How many other FFLs are getting tired...

[hoffmang]

Wes,

If the out-of-state firearm dealer is not registered with the Board of Equalization, you must collect the use tax on the sales price of the firearm and remit the tax to the Board. You are considered the retailer of the firearm in this situation pursuant to Revenue and Taxation Code Section 6007.

We've never had a state agency stretch the truth have we?

Let's read 6007:

6007. A "retail sale" or "sale at retail" means a sale for any purpose other than resale in the regular course of business in the form of tangible personal property.
When tangible personal property is delivered by an owner or former owner thereof, or by a factor or agent of that owner, former owner, or factor to a consumer or to a person for redelivery to a consumer, pursuant to a retail sale made by a retailer not engaged in business in this state, the person making the delivery shall be deemed the retailer of that property. He or she shall include the retail selling price of the property in his or her gross receipts or sales price.

You aren't the former owner of the firearm. You are not the agent of the seller - he's already collected his money. To the extent you have agency you have agency to the current owner who wants you to transfer his property to him and agency to the United States as an FFL. You aren't a factor as you aren't extending credit on the sale of the firearm.

We're in Category 4, Capacity to Accept, Permanent Modification land here.

This is also assuming that a sale ever happens in your shop on a gun that was already bought and paid for.

-Gene

[SemiAutoSam]

The quoted text below talks about a out of state dealer but what if the out of state seller is not a FFL / Dealer as I see it this section does not apply either.

How would they rationally think you would know what the Sales price of the firearm is when you have nothing to do with the sale of the fire arm your only the transfer dealer.

Have you ever experienced a audit or are you just being paranoid about FTB performing one on your shop ?

If the out-of-state firearm dealer is not registered with the Board of Equalization, you must collect the use tax on the sales price of the firearm and remit the tax to the Board. You are considered the retailer of the firearm in this situation pursuant to Revenue and Taxation Code Section 6007.

And per 6007 I end up being liable for the sales tax on full MSRP for the firearm. The BOE considers me the retailer and 6007 backs them up. Unless you can find otherwise.

What am I supposed to do when the customer doesn't tell me a price or I don't believe them? I just sent the BOE those exact questions because they are good ones.

[tenpercentfirearms]

6007. When tangible personal property is delivered...to a person for redelivery to a consumer, pursuant to a retail sale made by a retailer not engaged in business in this state, the person making the delivery shall be deemed the retailer of that property.

That one most certainly applies to me if I receive the firearm from another retailer. If you had bought the gun from me, I would be the retailer. If you buy it from someone else and I make the delivery, I am the retailer. Why am I the only one who sees this? Is it because I am liable for it? Probably.

Now Sam brings up a good point. If I receive the firearm from a non-retailer, I might not be liable. That is why I just e-mailed them.

Sam, use the same Find CA Law database for Penal Code but search for 6007 under the "Revenue and Taxation Code". http://www.leginfo.ca.gov/calaw.html

There is nothing paranoid about being liable for sales tax that the BOE has directed me to collect. I am not going to wait 10 years and find out I was wrong when I do get audited and end up owing thousands of dollars. Sorry.

Anyone who expects me to take on their tax liability because they don't like to pay taxes is foolhardy. If you can find dealers who don't mind taking on your liability and you have no problems sticking them with your tax liability should they get audited, I would rather you deal with them for your $25 transfer.

[SemiAutoSam]

Thanks Wes Ill check out that link.

I take that answer to be a NO.

How can you be the retailer when you received no $$$ for the item and you never had legal title to the item your DROSing.

We can see here that the FTB codes and 100% insanity.

Here is an easy solution dont contract with them. Or maybe in the case of The FFL its Mandatory to having a FFL. I know It was not when I was a FFL in Nevada but then I never had Unconstitutional California law to deal with.

