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TripleT
03-07-2012, 11:38 AM
I've got a customer that bought an expensive rifle, while he was visitng another state. He then had the rifle sent to me for transfer. The rifle came from an out of state FFL. He says he paid sales tax at the time of purchase and can produce a receipt proving it was paid. I told him it didn't matter that the CA BOE insists I collect CA sales tax and there is not a way around that and he should get reimbursed from the seller for the sales tax paid in the incorrect jurisdiction.

Next conversation was he talked to the CA BOE and the only tax owed would be the difference between what he paid to the out of state dealer and the rate CA local tax rate, if any. I asked him to produce a letter from the BOE and I'll abide by their ruling.

Anybody heard of anything remotely relevant ?

mej16489
03-07-2012, 12:36 PM
I've got a customer that bought an expensive rifle, while he was visitng another state. He then had the rifle sent to me for transfer. The rifle came from an out of state FFL. He says he paid sales tax at the time of purchase and can produce a receipt proving it was paid. I told him it didn't matter that the CA BOE insists I collect CA sales tax and there is not a way around that and he should get reimbursed from the seller for the sales tax paid in the incorrect jurisdiction.

Next conversation was he talked to the CA BOE and the only tax owed would be the difference between what he paid to the out of state dealer and the rate CA local tax rate, if any. I asked him to produce a letter from the BOE and I'll abide by their ruling.

Anybody heard of anything remotely relevant ?


Not an FFL.

What he's describing certainly falls perfectly inline with the BOE stance on paying use-tax.

halifax
03-07-2012, 12:55 PM
This is the response I got from the BOE when I had the same issue:

http://www.calguns.net/calgunforum/showpost.php?p=7927637&postcount=108

Lives_In_Fresno
03-07-2012, 1:22 PM
Pub 112 of the BOE includes this:

Can I get credit for paying another state’s tax on my purchase?
If you were required to pay, and did pay, another state’s sales or use tax on your purchase, you may be
able to take a credit against the California use tax due. For information, please see your tax return instruc-
tions or call our Taxpayer Information Section at the number listed above.

See: http://www.boe.ca.gov/pdf/pub112.pdf

EBR Works
03-07-2012, 1:24 PM
We had the same situation. After we spoke to the seller who collected tax, he called his state's tax collection entity and was told to refund the tax to the buyer, which he did.

TripleT
03-07-2012, 1:51 PM
Problem solved (at least for me) XYZ shop across town tells my customer I am interpreting the law incorrectly and they would only charge the difference (if any) in sales tax. CFLC and delivery to XYZ complete = no longer my problem. :)

halifax
03-07-2012, 2:18 PM
Pub 112 of the BOE includes this:

Can I get credit for paying another state’s tax on my purchase?
If you were required to pay, and did pay, another state’s sales or use tax on your purchase, you may be
able to take a credit against the California use tax due. For information, please see your tax return instruc-
tions or call our Taxpayer Information Section at the number listed above.

See: http://www.boe.ca.gov/pdf/pub112.pdf

This sounds like it would apply to the end user's use tax if they took possession of the goods out-of-state. It does not sound like it would apply to the CA dealer who is the one RESPONSIBLE for paying the CA Sales Tax.

Munk
03-07-2012, 3:16 PM
Problem solved (at least for me) XYZ shop across town tells my customer I am interpreting the law incorrectly and they would only charge the difference (if any) in sales tax. CFLC and delivery to XYZ complete = no longer my problem. :)

Customer only pays the CA tax on the saleprice+Shipping on the gun.

As the other poster stated, the customer should get a refund from the out-of-state seller for the amount he paid them, because he should NOT have paid tax to that seller.

If you were to run into this again, I'm pretty sure you just ignore their tax paid, and charge them CA taxes on the Sale Price + Shipping. Let them sort out their own out-of-state tax mistake.

Remember; as an FFL, YOU are the one responsible for paying the taxes on the customer's transfer, you just have the added benefit of being able to pass the bill on to the customer for it.

TripleT
03-07-2012, 3:33 PM
Well I am no longer the transfer FFL so as I said, not my problem. XYZ can deal with the BOE, if they ever get audited. I'm beyond fighting with customers about this stuff. If they order a firearm and don't want to pay the sales tax, there is always another FFL that will help them circumvent the law.

