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Blackhawk556
08-11-2010, 11:33 PM
I'm thinking of buying a gun from buds but i'm wondering if they charge taxes to use CA residents?

Also, when my local gun shop receives the firearm will they charge me taxes?? I thought i read here once that some FFLs charge taxes for receiving the item

I hope this is the total and i don't have to pay anything else. If I don't have to pay anything else I think i'm getting a great deal (well compared to my local gun shop "the range" in fresno $810 :D)


$541 for gun
$ 50 for FFL
$ 25 for DROS (or is it $35, don't some ffls charge $35)
----------------
$616 Total

Colt-45
08-12-2010, 12:33 AM
What FFL do you plan on choosing? ask them if they charge taxes.

THE RANGE in Fresno is WAAAY overpriced, it's ridiculous.
$650 for a XD45 before dros, $650 aswell for a Glock19 :wacko:

$30 for a box of cheap 45 target rounds.

btw, which gun is it?

Blackhawk556
08-12-2010, 1:09 AM
What FFL do you plan on choosing? ask them if they charge taxes.

THE RANGE in Fresno is WAAAY overpriced, it's ridiculous.
$650 for a XD45 before dros, $650 aswell for a Glock19 :wacko:

$30 for a box of cheap 45 target rounds.

btw, which gun is it?

mp9

i'm thinking of either going through breco in clovis or pete's sport shop in madera

pete's had a xd45 for 525 last time i check in case you interested

mcholak
08-12-2010, 7:09 AM
I don't remember Bud's charging me sales tax. You are supposed to report a "use tax" when you file your taxes for things like this that you buy out of state and don't pay tax on(ie-the internet). That said, you could easily not report it and probably get away with it but that's your call to make.

Capt_Communist
08-12-2010, 7:43 AM
The receiving FFL is supposed to charge you a "use tax" or you are supposed to declare it when you file.

Realistically it's a crap shoot... I've had FFLs charge me and some not, and what you do after is between you and H&R Block
(disclaimer: if they don't charge me I always report it on my taxes.... good now the little black helicopter won't come visit)


Just call the FFL and see what their policy is

glockman19
08-12-2010, 8:08 AM
Buds does not charge sales tax.

I do my DROS through Gunrunners in Duarte.

halifax
08-12-2010, 8:15 AM
This is what a CA firearms retailer should consider when deciding whether to charge sales tax or not.

Sales and Use Tax Annotation 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.)

bruss01
08-12-2010, 9:43 AM
Bud's is not an agent of the state of CA and is not responsible for collecting CA state taxes on any items they sell.

The FFL in CA who performs the paperwork for your purchase is not selling you anything... the sale was between you and Buds, not you and the FFL. I don't believe he can charge tax on the DROS fee.

Simply put, tax on out of state purchases is a matter between the purchaser and the state of CA. There is no agent designated for collecting these taxes. You will notice a section on your annual state income tax form inquiring about such purchases. Some people have a bad memory when it comes tax time. That is between them and the state of CA. The franchise tax board has tried to muddy the waters regarding this issue and has given the willies to a few FFL's who will try to make sure that the purchaser pays their sales tax on out of state purchases rather than let the purchaser handle that as allowed for on the annual income tax form. These FFL's are not legally obligated to do this, but many of them continue to do it anyway.

paul0660
08-12-2010, 9:58 AM
These FFL's are not legally obligated to do this,

Actually, unless the out of state vendor is a registered California retailer, the FFL IS required to collect the tax........that is what Halifax's post says.

Blackhawk556
08-12-2010, 12:10 PM
ok so i called three FFLs around here and I got three different answers

1. "As long as the business shipping the firearm doesn't include an invoice in the box, I will not charge you taxes. If they do include an invoice then I have to charge you"

2. "the california board of equalization<-?(tax people) require that I charge you tax for out of state purchase"

3. "i will charge you $50 for FFL and $25 for DROS NO TAXES"

halifax
08-12-2010, 12:30 PM
ok so i called three FFLs around here and I got three different answers

1. "As long as the business shipping the firearm doesn't include an invoice in the box, I will not charge you taxes. If they do include an invoice then I have to charge you"

2. "the california board of equalization<-?(tax people) require that I charge you tax for out of state purchase"

3. "i will charge you $50 for FFL and $25 for DROS NO TAXES"

Sounds about right.