BTW here is the code that Wes was talking about if my leginfo.ca.gov Foo is good.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=77452816085+0+0+0&WAISaction=retrieve

Here is the key the key word here is SALE. If the FFL accepts a shipment that has already been paid for before the shipment was received by the FFL the FFL was not a party to the sale.

http://www.lectlaw.com/def2/s122.htm

SALE - An agreement by which one of the contracting parties, called the seller, gives a thing and passes the title to it, in exchange for a certain price in current money, to the other party, who is called the buyer or purchaser, who, on his part, agrees to pay such price.

6007. A "retail sale" or "sale at retail" means a sale for any
purpose other than resale in the regular course of business in the
form of tangible personal property.
When tangible personal property is delivered by an owner or former
owner thereof, or by a factor or agent of that owner, former owner,
or factor to a consumer or to a person for redelivery to a consumer,
pursuant to a retail sale made by a retailer not engaged in business
in this state, the person making the delivery shall be deemed the
retailer of that property. He or she shall include the retail
selling price of the property in his or her gross receipts or sales
price.

That one most certainly applies to me if I receive the firearm from another retailer. If you had bought the gun from me, I would be the retailer. If you buy it from someone else and I make the delivery, I am the retailer. Why am I the only one who sees this? Is it because I am liable for it? Probably.

Now Sam brings up a good point. If I receive the firearm from a non-retailer, I might not be liable. That is why I just e-mailed them.

Sam, use the same Find CA Law database for Penal Code but search for 6007 under the "Revenue and Taxation Code". http://www.leginfo.ca.gov/calaw.html

There is nothing paranoid about being liable for sales tax that the BOE has directed me to collect. I am not going to wait 10 years and find out I was wrong when I do get audited and end up owing thousands of dollars. Sorry.

Anyone who expects me to take on their tax liability because they don't like to pay taxes is not thinking clearly. If you can find dealers who don't mind taking on your liability and you have no problems sticking them with your tax liability should they get audited, I would rather you deal with them for your $25 transfer.

[hoffmang]

Wes,

You didn't make the sale. The BOE admits that you should collect use tax. Notice that?

Now go read CCR 1827 (b) (1):

http://www.boe.ca.gov/pdf/reg1827.pdf

(b) WHEN COLLECTION OF USE TAX IS REQUIRED.
(1) DELIVERIES INTO THE DISTRICT. A Retailer engaged in business in the district (except retailers of certain
vehicles, aircraft and vessels as described in paragraph (c)(4) below) shall not be required to collect use tax from the
purchaser of tangible personal property unless the retailer ships or delivers the property into the district or participates
within the district in making the sale of the property, including, but not limited to soliciting or receiving the order,
either directly or indirectly, at a place of business of the retailer in the district or through any representative, agent,
canvasser, solicitor, subsidiary or person in the district under authority of the retailer.

This smells very similar to an AAG off the reservation to me...

-Gene

[tenpercentfirearms]

How can you be the retailer when you received no $$$ for the item and you never had legal title to the item your DROSing..

I have been telling you for some time that this is not about sense; it is about cents. You keep thinking the tax code needs to be rational. That is extemely naive when you take into consideration the tax code was not designed to make sense; it was made to make cents. The whole point is for the government to collect money. Why would they make sensible laws that deny them their revenue source? That makes no sense. You need to look at this for what it is. A way for the state to maximize revenue, not to be logical or what you think is right.

Here is an easy solution dont contract with them. Or maybe in the case of The FFL its Mandatory to having a FFL. I know It was not when I was a FFL in Nevada but then I never had Unconstitutional California law to deal with

Too late. I contacted them and they have me on file as knowing better. Second, do you think my ignorance of tax code is going to be a valid defense when big brother comes to collect their tax? Hardly.

The reason I am not going to have a cavalier "come get me attitude" with retail sales tax is because the system is stacked against me. I stand up where I can, but this is one where it doesn't make any sense for me to take on my customer's tax liability.

