Sales tax for Out of state purchase? YES - FFL must collect, buyer must pay

[MrBAD]

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]

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

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

[Santa Cruz Armory]

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]

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]

As stated from my post, stickied,

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]

As stated from my post, stickied,

Thank you

[holiday]

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]

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]

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]

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]

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]

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

read it for yourself,

http://www.calguns.net/calgunforum/showthread.php?t=534146

http://www.calguns.net/calgunforum/attachment.php?attachmentid=134522&d=1328917333

[Paperchasin]

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]

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]

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.