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rumblebee
11-05-2010, 2:41 PM
I recently bought a new rifle (out of state..from Buds online) and had it shipped to my local FFL......When I went in to FFL for DROS\etc, I was told that I need to pay the CA tax on the amount the rifle was bought for.

Is the above correct? if so, Why would I need to pay CA tax if it was bought out of state?

Thanks

PolishMike
11-05-2010, 2:48 PM
A lot of dealers charge for sales tax.

In the end you ARE supposed to pay sale tax for anything you buy online.

rumblebee
11-05-2010, 2:55 PM
Thanks for the clarification, PM

A lot of dealers charge for sales tax.

In the end you ARE supposed to pay sale tax for anything you buy online.

Too late for that, as the FFL rcv'd the receipt for the non 10 dollar price tag! ;)

so tell them you bought it for a 10 dollars :hide:

kemasa
11-05-2010, 4:15 PM
A CA FFL is required to collect sales tax on firearms which come from a business if that business does not have a presence in CA and collects the sales tax. If the price that you claim is absurd and the FFL gets audited, then there is going to be a problem and most likely it will be with the FFL, but if you provided false documents in order to evade tax, then you could have a problem as well.

If you buy from a private party, it is an occasional sale and the person does not have a business, then no sales tax is required.

CA Sales Tax Firearms Information 495.0843 & 495.0848

http://www.boe.ca.gov/business/Vol2/suta-q-s.pdf

rumblebee
11-05-2010, 5:12 PM
Very good info (thank you) and correct applicable sales tax was paid by myself.

A CA FFL is required to collect sales tax on firearms which come from a business if that business does not have a presence in CA and collects the sales tax. If the price that you claim is absurd and the FFL gets audited, then there is going to be a problem and most likely it will be with the FFL, but if you provided false documents in order to evade tax, then you could have a problem as well.

If you buy from a private party, it is an occasional sale and the person does not have a business, then no sales tax is required.

CA Sales Tax Firearms Information 495.0843 & 495.0848

http://www.boe.ca.gov/business/Vol2/suta-q-s.pdf

ParallaxTactical.com
11-05-2010, 10:54 PM
Our firearms transfer policy is located on the main page of our website on the top left.

Here is the direct link (http://www.parallaxtactical.com/store/pages/firearm-transfer-policy-2.html).

Thanks!

tenpercentfirearms
11-05-2010, 11:03 PM
The BOE considers the FFL the retailer and as such they have a choice to pay the sales tax for you or collect reimbursement for the sales tax from you and still pay it.

Even if the FFL didn't collect it, you are supposed to claim any use tax on your income tax. When the FFL collects it as sales tax, then you don't have to worry about it anymore.

My company will not be assuming the tax liability of our customers on transfers. It simply isn't worth it. Some FFLs will. Do what you feel you have to do, transfers are not my bread and butter, they are more of a service to my customers.

jtmkinsd
11-06-2010, 12:51 PM
The BOE considers the FFL the retailer and as such they have a choice to pay the sales tax for you or collect reimbursement for the sales tax from you and still pay it.

Even if the FFL didn't collect it, you are supposed to claim any use tax on your income tax. When the FFL collects it as sales tax, then you don't have to worry about it anymore.

My company will not be assuming the tax liability of our customers on transfers. It simply isn't worth it. Some FFLs will. Do what you feel you have to do, transfers are not my bread and butter, they are more of a service to my customers.