Davidoff
08-12-2010, 12:33 PM
Number 2 is the one who is correct according to the tax code. Number 1 is saying that if there is no invoice included then he doesn't have to report it as a sale, he could call it a gift and not charge tax. Number 3 will have an interesting time with the CBOE eventually.

Even if you don't pay sales tax at the FFL you are supposed to pay use tax when you file your state tax return.

Davidoff
08-12-2010, 12:38 PM
This is one of those things that really ticks me off.

...

Any FFL who says he needs to charge sales tax on the value of gun you purchased from someone else is either a liar or a fool. They do not deserve your business.

However, recently the State Board of Equalization did crack down on FFLs telling them they need to charge tax on the products and services they do provide. I and most FFLs I know have interpreted that to mean they need to charge tax on whatever amount they charge for receiving the item in the mail and procesing the DROS. Most have simply incorportated that into their flat rate price, and added the statement "fees and taxes included" to their pricelists.

So #3 is almost correct. It is also $15 more than my FFL charges and his price includes the sales tax..

Did you read post #7 above? Firearms retailers are required to pay sales tax on the full retail value of the firearm in addition to taxing the service fee. Not that I agree with this bull, but that is what is being enforced against dealers now.

bruss01
08-12-2010, 12:42 PM
Actually, unless the out of state vendor is a registered California retailer, the FFL IS required to collect the tax........that is what Halifax's post says.

I think you are mistaking an opinion cited in a letter sent by BOE with the actual LAW. IANAL but I have seen parties skew an opinion to their benefit. My opinion is that they do not have the legal authority to compel this, and so they are trying to stir up FUD and rake in some money that way. My belief is that the BOE letter, in the passage cited, is in error. It is not holy writ. It is a scare tactic and to a certain extent it is working on some folks who scare easy.

tacticalcity
08-12-2010, 12:42 PM
It was posted after I started writing. This should be challenged in court. Having a seperate sales tax law for firearms vs. other goods can't be legal.

Davidoff
08-12-2010, 12:54 PM
I don't like it either.

Here's another discussion on the subject in the FFL forums:

http://www.calguns.net/calgunforum/showthread.php?t=246221


I think you are mistaking an opinion cited in a letter sent by BOE with the actual LAW. IANAL but I have seen parties skew an opinion to their benefit. My opinion is that they do not have the legal authority to compel this, and so they are trying to stir up FUD and rake in some money that way. My belief is that the BOE letter, in the passage cited, is in error. It is not holy writ. It is a scare tactic and to a certain extent it is working on some folks who scare easy.

If you think you don't have to pay the BOE what they say you have to pay, you're in for a very expensive fight. It doesn't make financial sense to fight this, somebody other than the business owner is going to have to pay the legal fees

stormy_clothing
08-12-2010, 3:37 PM
call your local dealer tell them the price - ofter with tax they can match it with transfer in costs

bruss01
08-12-2010, 3:45 PM
I don't like it either.

Here's another discussion on the subject in the FFL forums:

http://www.calguns.net/calgunforum/showthread.php?t=246221




If you think you don't have to pay the BOE what they say you have to pay, you're in for a very expensive fight. It doesn't make financial sense to fight this, somebody other than the business owner is going to have to pay the legal fees

There are a lot of problems with this, for instance, how is the FFL going to know HOW MUCH sales tax to collect? You didn't pay HIM for the gun, did you? So as far as the FFL is concerned it could be a million dollars, or one dollar, or a gift - he was not privy to that transaction and wouldn't know.

And yes, I'm smarter than to argue with BOE. They are wrong, plain and simple, but you will never get them to admit it without a lengthy court process. If you start that argument with them, it's likely to get expensive. That's why I make a point of never getting into an argument with them. Even when they are wrong, as I firmly believe they are in this case.

BOF had a couple of field agents holding a "symposium" or "conference" the other day. They were told just the day before that they would be doing this talk. One of the themes of their discussion was on how bullet-buttons were illegal, that people who had them possessed assault weapons, and on and on. Well, Jim Howdy! A guy in a suit with a government job SAID SO and so now we're all criminals, right? RIGHT?! A veritable fountain of FUD. Just because someone manages to score a "government job" and learned how to use the agency stationery and the fancy laser printer, does not make them an authority even if by rights, they ought to be. People who are long-time members of this board have seen a virtual torrent of misinformation spewed forth by government representatives over the years. It does not surprise me one bit to see misinformation spread by a government lackey held up as sacred scripture, but I would think most members of this board would look at such assertions with a jaundiced eye and reach for the box of Morton salt with which to take such "counsel".

