, 12072, 12076, and 12077 and to preserve the confidentiality of those records.
(2) Where a personal handgun importer is selling or transferring a pistol, revolver, or other firearm capable of being concealed upon the person to comply with clause (ii) of subparagraph (A) of paragraph (2) of subdivision (f) of Section 12072, to allow a personal handgun importer's ownership of the pistol, revolver, or other firearm capable of being concealed upon the person being sold or transferred to be recorded in a manner that if the firearm is returned to that personal handgun importer because the sale or transfer cannot be completed, the Department of Justice will have sufficient information about that personal handgun importer so that a record of his or her ownership can be maintained in the registry provided by subdivision (c) of Section 11106.
(3) Ensure that the register or record of electronic transfer shall state the name and address of the seller or transferor of the firearm or the person loaning the firearm and whether or not the person is a personal handgun importer in addition to any other information required by Section 12077.
(c) Notwithstanding any other provision of law, a dealer who does not sell, transfer, or keep an inventory of handguns is not required to process private party transfers of handguns.
(d) A violation of this section by a dealer is a misdemeanor.

kermit315
07-22-2009, 5:33 PM
another one huh, color me surprised.

magsnubby
07-23-2009, 12:43 AM
If you are sure it is a PPT...

It was most definitely a PPT. When questioned about the $50 fee (yeah. 50 bucks) they just gave a lame explanation of "That's what we charge".

I will be calling CADOJ. We are both Cal residents and we were both there to do the transfer.

kemasa
07-23-2009, 1:01 PM
It is only a PPT if both parties are CA-residents and both appear in front of the dealer at the same time.

This is not correct. The parties can appear at the dealer at different times. Obviously, the seller has to appear first and has to sign the DROS worksheet, which is attached to the DROS that the buyer signs after it is submitted. This is often how consignment sales, especially if the firearm is not on the certified list, are processed. Call the CA DOJ to confirm this.

ke6guj
07-23-2009, 1:53 PM
OK, maybe they don't need to both appear at the dealer at the same time, but they both must appear at the same dealer, correct? That "split-PPT" method may or may not work. But when does a "delayed PPT" as you brought up become a "cosignment" of sorts in which the FFL can charge a fee for, as he can for a cosignment sale?

kemasa
07-23-2009, 2:16 PM
Yes, they must both appear at the same dealer.

I am not sure of what you mean by "split-PPT".

The consignment depends on how the DROS is submitted. The FFL gets part of the sale price, so the FFL fee does not matter as much, but even if it is transferred as a PPT, in that case sales tax must be collected since the FFL got involved with the sales price, as well as finding a buyer. The only reason for the FFL to submit it as a PPT for a consignment is when the firearm is not on the certified list, which would limit the fee.

ke6guj
07-23-2009, 2:25 PM
Yes, they must both appear at the same dealer.

I am not sure of what you mean by "split-PPT"."split-PPT" was a thought that you could go to one dealer, fill out the DROS worksheet and send it, along with a non-rostered handgun, to a second dealer, who would finish the worksheet and DROS it to the buyer. A way to PPT non-rostered handgun for buyers and sellers who were too far apart to both go to the same FFL.

Aparantly a few FFL are/were willing to a "split-PPT" but I think that CADOJ told them "no more".

The consignment depends on how the DROS is submitted. The FFL gets part of the sale price, so the FFL fee does not matter as much, but even if it is transferred as a PPT, in that case sales tax must be collected since the FFL got involved with the sales price, as well as finding a buyer. The only reason for the FFL to submit it as a PPT for a consignment is when the firearm is not on the certified list, which would limit the fee.
AFAIK, there is some grey area in the cosignment sales rules. I don't recall if hte PC actually allows for it, or that CADOJ allows for it because they'd rather the sales be DROSed, instead of sold on the street.

kemasa
07-23-2009, 2:46 PM
I think that the CA DOJ allows for a consignment sale as a PPT because there is really no difference between that and a PPT when the people come at separate times.

It would be hard to prove that the seller did not sign the DROS worksheet at the buyer's FFL, but it is certainly not worth the risk.