I'm wondering why nobody has filed litigation in this matter...BOE arbitrarily declares a transfer FFL the "retailer" simply because they hand them the firearm. I don't buy it and sell it, I don't collect tax...it's as simple as that. Trying to say I have to collect tax on an item I have no way of knowing what the purchase price was is ridiculous. IMHO BOE is just trying to shift the burden of collecting tax on internet purchases to someone they can bully around and threaten with audits and such. IMHO it's a constitutional violation of interstate commerce. But that seems all the rage in Sacramento these days. :rolleyes:

dachan
11-06-2010, 1:17 PM
I'm wondering why nobody has filed litigation in this matter...BOE arbitrarily declares a transfer FFL the "retailer" simply because they hand them the firearm. I don't buy it and sell it, I don't collect tax...it's as simple as that. Trying to say I have to collect tax on an item I have no way of knowing what the purchase price was is ridiculous. IMHO BOE is just trying to shift the burden of collecting tax on internet purchases to someone they can bully around and threaten with audits and such. IMHO it's a constitutional violation of interstate commerce. But that seems all the rage in Sacramento these days. :rolleyes:

If you have no way of knowing what the purchase price was (even included receipts may not reflect the true puchase price), why not assume $.10, collect a penny for the BOE (thereby indicating you are aware of the BOE directive) and state on your transfer liability waiver that it is customer's responsibility to correct any difference when declaring Use Tax on their state income tax return?

jtmkinsd
11-06-2010, 2:01 PM
If you have no way of knowing what the purchase price was (even included receipts may not reflect the true puchase price), why not assume $.10, collect a penny for the BOE (thereby indicating you are aware of the BOE directive) and state on your transfer liability waiver that it is customer's responsibility to correct any difference when declaring Use Tax on their state income tax return?

I couldn't see myself explaining a 10 cent purchase price to anyone with a straight face :D

yzernie
11-06-2010, 3:36 PM
Because the BOE rules say if no receipt is present the "fair market value" applies. As much as I would like to dfo such a thing, I doubt the $.10 offering would fly with them.

kemasa
11-06-2010, 4:42 PM
In the case of a firearm, the actual sale occurs when the paperwork is done, not when the payment is made. That is how the BOE gets away with it.

jtmkinsd
11-06-2010, 5:28 PM
In the case of a firearm, the actual sale occurs when the paperwork is done, not when the payment is made. That is how the BOE gets away with it.

Completely an arbitrary statement by the BOE...in reality the "sale" has already taken place when the gun shows up at my door...As a transfer agent, I never take "ownership" of the gun bought online or over the phone, I never have "title" to it, which is a necessary requirement normally. Title to the firearm goes from retailer, to purchaser...Just because I hold the firearm for ten days BOE wants to call me a "retailer". It's BS...with that line of thinking UPS and FedEx should be collecting sales tax on all out-of-State purchases because the "sale" isn't complete until someone signs for the box.

kemasa
11-06-2010, 5:41 PM
Certain items, like firearms, have a specific transfer process. Ownership does not change until the paperwork, such as the DROS, 4473, etc. are completed.

When you receive a firearm, you enter it into your bound book and that means that you basically own it at that point. If a person pays for a firearm, but are prohibited and the firearm can not be transferred to them, did they even "own" the firearm? You say that "Title to the firearm goes from retailer, to purchaser", so please explain how the title changes just because someone pays for it? If I buy a firearm for you and you fill out the paperwork: Did I own it? For how long? How did you suddenly own it if you did not pay for it?

UPS and FedEx are transporting items, not filling out paperwork to transfer ownership.

WTSGDYBBR
11-06-2010, 5:51 PM
so tell them you bought it for a 10 dollars :hide:


I agree with you this is BS. If I buy a rifle out of state I declare I paid 5 bucks for it. If I buy ammo out of state I'm not going to pay sales tax . Dealers should leave it up to the end use to do what they decide to do make a waver .

kemasa
11-06-2010, 5:54 PM
Well, if the declared price is unreasonable, don't expect the FFL to do the transfer and that could cost you far more.

The problem is that the FFL is a CA business and has to follow the laws and the FFL is also an easy target for the BOE to go after.

