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-   -   Sales tax for Out of state purchase? YES - FFL must collect, buyer must pay (https://www.calguns.net/calgunforum/showthread.php?t=541404)

MrBAD 02-27-2012 10:24 PM

Sales tax for Out of state purchase? YES - FFL must collect, buyer must pay
 
So I bought a gun from an online store out of state. I went to Dros it at my local gun store and they told me I had to pay tax on the gun. I was under the assumption that I did not have to pay sales tax. Also, why would I have to pay sales tax to my FFL if I did not buy the gun from them. I thought only the transfer fee and background was what I needed to pay them. Does anyone know?
It's actually USE TAX.
// Librarian

TheBest 02-27-2012 10:29 PM

Search, this has been extensively explained, even in this sticky:

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

Santa Cruz Armory 02-27-2012 10:47 PM

Believe me. I don't like collecting it any more than you like paying it. I feel just as you said OP. The sale is between you and the seller.

CA BOE/DOJ is forcing dealers to be the bad guys by acting as the tax man and I don't like it at all. But until a dealer/ retailer much bigger that us has a dog in the fight I think we're all hosed.

Paperchasin 02-28-2012 1:12 PM

How does the FFL determine the amount to tax? I guess there's an invoice or something if you purchased it from an out-of-state Retail gun shop, but what if you purchased the gun USED from a Private Seller, i.e. GunBroker? Is the FFL supposed to somehow determine the value based on street prices?

TheBest 02-28-2012 1:16 PM

As stated from my post, stickied,
Quote:

So if a person buys a gun from a private party on Gun Broker, then no SALES TAX should be collected. However, online auctions won from a retailer, SALES TAX must be paid.

Paperchasin 02-28-2012 4:16 PM

Quote:

Originally Posted by TheBest (Post 8124927)
As stated from my post, stickied,

Thank you :)

holiday 02-29-2012 2:49 PM

so what are the penalties for the FFL who does not collect the tax from an out of state purchase? i am assuming they can lose their license, so i can understand why they would not want to take that chance. pretty chicken shizzit if you ask me on the state of cali to force them to collect.

DVSmith 02-29-2012 2:52 PM

Quote:

Originally Posted by holiday (Post 8132502)
so what are the penalties for the FFL who does not collect the tax from an out of state purchase? i am assuming they can lose their license, so i can understand why they would not want to take that chance. pretty chicken shizzit if you ask me on the state of cali to force them to collect.

They are responsible to the state for the uncollected tax as well as any interest and penalties applied. They could lose their resale certificate prohibiting them from purchasing goods for resale without paying sales tax themselves.

STAGE 2 03-01-2012 9:25 AM

Quote:

Originally Posted by TheBest (Post 8124927)
As stated from my post, stickied,

Just got off the phone with DAS in solana beach and they claim that they must collect tax on out of state purchases from private parties as well as from dealers. They also stated that they have a letter from the BOE that states this. Thoughts?

holiday 03-01-2012 10:19 AM

i would like to see that in writing...where the dealer is to collect on private party sales...because i thought that they did not have to collect for private party transactions. i have even been told by my ffl that private party transfers do not apply for the taxes...hmmm.

edit...nm...its all in the sticky

TheBest 03-01-2012 10:27 AM

Quote:

Originally Posted by STAGE 2 (Post 8137359)
Just got off the phone with DAS in solana beach and they claim that they must collect tax on out of state purchases from private parties as well as from dealers. They also stated that they have a letter from the BOE that states this. Thoughts?

Tell them to produce the letter. Take a photo of it and post it here.

ke6guj 03-01-2012 1:21 PM

Quote:

Originally Posted by TheBest (Post 8137788)
Tell them to produce the letter. Take a photo of it and post it here.

read it for yourself,
http://www.calguns.net/calgunforum/s...d.php?t=534146

http://www.calguns.net/calgunforum/a...2&d=1328917333

Paperchasin 03-01-2012 6:57 PM

Can someone clarify the bolded part of this excerpt:

"On the other hand, in situations where a California FFL dealer completes the registration paperwork for a California private party that is selling a firearm to another California private party and the seller and purchaser agree to the sale of the firearm without any assistance from a California FFL dealer (i.e., the California FFL dealer simply registers the firearm without taking title to it at any time) the California FFL dealer would not be considered the retailer and would not be responsible for the tax.

Does this mean that when an out-of-state seller ships the gun to CA thru his FFL, that what technically happens is the out-of-state FFL transfers the title to himself, then transfers it to the receiving FFL in CA, and then to the end buyer? Is this why we are subject to sales tax? I was under the impression that the FFLs were indeed simply acting as middlemen to register/transfer the firearm, nothing more.

