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  #1  
Old 06-29-2023, 7:22 PM
bjjgrappler bjjgrappler is offline
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Question fees and sales taxes on ppt

Hello,

I understand the DROS fees to the State and to the shop.

When doing an in person PPT with both parties at the shop is the buyer forced to pay sales tax?

thanks in advance

Last edited by bjjgrappler; 06-29-2023 at 7:23 PM.. Reason: extra word
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  #2  
Old 06-29-2023, 7:23 PM
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  #3  
Old 06-29-2023, 7:34 PM
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Negative
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  #4  
Old 06-29-2023, 9:21 PM
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Some shops will nickel and dime you like that, they program their cash register/POS that way. Its extra profit for them and it adds up.
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  #5  
Old 06-29-2023, 9:24 PM
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If they charge sales tax and don?t send on the $$ to .gov, is it fraud?
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  #6  
Old 06-29-2023, 9:54 PM
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Yes, feel free to send a copy of your receipt to the tax weenies.
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Old 06-30-2023, 10:53 AM
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thank you all.

I appreciate it!
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  #8  
Old 07-01-2023, 11:30 AM
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If the dealer is AT ALL involved in the transaction (money exchange) is responsible for collecting tax.
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  #9  
Old 11-09-2023, 2:56 PM
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Quote:
Originally Posted by Tyke8319 View Post
If the dealer is AT ALL involved in the transaction (money exchange) is responsible for collecting tax.
This is 100% false info. FFL dealers are ALWAYS involved in a firearm or ammo transfer, but PPT by law are exempt from sales tax. The FFL must charge sales tax if an item was purchased outside of Calif and sent to a Calif FFL, then transfered to an individual. However, if an item was purchased in Calif with the sales tax originally paid in Calif, its taken out of Calif and reimported back to Calif with proof of the original purchase, it is tax exempt.

I'm having an argument with a gun range in south OC who wants to charge me tax for a PPT gun on consignment and I'm not on board with them double dipping. The DOJ law is clear, PPT transfers are exempt from sales tax, period. Anyone have a proof to the contrary ?
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  #10  
Old 11-09-2023, 3:12 PM
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Quote:
Originally Posted by OCGunFan View Post
This is 100% false info. FFL dealers are ALWAYS involved in a firearm or ammo transfer, but PPT by law are exempt from sales tax. The FFL must charge sales tax if an item was purchased outside of Calif and sent to a Calif FFL, then transfered to an individual. However, if an item was purchased in Calif with the sales tax originally paid in Calif, its taken out of Calif and reimported back to Calif with proof of the original purchase, it is tax exempt.

I'm having an argument with a gun range in south OC who wants to charge me tax for a PPT gun on consignment and I'm not on board with them double dipping. The DOJ law is clear, PPT transfers are exempt from sales tax, period. Anyone have a proof to the contrary ?
CONSIGNMENTS are in fact taxed since the dealer is involved in the sale unlike the PPT which the dealer is not involved in the sale. So, you are 100% in the wrong.

Last edited by taperxz; 11-09-2023 at 3:16 PM..
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  #11  
Old 11-09-2023, 3:27 PM
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Quote:
Originally Posted by taperxz View Post
CONSIGNMENTS are in fact taxed since the dealer is involved in the sale unlike the PPT which the dealer is not involved in the sale. So, you are 100% in the wrong.
This is correct
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  #12  
Old 11-09-2023, 3:28 PM
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Quote:
Originally Posted by taperxz View Post
CONSIGNMENTS are in fact taxed since the dealer is involved in the sale unlike the PPT which the dealer is not involved in the sale. So, you are 100% in the wrong.
This. Cosignments are like PPTs except worse; you pay tax.
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  #13  
Old 11-09-2023, 3:41 PM
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When a California private party seller brings a California FFL dealer a firearm and requests that they find a buyer, the FFL dealer is considered the consignee and retailer of the firearm and liable for sales tax on the subsequent sale of the firearm.