Munk
03-07-2012, 9:16 PM
Well I am no longer the transfer FFL so as I said, not my problem. XYZ can deal with the BOE, if they ever get audited. I'm beyond fighting with customers about this stuff. If they order a firearm and don't want to pay the sales tax, there is always another FFL that will help them circumvent the law.

They aren't circumventing anything. They're just ignoring the BOE, which means the FFL will be on the hook to pay... with penalties (This IS California after all).

gschoelles
03-08-2012, 6:46 AM
IMHO you report the sales dollars and pay the taxes on those sales dollars, not the sales value. So in its simplest form, you collect sales tax on the taxable dollars you have received.

tenpercentfirearms
03-08-2012, 6:59 AM
IMHO you report the sales dollars and pay the taxes on those sales dollars, not the sales value. So in its simplest form, you collect sales tax on the taxable dollars you have received.

And your opinion is not what the law nor the BOE says. Sorry. You need to read this.

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

gschoelles
03-08-2012, 7:09 AM
This is how you read it but realistically the difference will go unreported and will end up pocketed in the long run.

And your opinion is not what the law nor the BOE says. Sorry. You need to read this.

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



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halifax
03-08-2012, 7:17 AM
This is how you read it but realistically the difference will go unreported and will end up pocketed in the long run.


Being that this is the FFL's Forum, can we assume you are an FFL with experience illegally "pocketing" sales tax revenue?

gschoelles
03-08-2012, 7:38 AM
Excuse me? Someone needs to take his pills and try getting up on the other side of its bed.

Being that this is the FFL's Forum, can we assume you are an FFL with experience illegally "pocketing" sales tax revenue?



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TripleT
03-08-2012, 8:00 AM
Excuse me? Someone needs to take his pills and try getting up on the other side of its bed.


No, somebody that is an FFL that promotes assisting buyers in avoiding sales tax and thereby incurring liability for the tax, interest and penalties is irresponsible.

If your not an FFL, then why are you offering a legal opinion, in the FFL forum, where your advice is clearly outside all code and correspondence from the BOE ?

gschoelles
03-08-2012, 8:12 AM
No, somebody that is an FFL that promotes assisting buyers in avoiding sales tax and thereby incurring liability for the tax, interest and penalties is irresponsible.

If your not an FFL, then why are you offering a legal opinion, in the FFL forum, where your advice is clearly outside all code and correspondence from the BOE ?

Did not say I was not an ffl, that is your assumption and I offered no advice. Are you feeling guilty?

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TripleT
03-08-2012, 8:46 AM
Did not say I was not an ffl, that is your assumption and I offered no advice. Are you feeling guilty?

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Ok, well thank you for all your worthwhile input on the subject...

tenpercentfirearms
03-08-2012, 8:57 AM
This is how you read it but realistically the difference will go unreported and will end up pocketed in the long run.

Care to back that up with any sort of evidence? I would accept personal experience, newspaper articles, BOE reports, or really anything that suggests that FFLs are not remitting the sales tax they are collecting.

I have already explained ad nausem how it would be extremely foolish for me to put the sales tax on my receipts and then go back and have to exchange your items and pocket the difference. Modern POS systems do not allow you to just delete transactions. Everything is tracked to keep your employees from ripping you off. And by the same vein the BOE will have no problem figuring out in an audit that this was going on.

I just made my sales tax pre-payment late. Yeah I forgot again. It cost $240 for a late payment! CUSS! Now just imagine what they would do if I had been stealing sales tax. Penalties, fines, and interest plus possible jail time. Oh that is definitely worth the few bucks I would make.

And there is that whole integrity thing.

Either way, way to troll. Your mother must be proud.

kemasa
03-08-2012, 9:19 AM
One issue to consider in this case is that you might not want to ship a firearm to another CA FFL since it could be claimed that it came from you, even though you got it from someone else, so that you would be the one still responsible for the sales tax.

For example, in the case of a CA FFL selling a firearm to a customer and then having it shipped to a CA transfer FFL, the seller is responsible for collecting sales tax on the transfer fee of the other FFL.

Personally, I would do what is right OR ship it back to the original sender.

gschoelles
03-08-2012, 9:28 AM
One issue to consider in this case is that you might not want to ship a firearm to another CA FFL since it could be claimed that it came from you, even though you got it from someone else, so that you would be the one still responsible for the sales tax.