And for the record I did not say the purchaser was not obligated to pay state tax. I said that the FFL was not obligated to be the tax collector on purchases between the buyer and the third party seller. That's an important distinction.

bruss01
08-12-2010, 4:17 PM
BOE is likely confused about how firearms purchases are structured. They are likely thinking, you walk into a gun store, ask for something the FFL/store owner doesn't have, so the retailer gets on gunbroker and finds one, and tells you "Ok, I can get you *that one in Ohio* for $550", so you give him $550 to obtain this gun from a third party in Ohio... in such a case, the BOE is essentially correct, the transaction took place in CA, you handed money to a CA retailer, and even though it involved a third party out of state, your transaction was with the CA retailer, thus, that retailer has to collect tax.

The scenario that BOE is likely NOT considering is where your transaction is entirely with a third party outside of CA. As in, YOU spot a gun on gunbroker.com, you bid, you win, you send the guy in Ohio a money order. From the moment that guy in Ohio gets your money, that Ohio gun is now yours. The guy in Ohio, in compliance with federal law, ships YOUR gun to a FFL in your state of residence. NO SALE takes place involving the CA FFL. He merely processes the required-by-law paperwork to release to you a firearm that you already legally own. At the FFL where you do your dross - THIS IS IMPORTANT - there is NO change of ownership taking place. There is a change of physical possession ONLY. The FFL is no more a party to your purchase than would the UPS or FED EX delivery driver be on a mail-order purchase you had delivered to your home. Are we going to start having UPS drivers collecting tax on everything bought off of Ebay?

Federal and state gun laws are so convoluted that even those who work with them every day and those who are charged with enforcing them are often tragically, grievously WRONG. How many of us are convinced that a pencil-pushing number-cruncher who probably never bought a gun in their life gets it right 100% of the time? Most of us have some serious doubts about that.

Davidoff
08-12-2010, 4:23 PM
So are you saying that if you had a FFL01 you would not follow the BOE's opinion?

We all agree that it is wrong. Heck, even the use tax is wrong. The issue is that we can't complain about gun stores charging sales tax when they don't really have a viable alternative.

bruss01
08-12-2010, 4:32 PM
So are you saying that if you had a FFL01 you would not follow the BOE's opinion?

We all agree that it is wrong. Heck, even the use tax is wrong. The issue is that we can't complain about gun stores charging sales tax when they don't really have a viable alternative.

A better way to phrase that would be "Don't complain about your FFL playing tax-collector on items he never sold you, because you have an alternative." Not everyone sees it in the narrow terms you defined.

Davidoff
08-12-2010, 4:34 PM
Basically, I'm saying that we can't blame the gun store.

halifax
08-12-2010, 4:41 PM
A better way to phrase that would be "Don't complain about your FFL playing tax-collector on items he never sold you, because you have an alternative." Not everyone sees it in the narrow terms you defined.

No, not everyone but at least one man whose opinion I trust does:

http://www.calguns.net/calgunforum/showpost.php?p=340881&postcount=7

Any FFL not charging the sales tax and remitting it to state is stupid.

Since the 'nexus' of the transaction is in CA and transaction is required to go thru dealer, I can't see the dealer not being the point of sale. BoE information give out otherwise otherwise is kinda like DoJ information - what a desk clerk gives out ain't always right. Unless you had an official 'ruling letter' stating otherwise, don't. Tax law is even murkier than gun law.

Gun transactions in CA are among the most well-documented around. If FFL were audited by CA tax people, there's be a slough of guns sold w/o sales tax collected. Back taxes + penalties could be assessed on their estimate of gun's value (MSRP, not actual sales price).

bruss01
08-12-2010, 4:48 PM
Basically, I'm saying that we can't blame the gun store.

I'm saying you can choose where to do legally required paperwork on guns you already own. You don't like how one person does business, find someone else who sees things more your way.

Davidoff
08-12-2010, 5:10 PM
I'm saying you can choose where to do legally required paperwork on guns you already own. You don't like how one person does business, find someone else who sees things more your way.

Agreed.

Batman
08-12-2010, 11:09 PM
OK, I'll ask about a situation...

