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  #1  
Old 12-06-2012, 3:55 PM
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Default True value of transferred firearm?

What are our obligations in use tax collection in regard to ascertaining value of a transfer? We received an interstate shipment of a firearm that is worth more than $2000. The letter included with the firearm states that the buyer purchased it for $500. Would you guys accept the sale valuation in the letter, even though it's very low and may be a misrepresentation of the price to avoid tax? Would you use the true market value of the firearm to determine the tax? What say you? What would the BOE require us to do?
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Old 12-07-2012, 7:55 AM
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Originally Posted by EBR Works View Post
What are our obligations in use tax collection in regard to ascertaining value of a transfer? We received an interstate shipment of a firearm that is worth more than $2000. The letter included with the firearm states that the buyer purchased it for $500. Would you guys accept the sale valuation in the letter, even though it's very low and may be a misrepresentation of the price to avoid tax? Would you use the true market value of the firearm to determine the tax? What say you? What would the BOE require us to do?
I use what is documented. Even if it seems "low". Here are some reasons I could list:
- I don't know what the deal was between the two.
- Maybe the seller didn't know the true value of the gun
- the buyer was REALLY good at negotiating
- Maybe the gun has a flaw not visible to me
- Could also be the seller was desperate and needed cash and this was the first offer
- Could be an auction that started at .01 that he really thought would get to 2-3k and it just didn't happen
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  #3  
Old 12-07-2012, 9:01 AM
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I go with what they document. It's their (potential) lie and if BOE wants to follow up, I figure the customer will be on the hook. I transferred an HK MR762 that the guy claimed was a gift from his brother in law that was also an FFL. I have a letter on file on the FFL's letterhead stating it. What more can you do?
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Old 12-07-2012, 11:15 AM
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OK guys, thanks!
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Old 12-07-2012, 2:03 PM
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I would not accept the letter based on my discussions with the BOE. I was told, due to a conversation with a bogus receipt, was that even if I did not think that the receipt was bogus, I was still responsible for the proper sales tax amount and if the BOE happened to discover that the receipt was incorrect and that I had no idea that it was not correct, I, as the business, would still owe the money.

This, to me, makes it not worth the risk when it appears that the receipt is bogus. Call the BOE and ask about this issue and see if you want to accept it.
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Old 12-07-2012, 2:05 PM
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Quote:
Originally Posted by kemasa View Post
I would not accept the letter based on my discussions with the BOE. I was told, due to a conversation with a bogus receipt, was that even if I did not think that the receipt was bogus, I was still responsible for the proper sales tax amount and if the BOE happened to discover that the receipt was incorrect and that I had no idea that it was not correct, I, as the business, would still owe the money.

This, to me, makes it not worth the risk when it appears that the receipt is bogus. Call the BOE and ask about this issue and see if you want to accept it.
For a used gun. Is the Kelly Blue Book a factor?

I would assume calling the tax guys would get the most egregious determination, CODIFIED or not.
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Old 12-07-2012, 2:40 PM
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Originally Posted by paul0660 View Post
For a used gun. Is the Kelly Blue Book a factor?
It might be a factor, but I doubt that the BOE would care about that if they can prove that a higher amount was paid for the firearm.

Quote:
I would assume calling the tax guys would get the most egregious determination, CODIFIED or not.
Well, it depends. In the case I called about, the BOE really didn't seem to care to try to do anything about it, other than telling me that I would be responsible for the correct amount of sales tax. They would not go after the out of state FFL (in my case) and would not go after the CA customer. This is why I would not put myself at risk. It is bad enough when you don't know the receipt is bogus, so why take a chance when you know it is bogus.

The BOE might never find out (except if they happen to read a public forum like this), but is it worth the risk just the same?
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  #8  
Old 12-07-2012, 4:11 PM
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I go by the sale price and I ask for a priced invoice to be sent with the FFL and firearm. But, like with the DMV if you buy a 2 year old Cadilac CTS for $500 they will question it and assess their own value tax that you will then have to pay. I, for one, will not pay someone elses tax. So if it is a new $2000 firearm they say they paid $500 for I ask a few questions and if it came from GunBroker or online site I can trace it to I will charge tax on the sale/sold price. Remember, the buyer will not be asked to cough up the difference in tax accessed, you will be held liable for and any penalties.
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