One thing that is funny is that it is possible to submit a DROS at a gunshow without having to swipe the drivers license, but it is also said that the FFL has to read it in when the buyer comes to pick it up. There is instructions to save the info to a text file. You can swipe it and if it does not read, you have to copy it. The funny thing is that there is a requirement that you swipe it, even if it no longer makes sense to do so, but it is the law.

ke6guj
07-23-2009, 2:56 PM
I think that the CA DOJ allows for a consignment sale as a PPT because there is really no difference between that and a PPT when the people come at separate times.true. But then how can a dealer charge more than a $10 fee if it is DROSed as a PPT?

It would be hard to prove that the seller did not sign the DROS worksheet at the buyer's FFL, but it is certainly not worth the risk.yup, the buyer's FFL would be at the mercy of the seller's FFL, that the correct info is there, etc.

kemasa
07-23-2009, 3:05 PM
For the FFL fee, the FFL could not charge more than $10 plus the DROS if it is submitted as a PPT, but the person has to pay for the firearm and that is not limited, so the extra money can be put there. It matters how you word it, not the total price.

There are many things which could be said about a PPT and ways to get around the requirements, but there is nothing gained by the FFL and the risk is simply not worth it. I thought about giving some examples, but I don't want to give anyone some ideas.

kermit315
07-23-2009, 3:17 PM
There is no way to "get around the requirements" as you put it. Its in black and white. Tax collection on the sale price of the gun is a different beast.

PPT fees are black and white. Show me an exception in the PC that allows you to charge more.

kemasa
07-23-2009, 3:25 PM
When you are involved in the selling price of the firearm, you can get around it. You don't know what the agreement is in terms of who gets what from the purchase price.

Example 1:

Firearm: $1000 (seller gets $800, FFL gets $200)
DROS: $25
FFL Fee: $100
Total $1125
Total to FFL: $300

Example 2:

Firearm: $1090 (seller gets $800, FFL gets $290)
DROS: $25
FFL fee: $10
Total $1125
Total to FFL: $300

As you can see, one way is legal for a PPT, the other is not, but the money to the FFL is the same. It all depends on how you write it up. So, in the case of a consignment, the "fees" are not so black and white.

Does the buyer really care how it is written up? Most likely not, they just care what the total is.

kermit315
07-23-2009, 3:30 PM
problem is, we arent talking about a consignment, we are talking about a PPT. If I tell you the selling price of the gun was $50, you can collect the tax on the $50 and the $35 for the PPT, and thats it.

ke6guj
07-23-2009, 3:38 PM
problem is, we arent talking about a consignment, we are talking about a PPT.that might be my fault. We were talking about PPT, and that both parties had to both go to the FFL. I said at the same time, but kemasa mentioned that you could do a "delayed PPT" where the parties come in at different times. I wondered then, what then would be the difference between a delayed PPT and a cosignment, when the dealer can charge a cosignment fee/percentage, but still is considered a PPT by CADOJ.

If I tell you the selling price of the gun was $50, you can collect the tax on the $50 and the $35 for the PPT, and thats it.how does the FFL justify collecting tax on the sale of a private party firearm that he did not sell, and the seller did not make a business of selling firearms?

kermit315
07-23-2009, 3:42 PM
Its a BOE thing, Wes has talked about it before, as far as the BOE putting the tax collection on the FFL. It has been argued about before, and not all FFL's do it, but it is really the only way to get past the $35 max on a PPT, and it cant show up as a dealer charge.

FWIW, I dont agree that they should collect the tax, but Wes showed the BOE code that basically forces their hands as merchants.

Oh, and about the consignment/PPT thing: I will go back into my corner. lol

ke6guj
07-23-2009, 3:49 PM
Its a BOE thing, Wes has talked about it before, as far as the BOE putting the tax collection on the FFL. It has been argued about before, and not all FFL's do it, but it is really the only way to get past the $35 max on a PPT, and it cant show up as a dealer charge.

