Taxes on Internet Pistol Purchase - Question

[Dutch]

Greetings -

I recently purchased a pistol online, it was the first time I have ever completed an online pistol purchase from out of state. During the "shopping around" period for the purchase, I researched several FFL holders in the San Diego area that receive weapons on behalf of purchasers.

1st - The difference in cost for handling the transaction from one shop/person to the next was incredible, there did not seem to be an industry standard in my area. Prices ranged from $40.00 to $125.00 for the transfer fee.

2nd - I think people were trying to gouge me, I need opinions or tax law fact to determine if the FFL holders or I am FOS. At least two sellers told me the tax charge would be on the cost of their transaction to transfer the firearm. The rest of the sellers told me that I would have to pay CA to them for the cost of the weapon, a substantial difference from the fellas that wanted to charge me taxes for the cost of the transaction only.

3rd - Why would I have to pay CA taxes on a weapon that was essentially purchased out of state via the internet - I do not pay taxes on other out of state purchases made via the internet.

I am looking for feedback about my situation...specifically, were the guys/shops that were trying to charge me taxes out of line?

[Frijolito1988]

I have NEVER had to pay taxes for CA, the average for an out of state transfer fee is $50-75

[chucks]

The tax is a "use tax" and not a sales tax. It has been on the books since the 1930's. FFLs are supposed to collect it or they stand to fall in disfavor with the Ca gov.

http://www.boe.ca.gov/sutax/faqusetax.htm

[Dutch]

jeez.....reading the "use tax" FAQ made me even more unhappy with the amount of taxes, fees, etc. we pay to the Gov....the Gov reaches out and touches our wallets every which way at all times

[shoupdawg]

My FFL charges me sales tax on the purchase price of the gun and the fee he charges for his transaction. He is a very by the book kinda guy. So if the gun is $400 and his fee was $100, I would be paying $38.75 (7.75% tax in his county.)

If a seller, out of state or not, is willing to provide a letter that states that he is not in business for himself, and that is a private and occassional sale, he will not charge sales tax.

[jimrod]

I've brought in probably 15 guns into CA using local dealers. I've never paid sales tax on any gun.

[G17GUY]

The use tax is BS, the BOE spreads fud just like the BOF.

"Generally, the same types of items that are subject to sales tax are subject to use tax. Sales and use tax applies to the sale or use of tangible personal property in California."

Out of state purchases are not subject to state sales tax. I have not used any property I have not purchased yet; so I should not have to pay tax on an item I own but have not used. I am at will to report my own use of an item and pay that tax. I will not buy from someone that thinks different.

[Darklyte27]

You probably guessed where the Govt gets all this money to spend on Wars, Bank bailouts and other crap by now right?..

And the lucky people who happen to work for the govt and their big paychecks?
my FFL didnt collect any taxes. I hope he keeps it that way.
We already are forced to give enough money for stupid stuff anyways.

[Maybejim]

The use tax is BS, the BOE spreads fud just like the BOF.

"Generally, the same types of items that are subject to sales tax are subject to use tax. Sales and use tax applies to the sale or use of tangible personal property in California."

Out of state purchases are not subject to state sales tax. I have not used any property I have not purchased yet; so I should not have to pay tax on an item I own but have not used. I am at will to report my own use of an item and pay that tax. I will not buy from someone that thinks different.

You are legally required to report any out of state purchases brought into Kalifornia for use there and pay the use tax. That includes mail order, Amazon, and Internet orders. I'm sure that everyone here is careful to do that.

[G17GUY]

You are legally required to report any out of state purchases brought into Kalifornia for use there and pay the use tax. That includes mail order, Amazon, and Internet orders. I'm sure that everyone here is careful to do that.

You are correct, and that is my business. It is not your business nor any ffl dealers business.

[8200rpm]

You are legally required to report any out of state purchases brought into Kalifornia for use there and pay the use tax. That includes mail order, Amazon, and Internet orders. I'm sure that everyone here is careful to do that.

I think G17GUY's point is that you shouldn't pay "USE" tax for tangible property that you haven't "USED", yet. For out-of-state purchases as you described, use tax is paid along with your income tax on next April's CA540 for using the tangible property in the state of CA.

Dealers can collect "SALES" tax when you "purchase" tangible property from them. But when you make an OUT-OF-STATE purchase and use an in-state dealer for the transfer, G17GUY's belief is that he should not be charged "SALES" or "USE" tax at the time of transfer.

The "transfer" issue is what the BOE is using to intimidate dealers to collect "SALES" tax despite the fact that the "sale" occurred out of state.

Po-TAY-to, Po-TAT-o... you pay it now or you pay it later. It's BS that the state intimidates transfer dealers to become use tax collectors. But, is it really surprising? State governments are doing everything they can force businesses to collect tax.

http://tech.yahoo.com/news/nm/20090113/wr_nm/us_amazon_lawsuit_2

http://www.rgj.com/article/20090118/BIZ/901180319/1071

[tenpercentfirearms]

Oh man. We have gone over this. The BOE is claiming that the in state FFL is the retailer and as such must collect SALES TAX. The dealer is not collecting use tax as that is your job to report.

I am not going to pay your sales tax if I get audited for a measily $50 transfer fee. If you do not want me to charge sales tax as I have been instructed to by the BOE, then I respect your right to go use another dealer who doesn't mind taking on that sales tax liability should they ever get audited.

Basically this boils down to a lot of people want to cheat their use tax and get good and riled up when they can't do it because a dealer is doing as they have been instructed by the BOE. Otherwise, people would be glad to skip use tax on their state income tax and just pay the sales tax to the dealer.

Private party sales are considered occassional sales and not subject to sales or use tax.

Here is a thread that links to some more threads.

http://www.calguns.net/calgunforum/showthread.php?t=137688&highlight=boe+retail+sales+tax

And no one is gouging you if you choose to pay $125 for a transfer. Gouge is an over used term. The word you want to use is stupid. If you are stupid enough to pay a $125 transfer fee, that is your choice. You are doing the right thing and doing some research before you do the transfer. That makes you a smart buyer and will help you save money.

And heck, people who pay the $125 transfer are not necessarily stupid. They might have more money than time and not want to shop around.

Dealers vary their price usually on how much they value transfers. Dealers who don't want to do transfers, charge so much they won't have to worry about it. Dealers who see it as a tool charge in the middle. Dealers who just love paperwork charge a minimal fee.

So, you cannot get gouged by a transfer dealer. You either find their terms (sales tax or fee) agreeable or you go elsewhere.

[Dutch]

Thanks for the info links - It seems the best position to take is to work with a dealer that defers collection of the "use" tax at the time of transfer and also tells the customer that the tax is payable during tax time

....it is still a bunch of pucky

[gun toting monkeyboy]

Just go to Gussler's in La Mesa. He has contact information online. He costs $30 for the transfer, and $25 for the DROS per gun the last time I checked. He is honest, straight forward, and will get your transfers done with a minimum of drama.

-Mb

[DMCA]

Pardon the repitition, but to clarify;

1) There is a statutory requirement to collect sales tax on the sales price of any, or only new guns from out of state?

2) The taxable value is based on documentation shipped with the gun?