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Brian1979
01-25-2012, 9:21 PM
As I understand it I am going to now pay tax on my incoming gun since it was purchased from a dealer and ordered by them through the manufacture.

I would love to find a way around this and not have to pay just as it were before but it seems the time has come and that loop hole is now closed.

My question is about when the tax money is collected by the FFL. What is to say they dont just take the money and keep it? I just dont trust how this is going down and it seems so ghetto to just figure a price on the gun and multiply that to the local tax rate then ask me to hand the money over. How will the FFL determine a price if the receipt is sent to me? Can the dealer just send a receipt for a lesser price or is that crossing some lines that I dont want to mess with? How can I be sure I am not getting ripped off and that the FFL doesnt just pocket my money?

Dont get me wrong in asking this. I dont intend to come off like a scum bag but I dont intend to give the IRS every last penny either. I pay plenty of taxes and figure that the sale occurred out of state so this rule is BS but realize there is nothing I can do to change it. Simply because a FFL is required to transfer the gun is how this is even possible vs any other type of online transaction which doesnt collect tax if not bought and sent with in that state. This seems like an all to easy task to collect and obviously why its been done. It is what it is and I have to accept it but I want to be sure I am not getting screwed and that I full understand what is going on here.

If there is a way around all this please PM me some info and educate me before going through the process. Please give me some info to educate me on the matter so I am not taken advantage of and am assured my money gets sent to the IRS. In other words should I pay the tax on credit card or by some other means then cash to protect myself?

Thanks

dctex99
01-25-2012, 9:27 PM
How do you know Walmart doesn't pocket the money; How do you know the bar where you pay CASH doesn't pocket the money(some do) You are dealing with people that HAVE to keep records that can be audited at any time!!!! Use some common sense; the state gets the money AND the state NEEDS the money!!!!!!!!!:facepalm:

keenkeen
01-25-2012, 10:50 PM
AND the state NEEDS the money!!!!!!!!!:facepalm:

We will just have to agree to disagree on that one...

:rolleyes:

tenpercentfirearms
01-25-2012, 11:40 PM
This has been hashed out ad nauseum.

http://www.calguns.net/calgunforum/showthread.php?t=366781

You have no guarantees that anyone that collects sales tax is going to actually send it to the BOE. Do you worry about everyone you pay tax to whether they are actually sending it in or not? If not, then why an FFL? What is it about FFLs that make you think they are more likely to pocket the money?

Further if the FFL pockets the money and doesn't give it to the state, how exactly are you getting screwed? That money comes out of your pocket if it goes to the BOE or if it goes into the dealer's pocket (which is a criminal act and subject to some serious consequences). If you are so concerned about the state taking your money and trying to get around sending them your money, I would think you would be happy that a dealer steals it from the state and buys more guns with it.

Personally if some local store is stealing my tax dollars, it wouldn't bother me any. They will get caught eventually and they will be punished for it. I am not sure how that measly tax money could be worth years in jail over, but I don't care. Once I give the money to them, it is gone.

As a retail sales permit holder, I can't think of anything stupider than keeping your sales tax dollars. First of all there is a huge audit trail. My point of sale system tracks what I take in and what I pay to them. If I just took the money, in an audit they are going to figure it out right away.

So to try and cover my tracks, I would have to try and alter my POS sales receipts. Again, a horrible idea because there doesn't appear to be a way to actually erase receipts, they are always tracked even if canceled. In fact if I did that, then it would be an even easier trail for the BOE to follow by just looking at all of my canceled transactions (there aren't that many).

If a customer ever suspected me of stealing sales tax, they could simply report it and then hand their receipts over to the BOE and tell them to check it. Again, not that difficult.

So again, why would an FFL want to do this? How would the benefit be worth the risk?

Good luck with your sales tax witch hunt. You pay so many people for sales tax, you are going to need all the help you can get with that paranoia.

bubbapug1
01-26-2012, 12:06 AM
As I understand it I am going to now pay tax on my incoming gun since it was purchased from a dealer and ordered by them through the manufacture.

