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Old 08-29-2011, 2:22 PM
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tenpercentfirearms tenpercentfirearms is offline
Join Date: Apr 2005
Location: Taft, CA
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Originally Posted by bombadillo View Post
So if I buy a used gun from a retail shop and it was transferred to a local dealer, but from a dealer, am I supposed to be paying sales tax on it or how would that work. Can I pay it as a use tax at the end of the year or should it be upfront to the FFL?
This is kind of confusing. Anytime you buy tangible personal property from a retail store in CA, the retailer is responsible for paying sales tax. So in your above scenario, if you bought a firearm from a CA dealer and had it transfered to another CA dealer, the original gun shop should pay the sales tax. Whether the gun is new or used means nothing. Only that the firearm was sold by a retailer.

If you bought the firearm from a retailer out of state, then the CA gun shop receiving the firearm must pay sales tax on the purchase price of the firearm and the transfer fee. Not all dealers collect the sales tax from their customers. A FFL does not have to collect the tax; however, the FFL must pay the tax. So if a dealer gets audited and did not pay the tax, they are going to have to pay some hefty fines and back taxes.

I choose to collect the sales tax since I have to pay it. I don't enjoy paying other people's taxes for them, though some dealers might.

If you did not pay the sales tax to a dealer, then in theory you should pay the Use Tax at the end of the year. However, you would have a solid argument that you were not liable for the Use Tax as the FFL was the retailer and they should pay the Sales Tax for you as the retailer of the firearm. So if the BOE audits a gun shop and then goes to the customer and asks if you paid the Use Tax, the proper answer is "No and I don't have to. The retailer is responsible for paying sales tax on that CA retail transaction, not me." If the BOE claimed it didn't get paid, remind them the retailer is responsible for collecting and paying Sales Tax, not the consumer. Any Sales Tax the dealer failed to collect is the dealer's fault as they still owe the Sales Tax.

And that there dealers is why you would be foolish not to collect and pay sales tax on retail firearms transactions.
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Last edited by tenpercentfirearms; 03-23-2012 at 6:56 AM..
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