However, when a California FFL Dealer completes the registration paperwork for a California private party that is selling a firearm to a California purchaser and the seller and purchaser have negotiated the terms of sale in advance, and then bring the firearm to you to meet the statutory requirements for the documentation and registration of the transfer, the California FFL dealer is not considered to be the retailer of the firearm and not be responsible for the tax provided the FFL dealer does not take title to the firearm at any time during the transaction. The private party seller would be liable for the tax unless the transaction qualifies for an exemption. For example, the sale of a firearm between California private parties may be exempt from tax if the sale meets the provisions of an exempt occasional sale as provided in Regulation 1595,

https://www.cdtfa.ca.gov/industry/gun-dealers.htm

Last edited by sass2924; 11-09-2023 at 3:45 PM..
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  #14  
Old 11-09-2023, 3:56 PM
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Quote:
Originally Posted by taperxz View Post
CONSIGNMENTS are in fact taxed since the dealer is involved in the sale unlike the PPT which the dealer is not involved in the sale. So, you are 100% in the wrong.
I understand what you're saying, EXCEPT, this is an off roster gun, the FFL is transferring the gun to me by PPT paperwork and this gun is NOT considered in the FFL's inventory. I would agree with all of you if this gun was purchased or owned by the FFL and then sold to me on a standard DROS, rather than a PPT. However, that's illegal due to the guns off roster status and the only way it can be sold is by PPT or to an exempt person.

I just got off the phone with DOJ, they stated that PC 28055 clearly describes the fees that FFL's can charge for a PPT. Again, according to the DOJ and Calif law, the FFL cannot charge sales tax on PPT's. There is no reason an FFL should charge sales tax for a PPT, tax was already paid when it was originally purchased and the law is clear what an FFL can charge.
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  #15  
Old 11-09-2023, 4:07 PM
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I just read the penal code and it can be interpreted in a couple ways. The word fees is used in every clarification. And the FFL may not charge more than a $10 fee on a sale, loan, or transfer of a private party fire. And it says that they may not charge any additional fees. But what he's charging is a tax and I guess the million-dollar question is, is tax a fee? Everything's written in a gray area these days. But if you are going to charge somebody tax and they're going to pay it to you, as an FFL your *** better send that money into the government otherwise you should be shut down just for being a complete a-hole and a thief. What you did is stole money from somebody
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  #16  
Old 11-09-2023, 4:49 PM
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Quote:
Originally Posted by OCGunFan View Post
I understand what you're saying, EXCEPT, this is an off roster gun, the FFL is transferring the gun to me by PPT paperwork and this gun is NOT considered in the FFL's inventory. I would agree with all of you if this gun was purchased or owned by the FFL and then sold to me on a standard DROS, rather than a PPT. However, that's illegal due to the guns off roster status and the only way it can be sold is by PPT or to an exempt person.

I just got off the phone with DOJ, they stated that PC 28055 clearly describes the fees that FFL's can charge for a PPT. Again, according to the DOJ and Calif law, the FFL cannot charge sales tax on PPT's. There is no reason an FFL should charge sales tax for a PPT, tax was already paid when it was originally purchased and the law is clear what an FFL can charge.
You're still wrong and you're not covering the second hand license agreement we have with the person selling. FFL's with a second hand consignment license are getting paid a percentage of the sale to sell that gun on their behalf. We only use the PPT portal because its the only way to dispose of that gun in the system and let the DOJ know that the gun being purchased is no longer in that persons name.

Anyway, you can get upset all you want but that store is doing it correctly.
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Old 11-09-2023, 4:53 PM
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Quote:
Originally Posted by kingransom View Post
I just read the penal code and it can be interpreted in a couple ways. The word fees is used in every clarification. And the FFL may not charge more than a $10 fee on a sale, loan, or transfer of a private party fire. And it says that they may not charge any additional fees. But what he's charging is a tax and I guess the million-dollar question is, is tax a fee? Everything's written in a gray area these days. But if you are going to charge somebody tax and they're going to pay it to you, as an FFL your *** better send that money into the government otherwise you should be shut down just for being a complete a-hole and a thief. What you did is stole money from somebody
I just love the experts here

Tax is closely monitored in this state. Not sure if you're familiar with those folks but not paying sales tax you collect for the state is worse than not paying income tax. No ding dong would not send the money to the state AND forget getting shut down, you are looking at time in San Quentin for not paying the sales tax owed.

