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Nylo
06-09-2005, 6:54 PM
A local BA FFL dealer said that for out of state transfers have the seller send you the sales receipt NOT to your FFL dealer. This way you will not be charged tax and your FFL dealer is simply a transfer agent. If your FFL dealer sees the receipt, or handles the money, he will have to charge you tax.

Has anyone heard diffrent?

JA

Trader Jack
06-09-2005, 8:12 PM
The sales receipt has no bearing on the sales tax charge. The FFL Dealer doing the transfer can charge you a sales tax based on the average selling price in the given area.

The dealer is not obligated to charge the sales tax BUT YOU ARE OBLIGATED TO PAY IT either to the dealer or the Calif State Franchise Tax Board.

Nylo
06-10-2005, 11:33 AM
I was told if a product that is coming from out of state and the company does not have a physical presents in Kalifornia that there is no tax. Your thought?

Would it make any difference if the firearm is new or used?

Thanks for the help.

JA

imported_EOD Guy
06-10-2005, 1:01 PM
Originally posted by JakeAce:
I was told if a product that is coming from out of state and the company does not have a physical presents in Kalifornia that there is no tax. Your thought?

Would it make any difference if the firearm is new or used?

Thanks for the help.

JA

That's not quite true. In the case you described, the seller is not obligated to collect sales tax. You still owe the state a use tax which is paid at the same rate as the sales tax. There is a place on your state income tax return to report use tax due. I would guess that the state collects very little money that way.

bwiese
06-10-2005, 3:09 PM
We've been over this thread's subject quite a few times.

While user is responsible for 'use tax' for out of state purchases upon which tax should be collected, the FFL dealer should really collect tax on non-F2F PPT purchases.

Since the gun can't be truly 'sold' to the end user in CA without participation from CA FFL dealer, and the gun goes into his inventory, the fact the CA guy paid the out of state guy directly is a mere artifice. The CA FFL would likely be considered by Board of Equalization as a 'nexus' of the transaction.

While the dollar volume and unit volume of these out of state transfers is prob only a small portion of most dealers' business, it will come up on the radar someday during an audit. There's a real danger that lotsa back sales taxes could be assessed, along with penalties and interest, on "estimated fair market value" of the guns if good sales records aren't around.

This is kinda a 'self-indicting' violation too, since CA gun sales are about the most documented transactions on the planet, next to real estate.
It's real easy for a tax auditor to know these occured and find out whether sales tax was collected.

If I were an FFL, I would charge sales tax. Too much risk.


Bill Wiese
San Jose