OCArmory
11-06-2010, 5:55 PM
If they are denied the way I see it is they still own the firearm but are not able to take possession of it. I can then dispose of it for them, return it to the seller or find some other solution (that is legal). I have guns that have been here a year for a denied purchase. They do not belong to me so there is nothing I can do but hold them.
Mike

WTSGDYBBR
11-06-2010, 5:58 PM
If they are denied the way I see it is they still own the firearm but are not able to take possession of it. I can then dispose of it for them, return it to the seller or find some other solution (that is legal). I have guns that have been here a year for a denied purchase. They do not belong to me so there is nothing I can do but hold them.
Mike

That's sucks who ever ordered them. You got any 1919a4 that stuck cheap.

kemasa
11-06-2010, 5:59 PM
The person has a interest in the firearm, but since the paperwork was not done, they do not own it. The same as if you paid for a vehicle, but did not transfer the title.

I have a customer agreement that if the firearm is left over 45 days, then it is mine unless it is agreed to in advance. You can also charge for long term storage. So, there is something that you can do.

yzernie
11-06-2010, 6:26 PM
I don't neccesarily agree with it either but.........

jtmkinsd
11-06-2010, 7:00 PM
Certain items, like firearms, have a specific transfer process. Ownership does not change until the paperwork, such as the DROS, 4473, etc. are completed.

So how do I "own" it if I've not done DROS, 4473 on it. If I have a receipt for it, then I own it, irregardless of who has possession of it or where it is.

When you receive a firearm, you enter it into your bound book and that means that you basically own it at that point.

I'd love to see any Federal/State or even common law or anything in BATFE/DOJ regulations that supports this assumption...anything other than the statement by BOE.

If a person pays for a firearm, but are prohibited and the firearm can not be transferred to them, did they even "own" the firearm? You say that "Title to the firearm goes from retailer, to purchaser", so please explain how the title changes just because someone pays for it? If I buy a firearm for you and you fill out the paperwork: Did I own it? For how long? How did you suddenly own it if you did not pay for it?.

If you buy a firearm for resale...you own it until you sell it...and you are liable for collecting tax...If someone buys a firearm as a gift...they own it...until it's gifted, and that is a transaction between gifter and giftee. "Title", in a legal sense is having an "interest" in the item...paying money for the item gives the purchaser the interest in the gun...when the retailer gets the money...they no longer have an interest in the gun. It's not like a car which has a paper "title"

UPS and FedEx are transporting items, not filling out paperwork to transfer ownership.

Neither am I...nothing on any form I fill out says anything about ownership...the only thing I do is submit their name for a background check and keep a federal form which has the info on the person and the gun.

jtmkinsd
11-06-2010, 7:09 PM
The person has a interest in the firearm, but since the paperwork was not done, they do not own it. The same as if you paid for a vehicle, but did not transfer the title.

I have a customer agreement that if the firearm is left over 45 days, then it is mine unless it is agreed to in advance. You can also charge for long term storage. So, there is something that you can do.

But you do not "own" it until the 45 days are over...You have no "title" (and by this term I mean interest in the item) to the firearm.

halifax
11-06-2010, 7:54 PM
I don't think ownership has anything to do with it. It has to do with the CA dealer being deemed (under section 6007) to be the "agent" and the "nexus" for the retail sale by an unregistered out-of-state retailer.

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.)

jtmkinsd
11-06-2010, 8:03 PM
I don't think ownership has anything to do with it. It has to do with the CA dealer being deemed (under section 6007) to be the "agent" and the "nexus" for the retail sale by an unregistered out-of-state retailer.

Yeah I get that...and that was my original argument...nobody has challenged BOE in court as to weather they can arbitrarily "deem" someone as the "agent" for a retail sale of out-of-state goods. As was said by kemasa...FFLs are an easy target...but it doesn't make what they are doing constitutionally acceptable.

ZirconJohn
11-06-2010, 8:26 PM
Im am not in a position to tangle with the BOE... I rather spit in the eye of a
very angry rattle snake than go toe-to-toe with the BOE...!