FWIW, I dont agree that they should collect the tax, but Wes showed the BOE code that basically forces their hands as merchants.
But IIRC, BOE does make a distiction between an FFL transfering a firearm for another merchart vs. transfering a firearm for a private party seller.

kermit315
07-23-2009, 4:01 PM
But IIRC, BOE does make a distiction between an FFL transfering a firearm for another merchart vs. transfering a firearm for a private party seller.

Honestly, I dont remember what the ins and outs were, just that it had been covered and I remember that a lot of people still werent happy with the result...lol, go figure.

kermit315
07-23-2009, 4:08 PM
I cant find the thread where Wes discussed it, but I did find one where jksupply talks about it.

http://www.calguns.net/calgunforum/showthread.php?t=157463


Quote:
Originally Posted by halifax View Post
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. 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.)


+1000000000 !! I hate to do it, but as a small business, I would CEASE to exist if I got hit for the tax liability of all of the out-of-state purchases that I process. I collect the tax, and it all goes to the state. There is no benefit for me to collect it. I have a copy of this posted in the shop for anyone to read.

ETA: I am misinterpreting this, the more I read it.

Read this link and look at Wes's and Halifax's posts.

http://www.calguns.net/calgunforum/showthread.php?t=192970

snypz
07-23-2009, 4:12 PM
this is all so silly.

Technically bottom line is that when i and the seller go to an FFL at the same time to make a deal. The only thing i have to worry about is $35 according to the law correct?

no tax collection
no other fees
no nonsense...........right?

kermit315
07-23-2009, 4:14 PM
this is all so silly.

Technically bottom line is that when i and the seller go to an FFL at the same time to make a deal. The only thing i have to worry about is $35 according to the law correct?

no tax collection
no other fees
no nonsense...........right?

As long as you have an approved lock, with the reciept showing purchase in the last 30 days, it would appear yes, by the letter of the law.

snypz
07-23-2009, 4:15 PM
As long as you have an approved lock, with the reciept showing purchase in the last 30 days, it would appear yes, by the letter of the law.

a lock? ****, what kind of lock a trigger lock?

how much are these so called locks?

kermit315
07-23-2009, 4:18 PM
believe it or not, CA has its own list of approved gun locks. Most common is the blue cable lock that you can get for about $10 bucks. Common theme is to buy it, never open it, use the reciept for the pickup, then return the lock.

tenpercentfirearms
07-23-2009, 11:14 PM
Sales tax only applies to retail sales. An out of state transfer from a dealer or retailer is a retail sale (according to the BOE). A PPT or transfer from an individual is an occasional sale and not subject to tax. That should also make the PPT fee not taxable as well. Transfer fees are taxable, if you choose to believe what the BOE says. I do.

I have no idea how consignments work.

kemasa
07-24-2009, 9:03 AM
The BOE says that if the FFL gets involved in the selling price and/or finding a buyer, than sales tax must be collected, even if it is from a private seller who does not have a business and that it is an occasional sale (for the seller).

See also:

CA Sales Tax Firearms Information 495.0843 & 495.0848, as well as 295.1675.600

It would be nice if the FFL fee was always treated the same, but it is not. Transfer fees are not taxable if the item is not taxable (per BOE), so for a true PPT the FFL fee is not taxable.

According to the BATF, the FFL must provide for safe storage, so a lock with a receipt does not count if the buyer provides it. If the seller includes it with the firearm, then it counts. I don't agree with this, but the written law is poorly written and states that the transferee is to be "provided" with the safe storage. It does not say who specifically has to provide it. A safe is mentioned, but the BATF says that is ok if the FFL sells it at the same time as the transfer. I don't think that meets with the intent, but ...

It is also the case that if you buy something from out of state that you, personally, owe the sales tax, but it is hard to track down, so they force the CA business (FFL) to collect it and it is a real problem since the seller might not want to tell the FFL what it was sold for.

botsdots
08-05-2009, 10:24 PM
believe it or not, CA has its own list of approved gun locks. Most common is the blue cable lock that you can get for about $10 bucks. Common theme is to buy it, never open it, use the reciept for the pickup, then return the lock.

Sorry for the tangent here.