I buy a gun from a private party in California, but they're not within driving distance. So they agree to ship the gun to my FFL. Now, this is a private sale, not a retail sale, but he's still going to ship to my FFL. Is the FFL required to collect sales tax on this?

maxima
08-12-2010, 11:18 PM
By no means thread hijack. Just curious that if my mum in CA, or my dad in NV paid the online dealer for me as a gift and the online dealer shipped the gun to my local FFL (Of course, I will do DROS at FFL). Do I suppose to pay "tax" on it, even I did not pay for the gun myself?

Davidoff
08-13-2010, 12:14 AM
It seems that the answer to your questions is that it depends on the dealer. Call the dealer and ask. If you don't like the answer, call a different dealer.

halifax
08-13-2010, 6:09 AM
OK, I'll ask about a situation...

I buy a gun from a private party in California, but they're not within driving distance. So they agree to ship the gun to my FFL. Now, this is a private sale, not a retail sale, but he's still going to ship to my FFL. Is the FFL required to collect sales tax on this?

No. The BOE sees this as an occasional sale between private parties (not a retail sale) and it is not subject to sales or use tax.

halifax
08-13-2010, 7:26 AM
By no means thread hijack. Just curious that if my mum in CA, or my dad in NV paid the online dealer for me as a gift and the online dealer shipped the gun to my local FFL (Of course, I will do DROS at FFL). Do I suppose to pay "tax" on it, even I did not pay for the gun myself?

Your mother in CA will have paid tax to the CA retailer; so, no tax for you.

If your father in NV purchases the firearm and then ships it to your dealer, that is an occasional sale and no tax. However, if your father has it drop shipped from the NV retailer to your dealer, that may be considered a retail sale of tangible goods for use in CA. Gray area.

maxima
08-13-2010, 10:54 AM
Thank you for the explanation.
Your mother in CA will have paid tax to the CA retailer; so, no tax for you.

The online dealer is not in CA, my mum pay him through his website. According to your explanation for "dad" case, it might also be a grey area, right? In both cases, I can just DROS it without pay "tax" since I did not pay for the firearm.

bruss01
08-13-2010, 8:05 PM
No, not everyone but at least one man whose opinion I trust does:

http://www.calguns.net/calgunforum/showpost.php?p=340881&postcount=7

Dare either of you to show me one CA FLL who has been prosecuted for failing to collect tax on an out of state transaction without other complicating circumstances. Just one.

halifax
08-14-2010, 1:42 AM
Dare either of you to show me one CA FLL who has been prosecuted for failing to collect tax on an out of state transaction without other complicating circumstances. Just one.

It's not a criminal offense so I doubt anyone has ever been "prosecuted".

You run your gun dealership the way you want and leave others to do the same.

faterikcartman
08-14-2010, 10:36 PM
There are a lot of problems with this, for instance, how is the FFL going to know HOW MUCH sales tax to collect? You didn't pay HIM for the gun, did you? So as far as the FFL is concerned it could be a million dollars, or one dollar, or a gift - he was not privy to that transaction and wouldn't know.

And yes, I'm smarter than to argue with BOE. They are wrong, plain and simple, but you will never get them to admit it without a lengthy court process. If you start that argument with them, it's likely to get expensive. That's why I make a point of never getting into an argument with them. Even when they are wrong, as I firmly believe they are in this case.

BOF had a couple of field agents holding a "symposium" or "conference" the other day. They were told just the day before that they would be doing this talk. One of the themes of their discussion was on how bullet-buttons were illegal, that people who had them possessed assault weapons, and on and on. Well, Jim Howdy! A guy in a suit with a government job SAID SO and so now we're all criminals, right? RIGHT?! A veritable fountain of FUD. Just because someone manages to score a "government job" and learned how to use the agency stationery and the fancy laser printer, does not make them an authority even if by rights, they ought to be. People who are long-time members of this board have seen a virtual torrent of misinformation spewed forth by government representatives over the years. It does not surprise me one bit to see misinformation spread by a government lackey held up as sacred scripture, but I would think most members of this board would look at such assertions with a jaundiced eye and reach for the box of Morton salt with which to take such "counsel".

And for the record I did not say the purchaser was not obligated to pay state tax. I said that the FFL was not obligated to be the tax collector on purchases between the buyer and the third party seller. That's an important distinction.

I don't know you Bruss, but I wish I did. Rarely does one come across such clarity on a web forum. Carry on. And I'm not making an opinion one way or another on who is right in this debate, I just think he expresses himself well, which I find rare.