With all due respect to various posters here on this thread; because this
thread is repeat about every couple of months or so. But that's okay... I
understand and I not gonna get into it... the previous posts for reasons why
sales tax added to out-of-State sales etc... are correct.

Anyway... again, with all due respect fellow CG'ers...,
I have this to say..., if you want to do it your way, get an FFL Dealer Class 1,
a business license, and a CA State Board of Equalization Sellers Permit and,
and... and then do it your way, go ahead and have atter...! :thumbsup:

The BOE will be your friend :sarcasm:

jtmkinsd
11-06-2010, 9:30 PM
The reason the tax is collected is clear...nobody I know of disputes that. I was just asking about litigation to see if BOE's determination was legal, and answering the points brought up by others. Just a discussion on the matter...IMHO BOE is out of line when they make up a determination like this. I get the fact it's not me that get's the screws put to them, in the end it's the customer, because any cost is going to be shifted to them.

SVT-40
11-06-2010, 11:02 PM
Tax is collected of consigned guns when they sell. So why would a transfer be any different? In both cases the dealer does not actually own the guns in question and is only acting as the agent for the sale.

jtmkinsd
11-06-2010, 11:12 PM
Tax is collected of consigned guns when they sell. So why would a transfer be any different? In both cases the dealer does not actually own the guns in question and is only acting as the agent for the sale.

Consignment guns are a whole different animal...in fact, I have to specifically have a second hand seller's permit to sell them...I am taking a controlling interest in the firearm...selling it...and forwarding a portion of the proceeds to the original owner. When someone buys a gun online, and has it shipped to my shop, I have no controlling interest in the firearm at all...all I am really is a secure storage unit so the State can determin if the owner is a prohibited person.

tenpercentfirearms
11-07-2010, 7:17 AM
I agree with you this is BS. If I buy a rifle out of state I declare I paid 5 bucks for it. If I buy ammo out of state I'm not going to pay sales tax . Dealers should leave it up to the end use to do what they decide to do make a waver .
This would be a horrible idea. The BOE considers me the retailer. If I do not collect the sales tax from the customer, I still owe it. If I do no pay it, I will then owe the sales tax plus penalties and interest. A waiver will just make the BOE laugh.

When the BOE says you are the retailer, then until someone fights it and wins in court, you are the retailer.

The reason the tax is collected is clear...nobody I know of disputes that. I was just asking about litigation to see if BOE's determination was legal, and answering the points brought up by others. Just a discussion on the matter...IMHO BOE is out of line when they make up a determination like this. I get the fact it's not me that get's the screws put to them, in the end it's the customer, because any cost is going to be shifted to them.

Lead by example. We have been waiting on you to take this project over.

Personally, I'll pass due to the fact even if we don't collect the sales tax, the consumer still owes the Use Tax. The only benefit to not collecting the sales tax is so the consumer can skip their Use Tax, which is still illegal. So if a consumer really had the best intentions and didn't want to just avoid taxes, then they would gladly let the dealer collect sales tax, keep their receipt, and not worry about Use Tax at the end of the year. Clearly we know why the consumer gets upset when we collect the sales tax.

halifax
11-07-2010, 7:38 AM
When I applied for the Seller's Permit, I agreed to follow the regulations. Even if the BOE doesn't charge me a penny in back taxes (doubtful), they can yank my permit for cause. How long would I remain in business without a Seller's Permit?

kemasa
11-07-2010, 7:40 AM
When a firearm is transferred into your bound book, you basically own it. You might not have a money interest in it, but the title has changed. Ownership is then changed when the firearm is transferred to a person with the 4473 and DROS.

While the title is a bit different with a firearm vs. a vehicle, it is somewhat the same. You can pay for a vehicle, but you don't really own it until the title is transferred. While vehicles have titles, there is a trace of the firearm which shows ownership. What do you think it means when you enter a firearm into your bound book?