I would love to find a way around this and not have to pay just as it were before but it seems the time has come and that loop hole is now closed.

My question is about when the tax money is collected by the FFL. What is to say they dont just take the money and keep it? I just dont trust how this is going down and it seems so ghetto to just figure a price on the gun and multiply that to the local tax rate then ask me to hand the money over. How will the FFL determine a price if the receipt is sent to me? Can the dealer just send a receipt for a lesser price or is that crossing some lines that I dont want to mess with? How can I be sure I am not getting ripped off and that the FFL doesnt just pocket my money?

Dont get me wrong in asking this. I dont intend to come off like a scum bag




Why would ANYONE get the impression from your thread you were even remotely a scumbag????

:confused:

Shoobee
01-26-2012, 12:10 AM
I help businesses collect and pay their sales taxes to the various states every month.

The states have various means to track down corporate tax cheats and collect their sales taxes with penalites (10%) and interest (4%/yr) thereon.

I would not worry about a business collecting their consumer taxes and remitting them to the states. The states are good at sniffing out cheats.

Munk
01-26-2012, 1:00 AM
You already owed the tax in the first place, you probably just never claimed your out-of-state purchases on your tax form. The state just put the onus of paying the tax on the FFL, then allowed the FFL to collect the tax from the consumer. Tax dodging has brought down some big people, and CA is rather good at finding tax problems. If you cheat your way out of sales tax at the FFL, you may be condemning that store. Do you really want to do that?

I help businesses collect and pay their sales taxes to the various states every month.

The states have various means to track down corporate tax cheats and collect their sales taxes with penalites (10%) and interest (4%/yr) thereon.

I would not worry about a business collecting their consumer taxes and remitting them to the states. The states are good at sniffing out cheats.

CA is so good with penalties, that less than 1 month after an income tax error was discovered on my form, I owed a penalty... I paid. 2 weeks later, I get a second bill for the interest that accrued on my "debt" for the few weeks that I "owed" them for the penalty and difference in tax amounts.

We will just have to agree to disagree on that one...
Heh, the state (like the feds) need to start slashing budgets and eliminating wasteful spending. I detest the way the government has turned deficit spending into an acceptable practice.

Shoobee
01-26-2012, 1:12 AM
If you had a chance to go to college, and to take any econ courses, and you paid attention and read the book(s), and you still can remember any of it, then you would recall that during the depths of a really deep recession is NOT the time to "cut deficits."

I know I know, Boener repeats all the time that it should be done. Like a broken record. It's a pity that so many people actually believe him. I am sure he stands in front of the mirror every night when he gets home and laughs, thinking about how may people he fooled on any given day.

Dingoguns
01-26-2012, 1:29 AM
I would love to find a way around this and not have to pay just as it were before but it seems the time has come and that loop hole is now closed.


There never was a loophole; you have always been expected to pay tax on all out of state purchases. You simply haven't been doing so, which is a violation of the tax code.

Basically, what it comes down to is that the BOE is now forcing us FFL's to enforce tax code on out of state transactions, something that really shouldn't be our problem. I don't want the responsibility, and I'm sure that a fair number of other dealers feel the same way.

Perhaps instead of complaining about the extra +/-10% you now have to pay when buying a firearm from out of state (and did I mention, should have been paying on every purchase?), you should be thanking those of us who do collect tax for helping you stay out of jail.

Brian1979
01-26-2012, 6:27 AM
My concern is that when you purchase something in a store they sold it to me and the selling price is listed along with the tax owed. In this FFL situation I never bought the gun from them and they have no idea what it cost other then looking the gun up online which still isnt accurate to what I paid. This to means that it should be very easy of them to collect tax on one amount and then later lower that amount on their records and keep a portion of the money.

I pay a hell of a lot taxes so dont give me crap. This is something that concerns me because of the way it is setup not because I have to actually pay it. I would much rather report what I buy myself and pay up directly then to trust the system set in place with the FFL right now.