I did a PPT at a shop in Long Beach area which would accept the yellow "save a child" (or something to that effect) locks as well. Found out my local PD has a barrel full of them in the lobby. Is this common?

kemasa
08-05-2009, 10:30 PM
Many police stations have the locks, but the problem is that if you bring it in, you need a receipt for the CA law and the Feds won't accept it for you to bring it in since they say that the FFL has to "provide" it. The FFL can get the locks and provide them though. The seller could also bring one in.

One issue is in knowing the brand of the lock to ensure that it is on the certified list of locks. I looked at one and could not find a name or model to match it up with the list.

botsdots
08-05-2009, 10:34 PM
Interesting. The guy doing the transfer made a photocopy of the lock where it had the save a child slogan stamped on it.

eltee
08-06-2009, 10:35 AM
On the taxing of out of state transfers, many buyers balk at paying tax to the Calif. FFL after shelling out their money to the out of state seller, and will refuse to use the Calif. dealer who charges tax since so many don't collect the "use" or "sales taxes. I guess there is always the chance that a tax man could visit an FFL who doesn't collect the tax, and then levy back taxes and penalites. :eek:

It would be nice if there could be a flowchart on taxing.

Somebody needs to get a definitive, legal answer on this that all Calif. FFL's can operate under so there is no inconsistency. Lose customers for charging taxes or risk fees and penalities from the BOE for not charging taxes? :confused: I can't see anyone calling up old customers to try and collect back taxes, but would the BOE simply take the info from the FFL's bound book and reach out to the customers?

On the locks, I've seen dealers simply mark on the yellow sheet (4473) in box 30c and in the "Dealer Information/Comments:" box on the DROS, "Approved lock provided." Is this all that needs to be done to meet the requirement? The dealer gives out a lock at the sale, or points out the lock the manufacturer provided (assuming it is a Calif. approved one), and that seems to take care of the lock issue. The locks the dealer gives out are those freebie ones from the police station.

kemasa
08-06-2009, 10:45 AM
If you check out the info on the BOE website, all the answers are there, but still some FFLs don't follow it. It has been posted here several times too.

CA Sales Tax Firearms Information 495.0843, 495.0848 & 295.1675.600

I have a printout to show people who question it, but that does not cause other FFLs to follow the law.

The BOE would just get the money from the FFL. Why should they bother going after the customers? The BOE does not have a right to the bound book information.

The answer is that if the firearm comes from a business, you need to collect sales tax. If it comes from a private party and is an occasional sale, then you don't, but you need to get a letter to document that. If it is a PPT and the FFL gets involved in finding a buyer and/or gets involved in the sales price, then tax needs to be charged.

As far as the Feds are concerned, any lock will do. For CA, it needs to be certified. This means that if the person has a safe, then the form will work for CA and any old lock will then work for the Feds. I am not sure if the Feds are really enforcing it though. They said that they were going to add it to the FAQ, but so far they have not. There are serious problems with the wording. It mentions that a safe is acceptable, but the BATF lawyer says that it would have to be provided at the time of transfer by the FFL.

halifax
08-06-2009, 11:15 AM
...
On the locks, I've seen dealers simply mark on the yellow sheet (4473) in box 30c and in the "Dealer Information/Comments:" box on the DROS, "Approved lock provided." Is this all that needs to be done to meet the requirement? The dealer gives out a lock at the sale, or points out the lock the manufacturer provided (assuming it is a Calif. approved one), and that seems to take care of the lock issue. The locks the dealer gives out are those freebie ones from the police station.

I, too, use line 30c to record the lock info for "Youth Handgun Safety Act" compliance. Just seemed like a good place to put it.

Rob454
08-06-2009, 4:35 PM
ive never had to pay sales tax on a PPT. We show up money gets transfered the buyer pays the 35$ fee and we get copies of the things and we go our own ways.

Consignments yeah im sure dealer gets his cut and charges tax cause he is actually doing the sale.

kemasa
08-06-2009, 7:44 PM
Have you ever had the FFL get involved in finding the buyer and/or dealing with the price? If not, then there should not be sales tax. It is also the case that the FFL is not aware of when sales tax is due in the case of a PPT. I would be willing to bet that many do not know that if they find the buyer or deal with the price that it changes things.