California Sales Tax on Gun Purchases Question.

[tenpercentfirearms]

I figure someone here might know this. I have my Board of Equalization Seller's Permit. If I sell any firearms to dealers in state, I am going to have to get a California Resale Certificate from that seller or I will have to charge them sales tax correct?

The reason I ask is if I sell someone a gun in person I collect tax, that is simple. What if I do a transfer fee for someone who buys something on an auction or from a private party out of state? Technically I am just doing a "service" and that isn't subject to tax correct?

I am currently doing a Kimber Group Buy and if I send a gun to another FFL in state, someone needs to collect sales tax. Unless the transfer FFL collects it, I need to collect it, correct? If I don't collect it then the transfer FFL needs to send me a California Resale Certificate and then they will collect it.

I would think for the purposes of my group buy it would be best for me to collect the sales tax and then the transfer dealer won't have as much claim for exorbitant fees because they are collecting the sales tax and technically they are selling the gun. Since all of the group buy funds go to me, I am the seller, I collect tax, the transfer dealer collects no tax.

Anything sent out of state collects no tax.

Thanks for your help.

[C.G.]

I figure someone here might know this. I have my Board of Equalization Seller's Permit. If I sell any firearms to dealers in state, I am going to have to get a California Resale Certificate from that seller or I will have to charge them sales tax correct?

The reason I ask is if I sell someone a gun in person I collect tax, that is simple. What if I do a transfer fee for someone who buys something on an auction or from a private party out of state? Technically I am just doing a "service" and that isn't subject to tax correct?

I am currently doing a Kimber Group Buy and if I send a gun to another FFL in state, someone needs to collect sales tax. Unless the transfer FFL collects it, I need to collect it, correct? If I don't collect it then the transfer FFL needs to send me a California Resale Certificate and then they will collect it.

I would think for the purposes of my group buy it would be best for me to collect the sales tax and then the transfer dealer won't have as much claim for exorbitant fees because they are collecting the sales tax and technically they are selling the gun. Since all of the group buy funds go to me, I am the seller, I collect tax, the transfer dealer collects no tax.

Anything sent out of state collects no tax.

Thanks for your help.

Yes, they have to supply you with their re-sale number; there is a form for that you can pick up in places like Staples.
If you ship, and collect tax you are supposed to collect tax for the area you shipped to, which can be a bookkeeping nightmare. If you collect the wrong tax, you are still liable.
With arms dealers I heard that some collect the sales tax on anything that enters their inventory others don't. Not sure what is legal or not, I have a re-sale license, but I am not in that business; so you might want to do some research on that, because if sales tax is not collected than somebody is still liable for it, either you or the other dealer.

[tenpercentfirearms]

I found the resale certificate online at http://www.boe.ca.gov/pdf/boe230.pdf . I forgot about the special taxes here and there. Hmmm, this might become a pain in the rear. Anyone else know anything else?

[halifax]

Seems to me if I order anything online from a dealer within CA, they will charge me sales tax. The same should apply in this situation. You get the guns from Kimber and charge CA sales tax to your customers within CA. You would not be obliged to collect tax on out-of-state sales. This way will make it easier on the receiving FFL also.

Damn, I wish I had the spare cash for a Target II in 10 mm.

[tenpercentfirearms]

I know this is wrong, but I take credit cards!!!!!! :D

[Turbinator]

Anything sent out of state collects no tax.

Not exactly - some states have reciprocal tax laws with CA, meaning that both states agree to charge sales tax, or at least a use tax, for each other's retail sales.

You have to check if your recipient lives in a state that has a reciprocal tax agreement with CA.

Turby

[C.G.]

Not exactly - some states have reciprocal tax laws with CA, meaning that both states agree to charge sales tax, or at least a use tax, for each other's retail sales.

You have to check if your recipient lives in a state that has a reciprocal tax agreement with CA.

Turby
Turby is dead on which makes your bookkeeping that more difficult, May I a suggest Quickbooks Pro as your bookkeeping program?!

[tenpercentfirearms]

I am already using Quickbooks Pro and boy is it slow learning. Everyday I learn something new, but it takes about an hour to get it all figured out. I need to get a good books person who can get me squared away. My partner already has one for his recycling business, I just need to meet with her.

Here is what I just sent to the BOE

I recently started a firearms business and have several tax questions.

1. If a person in the State of California orders a firearm from me, do I charge them sales tax even if I am not the dealer that delivers the firearm? For example, I order a pistol for you, but you live in Sacramento, I would have to send it to a local Sacramento dealer. The local Sacramento dealer will hold onto the firearm while he/she processes your ten day waiting period/background check. That dealer can charge you a fee in addition to the state mandated $25 DROS fee. Should I collect the sales tax since the customer actually bought the firearm from me?

2. If I process a firearm transaction where a individual in my area pays another dealer for a firearm, but I handle the 10 day wait/background check and chage the individual the $25 DROS fee and possibly a $30 fee I charge, what is subject to sales tax? I know the DROS fee is not subject to sales tax. What about my $30 fee to conduct the transfer? What about the cost of the firearm? If the firearm comes from in state and the purchaser already paid tax to the orginial seller, this wouldn't make any sense and would be double taxation.

What if the firearm comes from out of state and the purchaser already paid the person shipping the firearm to me? I am simply a transfer dealer charging the person a $25 DROS fee imposed by the state and $30 to do the transfer. I did not sell any tangible personal property. Do I still tax the cost of the firearm? Do I tax my $30 service charge for conducting the paperwork?

Any help you can give me answering these questions and the applicable sections where I can find the laws pertaining to these questions would be very appreciated. I would really like to make sure to follow all rules and regulations of the state. Thank you.

[donger]

I've emailed you multiple times regarding the THR Kimber group buy but you haven't responded. Are you still taking orders?

Thanks,
donger