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Standard
10-25-2009, 11:54 AM
I bought a handgun from a guy out of state. He shipped it to my FFL who has great prices, so I always use him.
Being that it was a PPT, I thought it would be the normal $35 charge (it's not from a dealer). But since he's out of state, the FFL said he can't do it as a PPT, and that now I have to pay the $50 charge (instead of $35) and an additional nearly $50 in tax...does this sound right? Why am I paying tax on an out of state purchase?
I'm not going to say the FFLs name, because he is a great guy to deal with and I don't want it to sound like I'm bashing him. I just want to make sure this is right. I was expecting $35 in fees and I'm going to end up paying $100.

ivanimal
10-25-2009, 11:57 AM
100 is fair. PPT's @ 35 only count for face to face transfers. He can charge what he wants to receive a gun from out of state.

Mike's Custom
10-25-2009, 11:59 AM
No such thing as a PPT from out side the state. Only PPT can happen between CA residents. All others are dealer sales. Dealer sales are taxable.

Dr Rockso
10-25-2009, 12:00 PM
The tax thing is an iffy situation. Basically anything that you buy out of state, YOU are responsible for paying the tax on (use tax). Now almost nobody actually knows or cares about the use tax, but the state has told some FFLs that they are responsible for collecting that tax on out of state transfers. Should they have to do it? I don't think so, but nobody is going to fight the state over it.

k1dude
10-25-2009, 12:08 PM
I would be upset about the tax. Your FFL isn't a reseller marking up inventory. He's performing a transfer pure and simple. If he's going to charge you tax at all, it should only be on his $35 fee since it's a service he's providing. But even that can be argued. There are plenty of other FFL's that won't ding you like that.

forgiven
10-25-2009, 3:32 PM
It is amazing how much it cost to have a FFL receive a gun from out of state here in CA. In AZ my dealers charge $25.

Josh3239
10-25-2009, 3:59 PM
I have noticed that. California dealers get away with charging atleast $75 OTD and out of state dealers charge much cheaper. I would guess that between all the regulations here that make getting somethings harder and the dealers can hide behind the "extra paperwork and time" thing they can get away with charging that much.

cgseanp1
10-25-2009, 4:09 PM
I have noticed that. California dealers get away with charging atleast $75 OTD and out of state dealers charge much cheaper. I would guess that between all the regulations here that make getting somethings harder and the dealers can hide behind the "extra paperwork and time" thing they can get away with charging that much.

There are plenty of dealers that don't charge that much, around $35 or so.. But when you ad in all the fees, it gets crazy.

CaliforniaLiberal
10-25-2009, 6:11 PM
He's better than most FFLs. Many will charge $100 or $125 just for the transfer fee - not counting paperwork or possibly taxes.

Standard
10-25-2009, 8:18 PM
He's better than most FFLs. Many will charge $100 or $125 just for the transfer fee - not counting paperwork or possibly taxes.

I understand and I agree 100% - that's why I use him!
I was just curious about this particular transaction and if it was normal.

pingpong
10-25-2009, 8:20 PM
$100 is pretty standard (though a tad high compared to what I'm used to). I know of at least 3 places that'll do it for $65 around here...

Quiet
10-25-2009, 8:34 PM
AFAIK...
Currently, CA BOE is forcing FFL dealers to collect a "use tax" on out-of-state transfers. Because the item you are transfering into CA, is going to be "used" in CA.
If the FFL dealer does not collect the tax, CA BOE expects you to pay it when you do your taxes at the end of the year.

halifax
10-25-2009, 8:40 PM
AFAIK...
Currently, CA DOJ/tax board is forcing FFL dealers to collect a "use tax" on out-of-state transfers. Because the item you are transfering into CA, is going to be "used" in CA.
If the FFL dealer does not collect the tax, CA tax board expects you to pay it when you do your taxes at the end of the year.

Not quite. The BOE expects the dealer to pay it:

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. 992).

(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.)

Quiet
10-25-2009, 9:11 PM
I knew it was some CA gov agency. Thanks for the correction.

Mike's Custom
10-26-2009, 8:54 AM
I have been told that as long as it is a Dealer Sale on the DROS it is taxable. There are no "out of state transfers" in CA since transfers can only take place between CA residents. That makes it pretty simple to me.