In the case of when I have a firearm, I do have an interest in the firearm even if I did not pay anything for it. I did work in receiving it and dealing with it. The person who paid can not expect me to do anything with it if I do not get paid. There is basically a lien on the firearm, just like if you took an item in for repair. When it is in my bound book, I have control of the firearm, which amounts to ownership. In the case of a strawman purchase, I did what I wanted to with the firearm rather than the person you claim owned it and there was nothing that person could do about it.

The sale is done with the filling out and completing the paperwork for the firearm.

CSACANNONEER
11-07-2010, 7:49 AM
ANYTHING purchased out of state and brought to Ca requires the owner to pay a use tax. In the case of firearms, it's easy to track the sales and there is a great arguement for the transaction actually being done at the buyer's FFL. But, again, ANYTHING you purchase out of state is subject to a use tax if brought into CA. If you don't claim every online, catalogue, mail order purchase or the purchases you made while out of state (even if you pay sales tax in that other state) you are commiting tax fraud and are in fact a criminal.

OK, let's see who is dumb enough to admit that they don't pay taxes on ALL their purchases.

halifax
11-07-2010, 8:09 AM
Yeah I get that...and that was my original argument...nobody has challenged BOE in court as to weather they can arbitrarily "deem" someone as the "agent" for a retail sale of out-of-state goods. As was said by kemasa...FFLs are an easy target...but it doesn't make what they are doing constitutionally acceptable.

How is it "arbitrary"? You made an agreement with an unregistared out-of-state retailer to accept a firearm (tangible personal property) for transfer to a CA resident in CA. When you made that agreement, by sending a copy of your FFL, you made yourself the agent, not the BOE. Nothing arbitrary about it.

6007. A "retail sale" or "sale at retail" means a sale for any
purpose other than resale in the regular course of business in the
form of tangible personal property.
When tangible personal property is delivered by an owner or former
owner thereof, or by a factor or agent of that owner, former owner,
or factor to a consumer or to a person for redelivery to a consumer,
pursuant to a retail sale made by a retailer not engaged in business
in this state, the person making the delivery shall be deemed the
retailer of that property. He or she shall include the retail selling
price of the property in his or her gross receipts or sales price.


NOTE: 6007 is the guiding LAW not just an annotation.

rrr70
11-07-2010, 8:29 AM
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. 99–2).

When an out-of-state retailer sells an item to the California resident, it is safe to say that said retailer is engaged in conducting business in this state even if this retailer is not registered with the Board.
Tell me I'm wrong.

kemasa
11-07-2010, 8:56 AM
You wanted to be told that "You are wrong", that is the case so: You are wrong.


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


You need to read 6203 to decide if you can:


establishes to the satisfaction of the Board


http://www.boe.ca.gov/sutax/6203.htm

The first part means that you have to do something, which is to establish to the BOE. Have you done that? First you have to try, second the BOE has to be satisfied and if neither happens, you can't claim that. In order to do that, you have to prove that:


the out-of-state retailer was engaged in business in this state under section 6203


If you have not read 6203, then ...

BTW, if you do do all of that, then the BOE would go after that company for all the sales tax and they would love that since then they would get all taxes for any shipments to CA.

Oh, also we could talk about resale licenses :-).


6203 (c) "Retailer engaged in business in this state'' as used in this section and Section 6202 means and includes any of the following:

1. Any retailer maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business.
2. Any retailer having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this state under the authority of the retailer or its subsidiary for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property.
3. As respects a lease, any retailer deriving rentals from a lease of tangible personal property situated in this state.
4. (A) Any retailer soliciting orders for tangible personal property by mail if the solicitations are substantial and recurring and if the retailer benefits from any banking, financing, debt collection, telecommunication, or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing, or repair facilities.
5. (B) This paragraph shall become operative upon the enactment of any congressional act that authorizes states to compel the collection of state sales and use taxes by out-of-state retailers.