At this point if tax is due I am fine with that but I wish it were collected by the person actually selling the gun. The way it is setup now just welcomes fraud.

tenpercentfirearms
01-26-2012, 6:59 AM
My concern is that when you purchase something in a store they sold it to me and the selling price is listed along with the tax owed. In this FFL situation I never bought the gun from them and they have no idea what it cost other then looking the gun up online which still isnt accurate to what I paid. This to means that it should be very easy of them to collect tax on one amount and then later lower that amount on their records and keep a portion of the money.

I pay a hell of a lot taxes so dont give me crap. This is something that concerns me because of the way it is setup not because I have to actually pay it. I would much rather report what I buy myself and pay up directly then to trust the system set in place with the FFL right now.

At this point if tax is due I am fine with that but I wish it were collected by the person actually selling the gun. The way it is setup now just welcomes fraud.

Again, if you have a POS receipt from me saying you paid $72.50 in tax on a $1000 purchase, I have to go back and cancel that receipt and change it to a lesser amount. That leaves a paper trail a mile long. So what am I going to change it to? $500? So I get $36.25 to put in my pocket. Man, that is so worth getting busted over. What a great idea, I am going to jump right on that. The BOE would never question why a Benelli M2 was only $500.

Further, when you give the FFL a receipt that shows what you paid, how does that FFL make your receipt go away? They generate a new one? Again, this is a lot of work for $36.25 with a whole lot of consequences if I get caught. And again in an audit, a simple checking with the shipping FFL will show the FFL has been cheating the system. Not paying your sales tax out of ignorance is one thing, actively committing tax evasion is another.

So it is put up or shut up time. Do you actually have any proof that any FFL is actually cheating their taxes? Is there actual documented evidence that this is a serious concern other than in your mind?

Again in the end, your logic is flawed as well. You are required to pay the tax either way. So that money will leave your hands and go somewhere. You are concerned you are going to get cheated. You will not get cheated. The tax payers will get cheated. Something you were just asking if you could get away with at the start of the very thread.

If I were into reading between the lines, it would appear to me that you actually are really upset you can't cheat your taxes anymore. How many of your out of state retail purchases did you actually claim in previous years? I am willing to bet zero.

Life is too short to worry about whether other people are following the law or not. Well to me anyway. I know where my integrity and honor stands, but even if I wasn't sure, I sure as hell wouldn't cheat the BOE in a highly regulated industry like firearms sales where everything is tracked through multiple governmental agencies.

For those of you who think FFLs are all dirty and want to steal your tax money, relax. We do not make tax law and we didn't ask to collect sales tax on out of state purchases. Getting all huffy and puffy and going after FFLs over this is silly. We are stuck complying with the law just like you. Personally, paying the sales tax at the FFL and having a receipt that shows it was paid seems a lot easier than having to file it on your taxes at the end of the year. Unless of course you weren't planning on filing it on your taxes at the end of the year. But who does that make a fraudster and tax cheat?

Brian1979
01-26-2012, 7:21 AM
I am talking several hundred here not $36. We are clearly on different pages here so instead of accusing back and forth I will simply thank you for the info you provided.

Shoobee
01-26-2012, 7:23 AM
Usually when a business "steals" tax money it is because they are running out of cash.

When that happens, it is then a race between the IRS and the State to take over the business and then shut it down.

Usually the IRS wins.

keenkeen
01-26-2012, 7:59 AM
If you had a chance to go to college, and to take any econ courses, and you paid attention and read the book(s), and you still can remember any of it, then you would recall that during the depths of a really deep recession is NOT the time to "cut deficits."

I know I know, Boener repeats all the time that it should be done. Like a broken record. It's a pity that so many people actually believe him. I am sure he stands in front of the mirror every night when he gets home and laughs, thinking about how may people he fooled on any given day.

Eliminating wasteful government spending does not hurt the economy, in fact many many economists would argue just the opposite. Of course you may believe there is no waste to be cut in the California budget.

Also, you may want to pull out those college econ books and review your notes. Per the accepted definition of "recession" we are currently not in one and are certainly not in "a really deep recession".