One reason "transfers" are cheaper outside CA is they do not have to do anywhere near the paperwork and record keeping that we have to do. We also have to hold the firearm for days and the liablilty in CA is much higher then most other states. We have to deal with both the FEDs and the DOJ while other states just deal with the FEDs and each one has different things we MUST do. If you look at most business that have hourly rates you will see most of them are atleast $75 or more per hour. And in Ca it takes a hour or more for the process. It actually takes a little more time to do DTs then just ordering a firearm from a wholesaler. FFL dealers should be able to make a decent hourly wage on PPTs but the state limits us to $10 and htat isn't even minimum wage for the time spent. Just with all the copies we have to make and provide both parties it costs us a few bucks.

k1dude
10-26-2009, 11:07 AM
Ah. I get it. Since it's coming from out of state, the dealer basically had to put it in his inventory and do a resale. So he needs to pay tax. Got it.

I withdraw my previous criticism.

Standard
10-26-2009, 12:06 PM
Ah. I get it. Since it's coming from out of state, the dealer basically had to put it in his inventory and do a resale. So he needs to pay tax. Got it.

I withdraw my previous criticism.

That's what it sounds like to me too.
Thanks a lot guys. I'll keep this in mind next time I buy a firearm from out of state. :)

Mike's Custom
10-27-2009, 5:26 PM
Ah. I get it. Since it's coming from out of state, the dealer basically had to put it in his inventory and do a resale. So he needs to pay tax. Got it.

I withdraw my previous criticism.

Exactly.

sv_1
10-27-2009, 6:37 PM
I have been told that as long as it is a Dealer Sale on the DROS it is taxable. There are no "out of state transfers" in CA since transfers can only take place between CA residents. That makes it pretty simple to me.

One reason "transfers" are cheaper outside CA is they do not have to do anywhere near the paperwork and record keeping that we have to do. We also have to hold the firearm for days and the liablilty in CA is much higher then most other states. We have to deal with both the FEDs and the DOJ while other states just deal with the FEDs and each one has different things we MUST do. If you look at most business that have hourly rates you will see most of them are atleast $75 or more per hour. And in Ca it takes a hour or more for the process. It actually takes a little more time to do DTs then just ordering a firearm from a wholesaler. FFL dealers should be able to make a decent hourly wage on PPTs but the state limits us to $10 and htat isn't even minimum wage for the time spent. Just with all the copies we have to make and provide both parties it costs us a few bucks.


I've PPT'd at several FFL's that got me in and out in less than 10 minutes including BSing. Is there more behind the scenes stuff after I leave?

tenpercentfirearms
10-28-2009, 6:37 AM
If it is a sale from a private party, it is an occasional sale and not subject to sales tax. Only when you buy the firearm from another retailer out of state am I considered the retailer in state and I must pay the sales tax (I don't pay use tax for you, I pay sales tax).

See post 37 and 38 in this thread.

http://www.calguns.net/calgunforum/showthread.php?t=218629&highlight=retail+boe&page=2

Mike's Custom
10-28-2009, 1:49 PM
I've PPT'd at several FFL's that got me in and out in less than 10 minutes including BSing. Is there more behind the scenes stuff after I leave?

You can't do a PPT in 10 mins. No way. The dealer has to spend time logging in and out and in a out of state purchase there are licenses to be copied and exchanged. You might gtea 4473 filled out by the customer in 10 minutes but that is rare. It takes about the same time for the dealer to fill out his portion of the 4473. Making 2 copies of the DROS takes a couple minutes and PPTs are even longer. Long guns are the fasted to do beause there is no demonstrations or gun info to do but not by a lot.

In a study done in 2004 by NSSF ( if remember correctly) that firearms sell for a average or 20% over cost. With all the federal states paperwork and cost of copies and supplies in processing a firearm they said a FFL dealer in Ca loses just over $14 per sale based on a average rate of $25 per hour wage. Considering that $25 sounds pretty good the dealer is still losing money based on cost expenditures and time. Since most of us have to supply our own insurance also based on that $25 per hour rate it makes you wonder why we do it. I will see if I can find that data but is was a while ago and a couple computers ago too.

Barney Gumble
10-28-2009, 1:58 PM
If it is a sale from a private party, it is an occasional sale and not subject to sales tax. Only when you buy the firearm from another retailer out of state am I considered the retailer in state and I must pay the sales tax (I don't pay use tax for you, I pay sales tax).

See post 37 and 38 in this thread.

http://www.calguns.net/calgunforum/showthread.php?t=218629&highlight=retail+boe&page=2

+1

Your FFL should not be charging tax on the transfer of a firearm from another individual (non-retailer).

Standard
10-28-2009, 3:23 PM
He said the program wouldn't let him put it in as a PPT since it was from out of state, and therefore he was liable for the tax on it, which is why he was charging me tax for the purchase price.
I guess there's no way around it?

halifax
10-28-2009, 3:31 PM
He said the program wouldn't let him put it in as a PPT since it was from out of state, and therefore he was liable for the tax on it, which is why he was charging me tax for the purchase price.
I guess there's no way around it?