For example, in the case of a CA FFL selling a firearm to a customer and then having it shipped to a CA transfer FFL, the seller is responsible for collecting sales tax on the transfer fee of the other FFL.

Personally, I would do what is right OR ship it back to the original sender.

Another issue is that many states have sales tax reciprocity set up with CA BOE. So when they charge sales tax they are rightly doing so and you would need to address this as well rather than assuming they were in the wrong.

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kemasa
03-08-2012, 10:16 AM
It would need to say that CA sales tax was collected, then the seller would also be responsible for collecting the sales tax on the transfer fees.

gschoelles
03-08-2012, 10:57 AM
It would need to say that CA sales tax was collected, then the seller would also be responsible for collecting the sales tax on the transfer fees.

My invoices break-out sales taxes by city county and state and would recommend others do the same.

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tenpercentfirearms
03-08-2012, 7:16 PM
My invoices break-out sales taxes by city county and state and would recommend others do the same.

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Could you be more clear what you mean by this? Your line item on your invoice says which city, county, and state the customer was charged from?

I only have one shop location so it would seem pretty obvious that I am charging them sales tax from the address on the receipt. However, I could see where if I did gun shows or had multiple shipping locations this would come in handy.

Or did you mean you put the city rate, the county rate, and the state rate? So for me it is like .25%, 1%, 6%? Yeah that is redundant and unnecessary.

Help me understand more what you meant by that?

gschoelles
03-08-2012, 8:06 PM
I do business in 4 counties and numerous cities and occasionally out of state. Further, I deal with at least six different tax rates that all need to be reported. My company's uses Peachtree accounting which handles this well and prints it on each invoice mostly for my benefit and sometimes helps the customer. If you get th email updates from BOE, you see all the different rates that have to be felt with by city.

Hope that helps.

Could you be more clear what you mean by this? Your line item on your invoice says which city, county, and state the customer was charged from?

I only have one shop location so it would seem pretty obvious that I am charging them sales tax from the address on the receipt. However, I could see where if I did gun shows or had multiple shipping locations this would come in handy.

Or did you mean you put the city rate, the county rate, and the state rate? So for me it is like .25%, 1%, 6%? Yeah that is redundant and unnecessary.

Help me understand more what you meant by that?



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tenpercentfirearms
03-09-2012, 7:33 AM
I do business in 4 counties and numerous cities and occasionally out of state. Further, I deal with at least six different tax rates that all need to be reported. My company's uses Peachtree accounting which handles this well and prints it on each invoice mostly for my benefit and sometimes helps the customer. If you get th email updates from BOE, you see all the different rates that have to be felt with by city.

That makes perfect sense and I figured that might be your scenario.

So if you are a BOE retailer and think realistically that the tax money goes into someone's pocket, why are you asking someone else if they feel guilty? ARE YOU FEELING GUILTY? :43:

gschoelles
03-09-2012, 8:24 AM
That makes perfect sense and I figured that might be your scenario.

So if you are a BOE retailer and think realistically that the tax money goes into someone's pocket, why are you asking someone else if they feel guilty? ARE YOU FEELING GUILTY? :43:

I don't handle transfers in my business and don't need to mess with the scenario, but I'm not blind to what happens around me.

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tenpercentfirearms
03-10-2012, 7:15 AM
I don't handle transfers in my business and don't need to mess with the scenario, but I'm not blind to what happens around me.

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Irregardless, how do I know that your business is not pocketing the sales tax I pay you for the goods you sell me? Why are gun dealers pocketing the sales tax and you aren't? Or really any other business for that matter? How do I know Walmart is really paying the BOE and isn't cancelling my receipt and keeping the sales tax? :rolleyes:

kemasa
03-10-2012, 10:15 AM
In other words he has nothing to base it on, ignores all the paperwork which would make it difficult to avoid paying sales tax, ignores that almost all other businesses could not pay sales tax much easier than a FFL, but his is sticking to his claims and facts are not going to change his opinion.

With respect to Walmart, I have heard that they are charging sales tax on coupons, so that could keep that any no one would know.

halifax
03-10-2012, 11:31 AM
Don't most businesses only deduct the coupon value after the sales tax has been applied to the retail cost? Or, are you saying Walmart does it different?

kemasa
03-10-2012, 11:58 AM
The sales tax varies by state, as well as the type of discount (who is the coupon from?). A friend from PA told me about a story in which Walmart was doing it differently and they should not have been collecting sales tax.