Knowledge is power...

kemasa
01-26-2012, 8:49 AM
Can the dealer just send a receipt for a lesser price or is that crossing some lines that I dont want to mess with?

Why would you want to put the FFL through that? I just recently had to deal with that because the dealer sent a false receipt. It might have been a mistake, but it really does not matter to me why. The FFL should refuse to do the transfer if they find out and then you are going to have real problems. In my case, the FFL called the CA DOJ to complain, so I had to explain the situation to the DOJ, which I did not care for, but what I thought was funny was that the person at the DOJ told me that they told the other FFL that due to the sales tax issues I could turn the firearms over to the local police and then the shipping FFL could deal with what results. It is hard to say what would happen and if the firearms would ever get returned anywhere. It is also possible to hold the firearms, such as a mechanics lien, including storage charges.

I also have a section in my customer agreement in which you lose all rights in the firearm if you attempt this. While it might not be upheld in court, it just might be, are you willing to take that risk? I am since even if I lose, I don't have to transfer the firearm to you and there is the concept of "dirty hands". A nice countersuit for expenses and time would also be in order.

So, as much as I hate the waste in government and as much as I don't want to have to collect the sales tax, I am not about to put myself at risk for you, especially considering that the FFL gets nothing out of it other than a huge risk. You might also consider what the end result of a tax evasion charge would be.

So, the bottom line is don't play games, don't put the FFL in the middle, save sales tax money by finding a good deal, not by breaking the law. Get people out to vote and try to restore the government to one of for and by the PEOPLE, not the politicians (take away all the government vehicles from them and let them buy their own vehicles like the rest of us, which will save a lot of money).

tenpercentfirearms
01-26-2012, 2:50 PM
I am talking several hundred here not $36. We are clearly on different pages here so instead of accusing back and forth I will simply thank you for the info you provided.

Several hundred dollars? So you are transfering more than $10,000 at once or even in a year? I am not disputing you are as I had to collect $800 in transfer sales tax on a purchase before. That guy didn't even bat an eye or make a single accusation. I told him to keep his receipt just in case the state ever asked where their money was.

Still the question remains, were you ever paying your use tax? Is $360 even worth a dealer going to prison over? Is there a larger issues of dealers keeping the money?

Or are people just upset they can't cheat on their taxes anymore?

Brian1979
01-26-2012, 5:09 PM
Perhaps some of you should run for president next time since you are so perfect and free from cheating absolutely anything?:rolleyes:

The mentality I am seeing are from tax recipients and not tax payers so I fully understand the hate being generated here. Enjoy your returns and just know that people like me will keep pushing you along with working hard and earning less because we pay so damn much in tax. Some times it pays to be at the bottom and complain and I wish those of you in this situation the best. Be sure to claim all your online purchases and be sure to only write off EXACTLY what you are entitled to.

keenkeen
01-26-2012, 5:44 PM
So you are transfering more than $10,000 at once or even in a year?

For me, yes, way more...I should have never started keeping that spreadsheet on $ spent on guns.

:chris:

kemasa
01-26-2012, 7:56 PM
Perhaps some of you should run for president next time since you are so perfect and free from cheating absolutely anything?:rolleyes:

The mentality I am seeing are from tax recipients and not tax payers so I fully understand the hate being generated here. Enjoy your returns and just know that people like me will keep pushing you along with working hard and earning less because we pay so damn much in tax. Some times it pays to be at the bottom and complain and I wish those of you in this situation the best. Be sure to claim all your online purchases and be sure to only write off EXACTLY what you are entitled to.

You original response was interesting.

It seems clear that you don't get that no FFL wants to violate the law for you to pay less sales tax.

You should also know that the CA BOE, not the IRS, is the one collecting it and that the amounts are rounded to the nearest dollar, which seems to happen that you end up paying more to the BOE than you collected.

If you don't like, get people together and thrown the bums out of office and get more reasonable people in and then get the laws changed. Don't complain about the FFLs who are forced to follow the laws.

Brian1979
01-27-2012, 5:58 AM
I am not mad at the FFLs. I am mad at the situation and that they are being forced to do this. I am concerned that the way it is setup allows for fraud between what is collected and what is paid to the BOE after the fact.