For example, being the fense sitting conspiracy nut I am, I have heard the Feds actually have no basis for collecting Federal Income Tax. So when I received a letter to the gun shop a couple months ago notifying me that I had filed my partnership returns late and I now owed $150, I was skeptical. The funny part is the letter said, "If your records agree with ours, remit your payment. If your records do not agree contest this within so many days." I could tell by the tone of their letter they were fishing. I didn't bite and sent the most generic response of all time. I didn't even offer any evidence nor did I feel I had to. Here was my response.

This letter is in reference to a letter I received stating that I had filed my partnership returns late. Your statement does not agree with my records. According to my records I mailed those returns before the April 17th, 2007 deadline.

Please remove this penalty from our account as we mailed our records before the April 17th, 2007 deadline. Thank you.

A few weeks later I received another letter apologizing for the foul up and the $150 was removed! Hot damn!

[tenpercentfirearms]

Gene, I think you might be as tired as I am. You just posted a section that states I have to collect use tax because I am taking delivery of your property in my district. Read it again.

A Retailer engaged in business in the district (except retailers of certain
vehicles, aircraft and vessels as described in paragraph (c)(4) below) shall not be required to collect use tax from the
purchaser of tangible personal property unless the retailer ships or delivers the property into the district or participates
within the district in making the sale of the property, including, but not limited to soliciting or receiving the order,
either directly or indirectly, at a place of business of the retailer in the district or through any representative, agent,
canvasser, solicitor, subsidiary or person in the district under authority of the retailer.

Thanks for backing me up Gene.

[SemiAutoSam]

Sorry I edited this part in after you started your reply.

This may be the answer your looking for.

Here is the key the key word here is SALE. If the FFL accepts a shipment that has already been paid for before the shipment was received by the FFL the FFL was not a party to the sale.

http://www.lectlaw.com/def2/s122.htm

SALE - An agreement by which one of the contracting parties, called the seller, gives a thing and passes the title to it, in exchange for a certain price in current money, to the other party, who is called the buyer or purchaser, who, on his part, agrees to pay such price.

6007. A "retail sale" or "sale at retail" means a sale for any
purpose other than resale in the regular course of business in the
form of tangible personal property.
When tangible personal property is delivered by an owner or former
owner thereof, or by a factor or agent of that owner, former owner,
or factor to a consumer or to a person for redelivery to a consumer,
pursuant to a retail sale made by a retailer not engaged in business
in this state, the person making the delivery shall be deemed the
retailer of that property. He or she shall include the retail
selling price of the property in his or her gross receipts or sales
price.

[tenpercentfirearms]

Sorry I edited this part in after you started your reply.

This may be the answer your looking for.

Here is the key the key word here is SALE. If the FFL accepts a shipment that has already been paid for before the shipment was received by the FFL the FFL was not a party to the sale.

http://www.lectlaw.com/def2/s122.htm

6007. A "retail sale" or "sale at retail" means a sale for any
purpose other than resale in the regular course of business in the
form of tangible personal property.
When tangible personal property is delivered by an owner or former
owner thereof, or by a factor or agent of that owner, former owner,
or factor to a consumer or to a person for redelivery to a consumer,
pursuant to a retail sale made by a retailer not engaged in business
in this state, the person making the delivery shall be deemed the
retailer of that property. He or she shall include the retail
selling price of the property in his or her gross receipts or sales
price.

That is a pretty big stretch considering it clearly states, "When tangible personal property is delivered...to a person for redelivery to a consumer, pursuant to a retail sale made by a retailer not engaged in business in this state, the person making the delivery shall be deemed the retailer of that property." It is hard to argue I didn't participate in the sale when it is so clear in 6007 that I am considered the retailer. I know you guys don't like it, but when are you going to realize these guys set up the game like they knew how to make money?

[hoffmang]

Wes,

You didn't ship or deliver into the district. The seller shipped and UPS delivered. There was no sale in this state. You didn't solicit or receive the order. You received a firearm that belongs to the purchaser.

If your interpretation is correct, when does 1827 (b) (1) ever apply?

You and your BOE rep are wrong.

