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Silverback
03-07-2005, 8:02 PM
How many of you have run into this and what can you tell me about the legality of it? Here's the situation:
A PPT from an individual out of state to in individual within the Socialist Republic of Cali, The handgun must be sent to a FFL to arrange the transfer. The gun store doing the transfer wants to charge for the transfer, DROS and "Sales tax"!

The last time I did a PPT this way there was no sales tax. How many of you have had to pay this tax?

Silverback
03-07-2005, 8:02 PM
How many of you have run into this and what can you tell me about the legality of it? Here's the situation:
A PPT from an individual out of state to in individual within the Socialist Republic of Cali, The handgun must be sent to a FFL to arrange the transfer. The gun store doing the transfer wants to charge for the transfer, DROS and "Sales tax"!

The last time I did a PPT this way there was no sales tax. How many of you have had to pay this tax?

Kruzr
03-07-2005, 9:16 PM
He is charging sales tax because he is selling you the gun from his inventory.
Since 2004, you cannot do a PPT with an out of state individual. The FFL will be the seller of record.

Richard
03-07-2005, 11:02 PM
I've been looking into this and it seems to be varying opinions out there from FFL's....some will charge sales tax and some won't....what you need to do is shop around and specifically ask if they are charging you sales tax for recieving a gun and DROSing it. I've found that pawn shops are easier to work with than gun stores....hope this helps.

bwiese
03-08-2005, 6:40 AM
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I've been looking into this and it seems to be varying opinions out there from FFL's </div></BLOCKQUOTE>

The FFL's opinion is irrelevant.... the people who actually count are the sales tax folks at Calif. State Board of Equalization.

I'd bet that any non-PPT transfer (that is, a gun enters inventory of FFL dealer, then he 'sells' it to you) is regarded as a regular sale and is thus taxable.

Doesn't matter if you, the buyer, paid the out of state seller directly, etc. That'd likely just be regarded as an artifice. The 'nexus' of the transaction is at the CA FFL dealer, since you can't legally get the gun any way else...

Given the amount of paperwork involved in a gun sale, it'd be easy for the state to audit gun shops. If sales tax collections were found to be deficient, I believe an 'estimated' price for the gun (perhaps MSRP, perhaps MSRP - 10% dicount as a 'prevailing price') would be used in dunning the non-sales-taxing FFL for back sales tax.

Any CA FFL who doesn't charge sales tax is stupid; he may not be 'bitten' now, but 5+ years down the line he could well be held accountable for a lot of accumulated back sales taxes.

(I have no idea if sales tax noncompliance would also throw his state gun dealer license into jeapordy but it's not unimaginable...)


Bill Wiese
San Jose

rkt88edmo
03-08-2005, 6:43 AM
From my tiny bit of experience on two out of state transfers, some collect it & some don't.

In older threads, which don't seem to be available anymore, there were reports of FFLs being forced to remit sales tax on transfers whether or not they collected it.

Silverback
03-08-2005, 7:23 AM
Another little tid-bit!

All stores that I have spoken with quote a flat price for an in state transfer but for an out of state transfer they add the sales tax.

rkt88edmo
03-08-2005, 8:17 AM
By in state transfer they probably mean Face to Face PPT.

The state has set the allowable fee for a face to face transfer @35$, which includes DROS. The FFL where I did my last FTF at felt that the state was adamant about the FFL not charging anything over that or adding on any other fees to recover costs.

bwiese
03-08-2005, 8:35 AM
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by ROKIT88:
By in-state transfer they probably mean Face to Face PPT.

...the allowable fee for a face to face transfer @35$, which includes DROS. The FFL where I did my last FTF at felt that the state was adamant about the FFL not charging anything over that or adding on any other fees to recover costs. </div></BLOCKQUOTE>

Correct. The 'spirit' of that law was to have a known, predictable reasonable (???) fee without any unknowns so folks would transfer guns legally. That is regarded as a transfer from party A to party B with FFL intermediating.

But when you buy a gun out of state and have it delivered to your FFL, that's not a transfer. It enters FFL inventory, etc. and you are 'buying' it from him.


Bill Wiese
San Jose

rkt88edmo
03-08-2005, 8:47 AM
Another bit of confusion comes from out of state, and in state, but distant transfers. If I ship a rifle from San Francisco to a buyer in Los Angeles, it still is in the FFLs inventory. So out of state doesn't seem like the best descriptor.

Silverback
03-08-2005, 4:41 PM
I just this evening I found two FFLs in Sacramento that said if they do not handle money for the transaction they do not charge tax. If I purchase the gun and pay the entire cost of the gun before it is sent to Cali then they will not charge tax. I will only pay for the processing in Cali.

I'm beginning to like these guys a lot!

bwiese
03-09-2005, 10:17 AM
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Dispatcher:
...found two FFLs in Sacramento... if they do not handle money for the transaction they do not charge tax. If I ... pay the entire cost of the gun before it is sent to Cali then they will not charge tax... </div></BLOCKQUOTE>

I wish them luck with Board of Equalization whenever they're audited. Easy to find all the out-of-state FFL transfers they've done and figure out sales tax owed by estimated values of guns.

And this is separate from your still owing the use tax (which you have to report on your 540 under oath) that Ted mentioned above - though it's the duty of a retailer to pay sales tax when required.

Bill Wiese
San Jose