I would much rather avoid paying the FFL and just continue getting screwed by the IRS and pay them direct as I have every year. It should be up to me to claim an amount and pay what is owed or have the out of state dealers who actually sold the item do what is required if tax is due. Since they obviously arent required to collect tax the BOE was cleaver enough to target an FFL as easy prey and force them to do this which I think is wrong. Amazon fought this and is winning but a little hole in the wall FFL has no money to fight this so they just take it and so do we.

It just seems a few tax Nazis above are drawing their own conclusions about a larger picture which is hilarious. I still call the BS card and want to see a person who claimed every last little thing they ever purchased online and voluntarily paid sales tax on it. This wasnt the question asked by me but rather what my thread turned in to.

tenpercentfirearms
01-27-2012, 7:28 AM
I am not mad at the FFLs. I am mad at the situation and that they are being forced to do this. I am concerned that the way it is setup allows for fraud between what is collected and what is paid to the BOE after the fact.This is the interesting part. You were not concerned when you never paid your use tax and were cheating the system. Now that you can't do that, you are now concerned that someone else might be cheating the system, even though there is zero evidence that gun dealers are cheating the system. It has been laid out why it would be quite difficult and extremely risky for gun dealers to cheat the system, yet you still stick to your claim that there is this big area of "potential" abuse here.

In other words your concern has no merit and is quite contradictory.

I would much rather avoid paying the FFL and just continue getting screwed by the IRS and pay them direct as I have every year. It should be up to me to claim an amount and pay what is owed or have the out of state dealers who actually sold the item do what is required if tax is due. Since they obviously arent required to collect tax the BOE was cleaver enough to target an FFL as easy prey and force them to do this which I think is wrong. Amazon fought this and is winning but a little hole in the wall FFL has no money to fight this so they just take it and so do we. I don't think you understand the true issues here. First, the IRS is not collecting sales tax. It is the CA State Board of Equalization (BOE). Second, the BOE is claiming that when your retail firearms transaction comes through a retail firearms store in CA, the CA FFL is the final retailer of the firearm. As such, the CA FFL does not have a choice to collect or not collect tax. They must collect the sales tax.

It would be no different than you going to Walmart and telling them that even though their goods came from somewhere out of state, because they are selling it, they should just skip the sales tax and let you pay it at the end of the year. That sounds great in theory, but the BOE considers Walmart the final retailer and the BOE will want that sales tax from Walmart whether they collected it or not. You do understand that BOE Retail Permit holders are not required to collect sales tax from their customers, they are just required to pay the sales tax on the transaction. Whether I get reimbursed for the sales tax is up to me. I choose to get reimbursed by my customer (AKA you pay your sales tax because I don't want to pay it for you).

Where Amazon has a case is they are saying they are just an out of state agent that has some clients that sell inside CA. That does not make Amazon a California company selling items directly to CA from CA warehouses. The BOE (again, not IRS) is claiming that because some of Amazons agents are in CA, that makes Amazon a CA company and they should collect sales tax on any and all sales to CA.

If we were to apply your logic from the Amazon scenario to our situation, then the out of state dealer would have to collect CA sales tax anytime they sent a gun into one of their "CA FFL agents". Do you really want this to happen? If you think out of state FFLs don't like CFLC, guess what they would say about that? Oh not to mention it is against the constitution for CA to require out of state dealers to collect sales tax unless they have a business in CA.

It just seems a few tax Nazis above are drawing their own conclusions about a larger picture which is hilarious. I still call the BS card and want to see a person who claimed every last little thing they ever purchased online and voluntarily paid sales tax on it. This wasnt the question asked to me but rather what my thread turned in to.

Again you side step the issue. Your original concern was that FFLs are stealing money from the state by claiming your firearm purchase was something it was not. For some reason in your mind my collecting your sales tax on an out of state transfer and then stealing it is easier than just doing it for my in store transactions. However, there is no logical evidence it is easier, but quite the opposite. If I claim you gave me a receipt for your $1000 gun that was really $500, I would have to make that new receipt up and there would still be at least two copies showing I am lying in existence; one with you and one with the original seller. Both copies could easily be obtained by the BOE.