And for those people that are saying that buying from an Out-of-state private party pays no sales tax, this excerpt seems to contradict that:
"when a California FFL dealer completes the registration paperwork and delivers a firearm to a California purchaser for an out-of-state private party seller or an out-of-state retailer not registered with the BOE as a retailer engaged in business in this state, it is presumed that the California FFL dealer is the retailer of the firearm. This is due to the fact that by operation of law, only the California FFL dealer possessing the firearm has power to cause title to the property to transfer to the purchaser. Thus, the California FFL dealer owes sales tax on the total amount of the sales price of the gun, including their service charge, but excluding the Dealer’s Record of Sale (DROS) fee. The California firearm dealer should generally obtain a copy of the sales invoice from the seller or purchaser to determine the proper amount of tax due."

swifty 03-01-2012 11:11 PM

Quote:

Originally Posted by holiday (Post 8132502)
so what are the penalties for the FFL who does not collect the tax from an out of state purchase?

There is no penalty. The way the law is written, a retailer is required to pay the tax, the law also allows the retailer to be "reimbursed" for the money and collect it from the consumer.

~~~

Ever see the OSH advertisements, "We Pay The Sales Tax".

tpc13 03-02-2012 4:00 PM

Doesn't it seem weird that u buy a gun in another state and have it shipped to Ca that the state u buy the gun in should get the taxes. Bet it does not work in reverse. Hmmm only is this state wonder why so many are leaving this state.

tenpercentfirearms 03-17-2012 7:57 AM

Quote:

Originally Posted by tpc13 (Post 8146386)
Doesn't it seem weird that u buy a gun in another state and have it shipped to Ca that the state u buy the gun in should get the taxes. Bet it does not work in reverse. Hmmm only is this state wonder why so many are leaving this state.

No, that is not the way sales tax works. You are not supposed to collect sales tax on any transactions shipped to another state. That is a federal rule. The idea behind sales tax is the state the items is being used in gets the sales tax.

Spoilerv2 03-17-2012 12:53 PM

To add salt to the wound, an FFL I transferred some lowers through charged me tax on shipping.:mad:

Darklyte27 03-17-2012 4:03 PM

ya, show them a receipt, tax should be collected on the price of the items not shipping.
A FFL I used either charged tax on the shipping, rounded 545 to 550 or something.
although I was getting 2 firearms, where 25$ was added to the 75$ dros and fee for a total of 100$ including dros i didnt want to make a big stink over 5$

Librarian 04-20-2012 6:49 PM

Quote:

Originally Posted by r3captain (Post 8442564)
Sorry if this is the wrong forum for this.
Am I to understand that if I sell off my collection of more than 2 firearms with individual PPT transfers, the transfering FFL will have to collect sales tax?

Quote:

Originally Posted by jpm804 (Post 8442922)
No sales tax is collected for ppt's...

The tax thing is ONLY for transfers from out of state into CA - and those are NOT CA PPTs, as implemented.

Quote:

Originally Posted by r3captain (Post 8443041)
I've been told by my local shop, and from some of the posts here, that I'm only allowed to make 2 transfers a year and then sales tax needs to be added.????

No, the number is 5 transactions, any number of handguns in one transaction, and it's very loosely enforced - the point, from the states view, is to prevent folks acting like dealers, making their livings buying and selling firearms, without the CA license to do that.

Quote:

Originally Posted by hcbr (Post 8443070)
Doesn't matter of how many transfers you have, they're going to collect sales tax on any gun out of state period.

Quote:

Originally Posted by r3captain (Post 8443175)
I'm talking about FTF PPT transfers of my personal collection!


r3captain 04-20-2012 7:10 PM

Thanks Librarian, very helpful as always!

zdragon 04-20-2012 7:28 PM

Quote:

Originally Posted by tpc13 (Post 8146386)
Doesn't it seem weird that u buy a gun in another state and have it shipped to Ca that the state u buy the gun in should get the taxes. Bet it does not work in reverse. Hmmm only is this state wonder why so many are leaving this state.

in another word Cali is ripping off other States.

Librarian 04-20-2012 7:51 PM

Quote:

Originally Posted by zdragon (Post 8443492)
in another word Cali is ripping off other States.

No; as has been pointed out repeatedly, California requires a 'use tax' to be submitted for out of state purchases which would have incurred state sales tax if made within CA. It's been that way for many years.

Nutnspecial 04-20-2012 9:01 PM

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

Wow....read that.

Librarian 04-20-2012 9:26 PM

Quote:

Originally Posted by Nutnspecial (Post 8444109)

... as linked in post #2, above.

Tortuga Rick 04-25-2012 10:43 PM

What if sales tax was collected by the out of state shop that you bought from, And it's written down on the receipt from them ? You pay twice,, B.S.

tenpercentfirearms 04-26-2012 9:43 AM

Quote:

Originally Posted by Tortuga Rick (Post 8471288)
What if sales tax was collected by the out of state shop that you bought from, And it's written down on the receipt from them ? You pay twice,, B.S.

No, you tell the out of state shop since the item was not delievered in their state, then they cannot collect sales tax and they should adjust your sales receipt and issue a refund.

Bravo_1 05-02-2012 2:58 PM

Going thru the same thing now.
I bought a used pistol from a private seller from out of state.
My ffl is charging me the ff:

Tax based on full price of the pistol & shipping