(5) Notwithstanding Section 7262, a retailer specified in paragraph (4) above, and not specified in paragraph (1), (2), or (3) above, is a ''retailer engaged in business in this state'' for the purposes of this part and Part 1.5 (commencing with Section 7200) only.

halifax
11-07-2010, 9:23 AM
When an out-of-state retailer sells an item to the California resident, it is safe to say that said retailer is engaged in conducting business in this state even if this retailer is not registered with the Board.
Tell me I'm wrong.

It's really not as simple as that. Just taking an order from a CA resident does not establish that a "retailer is engaged in conducting business in this state" and you would need to establish such, to the satisfaction of the BOE, for each and every transfer you did.

6203. Collection by retailer.

a.Except as provided by Sections 6292 and 6293, every retailer engaged in business in this state and making sales of tangible personal property for storage, use, or other consumption in this state, not exempted under Chapter 3.5 (commencing with Section 6271) or Chapter 4 (commencing with Section 6351), shall, at the time of making the sales or, if the storage, use, or other consumption of the tangible personal property is not then taxable hereunder, at the time the storage, use, or other consumption becomes taxable, collect the tax from the purchaser and give to the purchaser a receipt therefor in the manner and form prescribed by the board.
b.As respects leases constituting sales of tangible personal property, the tax shall be collected from the lessee at the time amounts are paid by the lessee under the lease.
c."Retailer engaged in business in this state'' as used in this section and Section 6202 means and includes any of the following:
1.Any retailer maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business.
2.Any retailer having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this state under the authority of the retailer or its subsidiary for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property.
3.As respects a lease, any retailer deriving rentals from a lease of tangible personal property situated in this state.
4.(A) Any retailer soliciting orders for tangible personal property by mail if the solicitations are substantial and recurring and if the retailer benefits from any banking, financing, debt collection, telecommunication, or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing, or repair facilities.

d.(1) For purposes of this section, ''engaged in business in this state'' does not include the taking of orders from customers in this state through a computer telecommunications network located in this state which is not directly or indirectly owned by the retailer when the orders result from the electronic display of products on that same network. The exclusion provided by this subdivision shall apply only to a computer telecommunications network that consists substantially of online communications services other than the displaying and taking of orders for products.

Really, it would be great for a judge to rule that anyone or any entity that sells to a CA resident is in-fact engaged in business in CA and leave the burden of proof on the BOE to establish otherwise.

jtmkinsd
11-07-2010, 12:11 PM
Really, it would be great for a judge to rule that anyone or any entity that sells to a CA resident is in-fact engaged in business in CA and leave the burden of proof on the BOE to establish otherwise.

THIS...would be most excellent. :D

jtmkinsd
11-07-2010, 12:17 PM
6007. A "retail sale" or "sale at retail" means a sale for any
purpose other than resale in the regular course of business in the
form of tangible personal property.
When tangible personal property is delivered by an owner or former
owner thereof, or by a factor or agent of that owner, former owner,
or factor to a consumer or to a person for redelivery to a consumer,
pursuant to a retail sale made by a retailer not engaged in business
in this state, the person making the delivery shall be deemed the
retailer of that property. He or she shall include the retail selling
price of the property in his or her gross receipts or sales price.

So...reading the text of the law...why is UPS and FedEX not the retailer for delivering goods from out of state for the "former owner"?

I'm sure it's because under the commerce clause they can't...but the commerce clause doesn't stop at the CA border...and that was my original point. When it comes to firearms...I'm simply a delivery guy. I have no vested interest in the firearm.

kemasa
11-07-2010, 1:01 PM
Because UPS and FedEx are shippers and are in a special, distinct class. Look up some of the special laws and regulations regarding common carriers.

No, you are NOT simply a delivery guy. You are a licensed business engaged in the selling and transfer of firearms. Not everyone can sell or transfer a firearm since licenses and permits are needed. You do have a vested interest as you are making money (or at least could) from the transfer of the firearm.