I have also brought up how anyone with a modern Point of Sale system cannot just erase transactions. They can be voided, but there are clear paper trails in order to keep employees from messing with the books. That same paper trail would make a BOE audit of one of these mythical tax stealing FFLs very easy.

Again I don't care if you pay your use tax or not. It isn't my concern. I am just wondering what your character is like. Are you the kind of guy who likes the to cheat the system (Quote: "If there is a way around all this please PM me some info"), but then gets upset when other people cheat the system (if that is even happening often or at all)?

For me? I am going to collect and remit sales tax on all retail transactions. I sleep just fine at night doing it as well. Anyone who wants to try and change that and fight the BOE, you are more than welcome to do it. Put your money where your mouth is and fight them on it. I have zero interest in fighting them on it because it is so easy for me to collect and remit it I would be wasting my hard earned money so other people could pay their taxes at their convenience. Even if it were my personal firearms, why get upset a dealer does my tax work for me and saves me from having to do it at the end of the year?

Sorry I would rather spend my money on litigation over unjust firearms laws in this state.

Munk
01-27-2012, 11:17 AM
I didslike that the BOE has put the onus of payment for use tax onto the FFL. I think it's wrong for them to put you in that position. It means that if an FFL doesn't have a relatively error-proof system for collection, they could be in hot water from a penalty standpoint.

I spent my own time looking into the BOE's memos on when an FFL has to pay, and if my local store doesn't automatically collect the tax on a transaction that needs such collection, I WILL remind him, because small businesses have a hard enough time hanging in there without having to pay penalties over a clerical error. My 200$ or more savings, while nice, isn't worth getting a store shut down. I'd probably lose that 200$ in gas money repeatedly driving to the next gunstore all the time. (seriously, a one way 20 mile extra trip amounts to 6$ in gas per trip, over the course of a year or so, i'll stop into a store enough time while buying ammo, components, targets, clays, cleaning supplies, and accessories to eat up that savings)

NytWolf
01-27-2012, 11:49 AM
Just pay it and shut up. Worry about things you can control. You did your part. It's up to the FFL to do theirs.

If it helps you feel better, know that eventually, you will/should receive a receipt. That's what counts and that's what will go in the record books. The FFL has the receipt to prove how much tax they will pay to BOE. Whether or not the FFL pays that amount to the BOE is none of your business. It is not up to you anyway.

You are overly concerned over nothing.

On your concern regarding the FFL writing a receipt for a lower amount, thus filing less taxes: that's why you will get a receipt. Duh! Sooner or later you will get one. If the amount doesn't match, ask about it. Duh! If you don't, it's your fault. But remember this: usually when something is ordered from the manufacturer, you pay MSRP. In the case of a firearm, the FFL acts as a mere middleman for the transfer. That's why there are distributors.

kemasa
01-27-2012, 1:09 PM
I didslike that the BOE has put the onus of payment for use tax onto the FFL. I think it's wrong for them to put you in that position. It means that if an FFL doesn't have a relatively error-proof system for collection, they could be in hot water from a penalty standpoint.

Actually, it is still considered "sales tax". It is really no different than any other business in which items go through the business, except in this case firearms have to go through a FFL.

The real problem is in how does the FFL really know what was paid. I would prefer to not have to collect sales tax on firearms which I did not actually sell. Also I don't care much for also having to collect sales tax on the shipping since I am acting as the agent for the buyer, but it is what it is. The voters can change things, not the FFLs.

As Wes said, it is amazing that some people try to bring up other issues, such as the FFL keeping the sales tax money, but don't have an issue with retail stores, especially when they pay cash. With a FFL, if you try to hide ALL of the paper trail, you would most likely end up in jail since there are many parties involved and many laws you would have to violate. A sandwich place can hide a sandwich sale with little effort, but a FFL can't hide a firearm transfer.