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Wildhawk66
05-10-2012, 9:14 AM
I am in northern California and I recently sold a rifle to a calgunner is southern California. The rifle was mailed to his FFL and he Drosd it as normal. However, the FFL, who is aware that I am a private party seller, is requesting a receipt so that he can collect tax on the sale price. He is stating that since I am not present at the transfer, it is not a PPT and therefor tax has to be collected (I realize my title may be wrong if he is correct about the PPT part of this).

I was under the impression that infrequent sales between private parties were not subject to the tax collection requirement even if the sale was conducted by mail. Am I wrong?

I would rather not provide a receipt as a private seller and I am sure the buyer would like to avoid paying taxes if it is not absolutely required. What is the law on this?

timdps
05-10-2012, 9:45 AM
The FFL is correct. Its not a PPT if both parties are not in the store.

Wildhawk66
05-10-2012, 10:49 AM
Ok, based on timdps's response and some additional digging, both the buyer and seller must be present for a transfer to be a PPT. Clearly my situation did not include a PPT.

That said, it is my understanding that the FFL must collect sales tax when receiving/transferring a firearm sent by a retailer that does not already collect CA sales tax. However, if the firearm is coming from a private party, the sale is considered an "occasional sale" and is not subject to the tax collection requirement. Can anyone familiar confirm this and provide a link to supporting documentation?

taloft
05-10-2012, 11:22 AM
Correction: Actually, it is a private party sale, since it is not a FTF transfer it isn't done as a PPT. However, the object is already in state. Use tax is only on items that are coming from out of state in cases where sales tax wasn't collected.

Use Tax Basics
California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state. Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state. For example, you would owe use tax when:

You purchase something from a mail order catalog, the Internet, an online auction, television shopping network, etc. located outside California and you don't pay tax to that retailer.
You withdraw taxable merchandise from your business's resale inventory and use it for your personal or business use.
You purchase vehicles, vessels, mobile homes, and aircraft from sellers who do not hold seller's permits.The source: CAL BOE (http://www.boe.ca.gov/taxprograms/usetax/index.html)

shy 7th
05-10-2012, 11:30 AM
I am interested in an answer to this question also.

In my mind I always thought of the PPT x-fer vs. FFL x-fer as simply a procedural difference. It doesn't change the fact that both the buyer and seller are private individuals (as opposed to a business and an individual).

tenpercentfirearms
05-10-2012, 11:40 AM
http://www.calguns.net/calgunforum/showthread.php?t=366781

Munk
05-10-2012, 12:30 PM
A private sale is not a PPT.

It's not a PPT, PPT is a specific transfer type between two CA residents that are Face to face in the same place.

This is just a transfer, and since it's a transfer, the transferring FFL can charge what they wish in fees for said transfer.

Since it's a transfer, the FFL must collect the taxes because he is delivering a transferred firearm (as noted in tenpercentfirearms's link to the lengthy discussion on the subject) according to the current mood-swing of the BOE.

lpspinner
05-10-2012, 12:32 PM
I am in the jail period of such a transfer right now. I am receiving a handgun from someone in Southern Ca and he sent it to my FFL here in the Bay Area. My FFL confirmed that since it was coming from a private individual in California, he does not have to collect sales tax. He said he spoke to someone at the Tax board and confirmed that.

taloft
05-10-2012, 8:58 PM
A private sale is not a PPT.

It's not a PPT, PPT is a specific transfer type between two CA residents that are Face to face in the same place.

This is just a transfer, and since it's a transfer, the transferring FFL can charge what they wish in fees for said transfer.

Since it's a transfer, the FFL must collect the taxes because he is delivering a transferred firearm (as noted in tenpercentfirearms's link to the lengthy discussion on the subject) according to the current mood-swing of the BOE.I agree, using PPT to denote a sale between two private parties is a terrible habit of mine. I know better. I'll amend my first post to avoid confusion.:o

I still say that in this case, he doesn't owe use tax. Nothing I've read on the BOE website or the other thread makes me think otherwise.

huntercf
05-10-2012, 9:54 PM
Send him a receipt for $1 and include $0.08 for the tax.

Wildhawk66
05-11-2012, 7:46 AM
Looks like the consensus is that this is an "infrequent sale" between private parties and as such the FFL does not need to collect tax. The buyer will be directing the FFL to this thread in the hopes of getting things straightened out. Thank you for the help.