The bottom line is that you can't just try to make the law what you want it to be. You can't just read bits and pieces and ignore the parts that either you don't like or don't care to read.

jtmkinsd
11-07-2010, 1:42 PM
Because UPS and FedEx are shippers and are in a special, distinct class. Look up some of the special laws and regulations regarding common carriers.

No, you are NOT simply a delivery guy. You are a licensed business engaged in the selling and transfer of firearms. Not everyone can sell or transfer a firearm since licenses and permits are needed. You do have a vested interest as you are making money (or at least could) from the transfer of the firearm.

The bottom line is that you can't just try to make the law what you want it to be. You can't just read bits and pieces and ignore the parts that either you don't like or don't care to read.

I get your point...my question was originally meant to question why the law has never been tested...just because it's a law doesn't mean it's constitutional...we see that very often...I know nobody wants to go "toe to toe" with the BOE...but it doesn't mean what they put on the books is automatically legal. It just hasn't been tested was my point. Common carriers are put in a special class because they deal primarily in interstate commerce...I do very little retail sales, and the majority of my business is from firearms shipped in from out of state...IMHO BOE is interfering with interstate commerce by demanding I collect tax on an out of state purchase. I know..."if you feel so strongly why don't you file suit?" At some point...I may...probably when I'm ready to retire so I can mitigate the risk.

SVT-40
11-07-2010, 1:54 PM
Consignment guns are a whole different animal...in fact, I have to specifically have a second hand seller's permit to sell them...I am taking a controlling interest in the firearm...selling it...and forwarding a portion of the proceeds to the original owner. When someone buys a gun online, and has it shipped to my shop, I have no controlling interest in the firearm at all...all I am really is a secure storage unit so the State can determin if the owner is a prohibited person.


You are "forced" to have a state license to sell any firearm. It matters not whether it's consigned, store inventory or one which may come from another dealer in another state.


But since you are a state licensed dealer you are an agent of the state. Thus you must collect sales tax. And you do take a interest in all firearms which pass through your books.

bohoki
11-07-2010, 1:56 PM
In the case of a firearm, the actual sale occurs when the paperwork is done, not when the payment is made. That is how the BOE gets away with it.

thats crazy the whole situation is unjust as when you pay an individual that is who you bought it from not the ffl

if the ffl is collecting tax they should be fronting the purchase price as well then you pay the ffl

the reason this stands is because ther is not a decent analogy to this situation

firearms are just unique in this

i personally think it is an issue of privacy and if the bof is expecting the ffl to come up with a fair market value they should be compensated by the BOe for an appraisal

i sure know that they do not collect tax on instate private party transfers

jtmkinsd
11-07-2010, 2:03 PM
thats crazy the whole situation is unjust as when you pay an individual that is who you bought it from not the ffl

if the ffl is collecting tax they should be fronting the purchase price as well then you pay the ffl

the reason this stands is because ther is not a decent analogy to this situation

firearms are just unique in this

i personally think it is an issue of privacy and if the bof is expecting the ffl to come up with a fair market value they should be compensated by the BOe for an appraisal

i sure know that they do not collect tax on instate private party transfers


We don't collect tax on interstate transactions between private parties either...only retail sales, which is normal.

kemasa
11-07-2010, 2:25 PM
The sales tax requirement is no different between in-state and out of state, so the claim that they are "interfering with interstate commerce by demanding I collect tax on an out of state purchase" just does not hold water. It really does not matter who pays for it since there is required paperwork to transfer the firearm and that is what counts and that is when the sale/transfer occurs. If you buy and pay for a firearm from out of state, but have it shipped to a friend in another state, CA sales tax is not collected.

In this case payment of the firearm does not matter, it is the sale/transfer of the firearm which occurs at a CA business. There are aspects which can make the firearm tax exempt, such as when it comes from a private party or is a gift from out of state.