You are right. There is no way around it if he's not going to do it with out charging tax.

But like Wes pointed out:

See post 37 and 38 in this thread.

http://www.calguns.net/calgunforum/s...ail+boe&page=2

It's his business and if that is the way he wants to interpret things that's up to him.

Barney Gumble
10-28-2009, 3:53 PM
He said the program wouldn't let him put it in as a PPT since it was from out of state, and therefore he was liable for the tax on it, which is why he was charging me tax for the purchase price.
I guess there's no way around it?

Well he's got your pistol there so getting it to a different FFL just to save the tax $$ would be a pain in the butt.

You could print out the text from the BOE that Wes gave in his other thread and see if that convinces him but if not I wouldn't push it.

jaymz
10-28-2009, 4:31 PM
How does he know how much you paid for it?
Me: You are going to charge me tax on this?
FFL: State says I have to. What did you pay for it?
Me: $1.00. Pretty smokin' deal, huh?

halifax
10-28-2009, 4:49 PM
How does he know how much you paid for it?
Me: You are going to charge me tax on this?
FFL: State says I have to. What did you pay for it?
Me: $1.00. Pretty smokin' deal, huh?

That always works at the DMV :D

Standard
10-28-2009, 4:55 PM
Haha, good idea. I already told him though.
No biggie I guess. Extra $45 is all. Sucks, but not the end of the world.

barrykay
10-28-2009, 10:04 PM
How does he know how much you paid for it?
Me: You are going to charge me tax on this?
FFL: State says I have to. What did you pay for it?
Me: $1.00. Pretty smokin' deal, huh?

Wrong. The processing FFL can determine a "fair" resale value in three ways.
(1) Base it on the same already in there store
(2) Get an average sell on gun broker for like kind.
(3) Use "Blue Book of Gun Values" to determiner a fair value.

These are approved by the B.O.E. To add to that, if the B.O.E. audits you and finds a number collected taxes based on a reductions of low sale amount, they in fact will charge the dealer for the balance. :cool:

halifax
10-31-2009, 10:03 AM
Wrong. The processing FFL can determine a "fair" resale value in three ways.
(1) Base it on the same already in there store
(2) Get an average sell on gun broker for like kind.
(3) Use "Blue Book of Gun Values" to determiner a fair value.

These are approved by the B.O.E. To add to that, if the B.O.E. audits you and finds a number collected taxes based on a reductions of low sale amount, they in fact will charge the dealer for the balance. :cool:

And if you are really annoying, then MSRP. :chris:

Mike's Custom
10-31-2009, 10:54 AM
+1

Your FFL should not be charging tax on the transfer of a firearm from another individual (non-retailer).


There are NO out of state PPTs. ONLY PPTs are not taxable. CA treats firearms like vehicles, you can buy it out of state but when it comes into CA and is DROS'd as a Daler Sale it is a SALE and taxable. As a FFL dealer I will not run any risk for you so you can save the tax. As much as I would LOVE to stick it to Arnie and CA and not collect tax, it is not worth it to me to save you a few bucks. If I am audited and I haven't collected sales tax from you I doubt very seriously you would step up and pay the tax and penalty for me at a future date. Cars and guns are not like buying other goods on the internet.

I am sorry if this angers you internet firearms buyers but the bottom line is you buy a couple guns a year off the internet while I transfer many. For you it means maybe $100 more or less but to me it means much much more including my business.

Mike's Custom
10-31-2009, 11:03 AM
Wrong. The processing FFL can determine a "fair" resale value in three ways.
(1) Base it on the same already in there store
(2) Get an average sell on gun broker for like kind.
(3) Use "Blue Book of Gun Values" to determiner a fair value.

These are approved by the B.O.E. To add to that, if the B.O.E. audits you and finds a number collected taxes based on a reductions of low sale amount, they in fact will charge the dealer for the balance. :cool:

Firearms, just like vehicles, must have a fair reported value if there is no receipt. The DMV will investigate (not with this economy) if the reported sale price is deemed to low. If you try to report the selling price for a vehicle that is actually worth $25K at $1500 then it will send up red flags at the DMV. If the DMV, and it has, looks at your new vehicle and decides the sale price was under-reported they will access a value and tax you at that rate. Values must be reasonable if not accompanied by a receipt.

BLC
10-31-2009, 11:25 AM
It has never taken my FFL anywhere near an hour to do the paperwork.

Mike's Custom
10-31-2009, 6:41 PM
It has never taken my FFL anywhere near an hour to do the paperwork.


You haven't seem everything a FFL has to do. The DROS is only a part of the time it takes to process a firearm in and out of inventory.