Dros fee
Dealer transfer fee
In total i paid 110 In fees for a used $500 pistol.

MASTERLAB 05-02-2012 11:02 PM

I was gonna rant on this last week when I started the paperwork for my shotgun, it was really annoying, I hate CA laws

Farrier-1 05-03-2012 7:56 AM

I was too pretty shocked when I had to pay tax on a new Kimber .45 I bought out of state. Wasn't prepared for the extra $120.

holiday 05-15-2012 3:01 PM

so are all ffl's in cali (sac area) now on board with this sales tax collecting on out of state purchases? does the ffl get audited for this? really would like to know how the state keeps track of all these sales and who, and who should not, be taxed...errrrrr!

KimberUSA 06-17-2012 11:47 AM

@TheBest. Thanks for the link

aim2shu 06-20-2012 8:37 AM

Quote:

Originally Posted by zdragon (Post 8443492)
in another word Cali is ripping off the people.

fixed I think :confused:

Apec 06-20-2012 9:35 AM

Quote:

The use tax is intended to protect California sellers who otherwise would be at a competitive disadvantage when out-of-state sellers make sales of goods to California customers without charging tax. The use tax also assures that all consumers in the state contribute fairly to the funding of state and local programs whether they choose to make purchases in California or outside the state.

It's funny. I read the BOE's website and they say the tax is purported to level the playing field for in-state businesses against out-of-state ones. However, FFLs already charge a fee for this reason, whereas the tax is not necessarily going into programs that directly benefit businesses at an "unfair disadvantage."

When total OTD fees are lower, FFLs see a higher volume of transfers, though that doesn't preclude them from profiting off what ammo and guns they do sell. There are plenty of people who don't do the online guns business and still shop local.

The BOE is really just prolonging deadweight loss by discouraging people from buying out-of-state guns, let alone going to their LGS if their LGS doesn't happen to carry what they want.

If anything, they should just tax the transfer fee, not the value of the goods.

aim2shu 06-21-2012 3:59 PM

ok so my fix is some what correct :confused: :leaving:

vector16 09-08-2012 2:34 PM

lesson to be told, buy the guns out of state, out of state. take delivery out of state, don't [ay tax. Simple.

ke6guj 09-08-2012 2:39 PM

Quote:

Originally Posted by vector16 (Post 9289724)
lesson to be told, buy the guns out of state, out of state. take delivery out of state, don't [ay tax. Simple.

And if you are a CA-resident, how do you legally do that (other than 03FFLs buying C&R firearms)?

Librarian 09-08-2012 3:02 PM

Quote:

Originally Posted by vector16 (Post 9289724)
lesson to be told, buy the guns out of state, out of state. take delivery out of state, don't [ay tax. Simple.

You need to read one of the other stickies in this forum -- http://www.calguns.net/calgunforum/s...d.php?t=503873

Your solution is a simple Federal felony, unless the buyer has an FFL.

darkwater 09-20-2012 9:51 AM

Quote:

Originally Posted by tenpercentfirearms (Post 8473078)
No, you tell the out of state shop since the item was not delievered in their state, then they cannot collect sales tax and they should adjust your sales receipt and issue a refund.

Well, now that the "Amazon" bill has gone into effect as of 9/15/12, I wonder if any large out-of-state firearm dealers will have to start collecting CA sales tax? I'd have to look at the details of the law, as there could be exceptions for some retailers based on their particular circumstances.

http://articles.latimes.com/2012/sep...s-tax-20120915

Update: Looks like the Amazon law affects those companies big enough to have affiliates that advertise for them on in-state websites, which the BOE said created business nexus, similar to being in the state physically. I kind of doubt places like Bud's Gun Shop, Impact Guns or Grabagun have that kind of affiliate network in CA (though Grabagun advertises here), or they may have terminated any such relationships by now to avoid having to collect the tax.

http://www.boe.ca.gov/members/msteel...Amazon_tax.pdf

Dhena81 09-20-2012 10:18 AM

It really makes me mad to have to pay all these taxes. Federal 30% CA 9.8% and 8.75% sales tax on the remaining 60% of my money. Then we pay around 30 cents more a gallon of gas then basically all the other states. Ca goes through roughly 16 billion gallons of gas a year and generates 50 cents a gallon so they make 8 billion just on gas tax. Internet sales tax is small potatoes at an estimated 360 million a year that will be generated.

Apec 09-22-2012 12:51 PM

Quote:

Originally Posted by Librarian (Post 9289850)
You need to read one of the other stickies in this forum -- http://www.calguns.net/calgunforum/s...d.php?t=503873

Your solution is a simple Federal felony, unless the buyer has an FFL.

It should be possible for dual residents to do that without an FFL, if the deal happens in one of their residency states. But for CA-only residents, it would be problematic.


Quote:

Originally Posted by Dhena81 (Post 9363182)
It really makes me mad to have to pay all these taxes. Federal 30% CA 9.8% and 8.75% sales tax on the remaining 60% of my money. Then we pay around 30 cents more a gallon of gas then basically all the other states. Ca goes through roughly 16 billion gallons of gas a year and generates 50 cents a gallon so they make 8 billion just on gas tax. Internet sales tax is small potatoes at an estimated 360 million a year that will be generated.


Yep. For transfer guns, we have to pay DROS and transfer fees. Tax on top of that...lol, it's effectively being taxed twice.


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