Also, if you think that a PPT is always tax exempt, you are wrong. If the FFL finds the buyer, as in a consignment, but not just limited to that, or negotiates the price of the firearm, then sales tax is due. This is, of course, harder to prove, but if it can be shown, then they can go after you.

The FFL does not have to do an appraisal if there is a valid receipt. so the claim that they should be compensated by the BOE is strange. The buyer would have to pay in that case, there is no basis for the BOE to pay. If you were to try to go down that route, then the state should have to pay for all firearms transfers.

Take a look at vehicle sales. It is close to the same since payment of money does not matter, it is when title is transferred, but in this case private sales are also taxed. You don't get out of paying because you bought the vehicle from out of state, or even from a private party out of state.

There are odd things with sales tax and specifics make a different. Consider a donation. If the company gives a donation and ships it, then CA sales tax is not due, but if they give it and bring it to CA to give it, then sales tax is due because it was given in CA.

jtmkinsd
11-07-2010, 3:29 PM
The biggest problem I have is the willy-nilly enforcement...and why FFL's are singled out (again, I know we're an easy target)...for instance, in the case of PPT's in CA, the seller is considered by the BOE to be the retailer...and by law, they are responsible for the sales tax on their firearm sale...even though they go through the same process as out-of-State retailers...does that make any sense?

Obviously, I know they are just wrestling with how to collect taxes on internet sales...As was stated earlier, if I am the "agent" for an out-of-State retailer when I've entered into the loop, then an argument could be made the retailer is "engaged in business" in the state...BOE doesn't have to accept, and would scoff at such a proposal...but the tax should be collected by the retailer at time of purchase...I shouldn't have to do any "research" or guessing as to the "fair market value"...it's ridiculous. Going after the retailers is a no-go though because in Quill v. North Dakota the SCOTUS ruled "requiring these companies to comply with the varied sales tax rules and regulations of 45 states and some 7,500 different local taxing jurisdictions would burden interstate commerce."

They did leave the door open to the Federal Legislature to fix the problem though...sadly there has been NO movement on this since the SCOTUS ruling.

kemasa
11-07-2010, 3:47 PM
What are you talking about with a PPT and the seller being the retailer and collecting sales tax???

In the case of a PPT, where the FFL does not get involved with finding the buyer nor dealing with the price, it is a private sale and is sales tax exempt or in other words the seller is not responsible for collecting the sales tax because there is not sales tax collected. There is also no sales tax on the FFL transfer fee, which if the firearm was taxable, would need to be collected (that area is really messed up since if a person buy from business which collects sales tax, that business is also supposed to collect the sales tax on the transfer dealer's fee).

No, it does not make any sense because it is wrong.

There are other special cases, but in the case of FFL it is because the item goes through a CA business. You should be thankful that the CA BOE does not say that sales tax has to be collected on every firearm (like vehicles).

jtmkinsd
11-07-2010, 4:02 PM
What are you talking about with a PPT and the seller being the retailer and collecting sales tax???

See here...page 2, about half way down.

http://www.boe.ca.gov/sutax/annotations/pdf/495.0843.pdf

Muddy waters is what I'm saying...what exactly is exempt, and what isn't...if they show up at my shop, and are still actively bartering the price, is it still exempt?

kemasa
11-07-2010, 4:23 PM
Unless the sale is exempt from tax,


So, if in that case it is not exempt from sales tax, that person would be required to collect the tax. An example would be if it was not an occasional sale.

If you are not involved in the price, then it is still exempt. They can talk all they want between themselves. If you get involved trying to talk the price up or down, then you could have put yourself into a position where you should collect sales tax, so just don't do that.

See also:

http://www.boe.ca.gov/sutax/annotations/pdf/295.1675.600.pdf

jtmkinsd
11-07-2010, 4:40 PM
Ya...saw those...I guess I really would just like Congress to get off their duff and fix the stinking problem