YES! an FFL can charge a percentage for a consignment gun. If we couldn't, why in H E L L would we even bother doing the paperwork?
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  #18  
Old 11-09-2023, 5:29 PM
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Quote:
Originally Posted by taperxz View Post
I just love the experts here

Tax is closely monitored in this state. Not sure if you're familiar with those folks but not paying sales tax you collect for the state is worse than not paying income tax. No ding dong would not send the money to the state AND forget getting shut down, you are looking at time in San Quentin for not paying the sales tax owed.

YES! an FFL can charge a percentage for a consignment gun. If we couldn't, why in H E L L would we even bother doing the paperwork?
I was an FFL for 35 years and specialized in consignments, so trust me I understand about dealing the DOJ, FTB and IRS. We all charge a fee to consign an item, that's not the issue I'm addressing. I'm only talking about the fees an FFL can charge for a PPT. The seller will be paying his consignment fee to the FFL, but why is there sales tax added to a PPT transaction, when the law clearly states the FFL can only charge $47.19 ?

BTW, off roster guns on consignment do not go through the 2nd hand dealers license, because they're not owned by the FFL. The guns serial numbers are run through the DOJ when the DROS is submitted, so if its stolen it's flagged before the delivery date. I also owned a pawnshop and am extremely familiar with 2nd hand dealer laws. We all know the PPT is the only way to circumvent the roster, other than family transfers, which for us old guys with long dead parents, makes it difficut to accomplish.

Last edited by OCGunFan; 11-09-2023 at 5:48 PM..
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  #19  
Old 11-09-2023, 5:51 PM
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Quote:
Originally Posted by OCGunFan View Post
I was an FFL for 35 years and specialized in consignments, so trust me I understand about dealing the DOJ, FTB and IRS. We all charge a fee to consign an item, that's not the issue I'm addressing. I'm only talking about the fees an FFL can charge for a PPT. The seller will be paying his consignment fee to the FFL, but why is there sales tax added to a PPT transaction, when the law clearly states the FFL can only charge $47.19 ?

BTW, off roster guns on consignment do not go through the 2nd hand dealers license, because they're not owned by the FFL. The guns serial numbers are run through the DOJ when the DROS is submitted, so if its stolen it's flagged before the delivery date. I also owned a pawnshop and am extremely familiar with 2nd hand dealer laws. We all know the PPT is the only way to circumvent the roster, other than family transfers, which for us old guys with long dead parents, makes it difficut to accomplish.
Sorry, but you're some kind of a, well, mistaken. You have no idea what you're talking about.

You are flat out wrong when it comes to consignments.
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Old 11-09-2023, 6:07 PM
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Sorry, but you're some kind of a, well, mistaken. You have no idea what you're talking about.

You are flat out wrong when it comes to consignments.
Ditto, I'm sorry you're incapable of grasping the issue I'm addressing. This has NOTHING to do with consignments, it only has to do with the PPT fees an FFL is legally allowed to charge. Again, in my chat with the DOJ today, they confirmed that I'm correct, because the FFL never takes ownership of the off roster, oyherwise that would make the gun illegal to sell to non-exempt people.
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Old 11-09-2023, 6:38 PM
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Quote:
Originally Posted by OCGunFan View Post
This is 100% false info. FFL dealers are ALWAYS involved in a firearm or ammo transfer, but PPT by law are exempt from sales tax. The FFL must charge sales tax if an item was purchased outside of Calif and sent to a Calif FFL, then transfered to an individual. However, if an item was purchased in Calif with the sales tax originally paid in Calif, its taken out of Calif and reimported back to Calif with proof of the original purchase, it is tax exempt.

I'm having an argument with a gun range in south OC who wants to charge me tax for a PPT gun on consignment and I'm not on board with them double dipping. The DOJ law is clear, PPT transfers are exempt from sales tax, period. Anyone have a proof to the contrary ?
Quote:
Originally Posted by OCGunFan View Post
Ditto, I'm sorry you're incapable of grasping the issue I'm addressing. This has NOTHING to do with consignments, it only has to do with the PPT fees an FFL is legally allowed to charge. Again, in my chat with the DOJ today, they confirmed that I'm correct, because the FFL never takes ownership of the off roster, oyherwise that would make the gun illegal to sell to non-exempt people.
This is what I?m addressing. You wanted something on CONSIGNMENT.

This transaction is taxed because the dealer is part of the transaction and collects money for the transaction and makes a profit off the transaction.

BTW, no dealer is double dipping on charging sales tax as required on consignments. It?s not a fee and the dealer doesn?t keep sales tax. The state is charging that and last I heard, they can charge you anything they want. They aren?t bound to PPT rules set by DOJ it?s California

Last edited by taperxz; 11-09-2023 at 7:32 PM..
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  #22  
Old 11-10-2023, 9:54 AM
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Quote:
Originally Posted by OCGunFan View Post
This is 100% false info. FFL dealers are ALWAYS involved in a firearm or ammo transfer, but PPT by law are exempt from sales tax. The FFL must charge sales tax if an item was purchased outside of Calif and sent to a Calif FFL, then transfered to an individual. However, if an item was purchased in Calif with the sales tax originally paid in Calif, its taken out of Calif and reimported back to Calif with proof of the original purchase, it is tax exempt.

I'm having an argument with a gun range in south OC who wants to charge me tax for a PPT gun on consignment and I'm not on board with them double dipping. The DOJ law is clear, PPT transfers are exempt from sales tax, period. Anyone have a proof to the contrary ?
NO, it is not! Since (whenever) you had your FFL, life and the Calif. firearms processing has obviously passed you by.
Dealers are "seldom" involved in the financial TRANSACTION of a PPT. If they are, due to an consignment agreement, then sales tax is subject to collection and submission to the SFTAB.
The PPT fees are set by law...and aside from the consignment fee.
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  #23  
Old 11-13-2023, 8:39 AM
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Taper, Sass, and Tyke are all correct. I won't repeat what they said. But you're also wrong about how whether a firearm on consignment is part of a FFL's inventory.

When a FFL takes in a firearm on consignment the have to enter it as an Acquisition through DES. That system has two choices, "Acquire" or "Consign". A FFL must have a second hand dealer's license or they are not given the "Consign" option, only "Acquire". If a FFL "Acquires" an off roster handgun, it becomes part of his inventory and is not eligible to be sold as a PPT, and can't be sold in CA to a non-exempt person. If they enter it as "Consign" the firearm is not considered part of the FFL's inventory (it is in their A&D book, but not inventory). The owner of the firearm retains ownership so an off an roster handgun can be sold as a PPT in CA.

The other thing that appears to have changed since you were a FFL is that a dealer has to wait 30 days after a firearm is enter in DES before it can be transferred. That is when DOJ is supposed to make sure its not stolen.

It really comes down to who finds the buyer. If the owner brings the buyer there is no sales tax, if the FFL finds the buyer then it is taxed.
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Old 11-20-2023, 1:04 PM
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NARDO1895, that's exactly the info I was looking for, I appreciate the clarification on the newer laws & policies. When the DOJ told me that a PPT is exempt from sales tax, they didn't discern between the aquire or consign, they only said all PPT's are exempt and I'venever heard of the difference. I appreciate someone on this board explaining it, when I gave up my FFL and sold my store, none of these laws were in effect. Thanks again.
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Old 12-01-2023, 10:02 AM
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As a follow up to all this....I just sold a Makarov on gunbroker.com to someone in Michigan. gunbroker made me pay sales tax. Buyer/Seller beware.
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  #26  
Old 12-01-2023, 10:51 AM
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Quote:
Originally Posted by bjjgrappler View Post
As a follow up to all this....I just sold a Makarov on gunbroker.com to someone in Michigan. gunbroker made me pay sales tax. Buyer/Seller beware.
They made the buyer pay the sales tax. He paid it to you and GB collects it from you.
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