-Gene

[dustoff31]

Sam, use the same Find CA Law database for Penal Code but search for 6007 under the "Revenue and Taxation Code". http://www.leginfo.ca.gov/calaw.html

There is nothing paranoid about being liable for sales tax that the BOE has directed me to collect. I am not going to wait 10 years and find out I was wrong when I do get audited and end up owing thousands of dollars. Sorry.

Anyone who expects me to take on their tax liability because they don't like to pay taxes is foolhardy. If you can find dealers who don't mind taking on your liability and you have no problems sticking them with your tax liability should they get audited, I would rather you deal with them for your $25 transfer.

10% - You have mentioned several times that the state directs you to collect sales tax.

Using the link that you provided, I found the section below that seems to indicate that this is not the case. The tax is levied on YOU, the retailer, for the priviledge of selling. It is not levied on the customer for the priviledge of buying. But if you can talk your customers into assuming YOUR tax burden, more power to you.


REVENUE AND TAXATION CODE
SECTION 6051-6055

6051. For the privilege of selling tangible personal property at
retail a tax is hereby imposed upon all retailers at the rate of 21/2
percent of the gross receipts of any retailer from the sale of all
tangible personal property sold at retail in this state on or after
August 1, 1933, and to and including June 30, 1935, and at the rate
of 3 percent thereafter, and at the rate of 21/2 percent on and after
July 1, 1943, and to and including June 30, 1949, and at the rate of
3 percent on and after July 1, 1949, and to and including July 31,
1967, and at the rate of 4 percent on and after August 1, 1967, and
to and including June 30, 1972, and at the rate of 33/4 percent on
and after July 1, 1972, and to and including June 30, 1973, and at
the rate of 43/4 percent on and after July 1, 1973, and to and
including September 30, 1973, and at the rate of 33/4 percent on and
after October 1, 1973, and to and including March 31, 1974, and at
the rate of 43/4 percent thereafter.

[SemiAutoSam]

They cant define the word with the word in the definition.

You cant define Motor Vehicle if you dont define vehicle first. Are you getting my meaning here?

SO with the same logic they cant define retail sale if the word sale is not defined first and they dont define sale in the code here You need to get that from an outside source like blacks 6th works and that is the same as the link I provided above.

And again below here. Where do you see yourself as a party to the sale ?

SALE - An agreement by which one of the contracting parties, called the seller, gives a thing and passes the title to it, in exchange for a certain price in current money, to the other party, who is called the buyer or purchaser, who, on his part, agrees to pay such price.

Since you did not make a "Sale" 6007 is void from the out of state Transfer as I see it.



6007. A "retail sale" or "sale at retail" means a sale for any
purpose other than resale in the regular course of business in the
form of tangible personal property.
When tangible personal property is delivered by an owner or former
owner thereof, or by a factor or agent of that owner, former owner,
or factor to a consumer or to a person for redelivery to a consumer,
pursuant to a retail sale made by a retailer not engaged in business
in this state, the person making the delivery shall be deemed the
retailer of that property. He or she shall include the retail
selling price of the property in his or her gross receipts or sales

That is a pretty big stretch considering it clearly states, "When tangible personal property is delivered...to a person for redelivery to a consumer, pursuant to a retail sale made by a retailer not engaged in business in this state, the person making the delivery shall be deemed the retailer of that property." Basically, you have them defining sale in that first part of 6007 and the part I just quoted is part of the definition. Again, do I want to pay thousands of dollars of taxes if what seems to be pretty clear sticks?

[hoffmang]

firearm laws are hard enough to keep up with.why make a dealers life more difficult when they have all their time sucked up by other agencies.i agree that tax shouldn't be collected but that is just logical.how many laws are ment to be logical and how many laws are ment to be misinterpreted. how many laws mean two different things.

Maybe because this country was founded with a tax revolt?

-Gene

[tenpercentfirearms]

LOL. I just clicked on Sam's link to the definition of sale. It is to some third party law library site. Here I thought you were taking it out of the Revenue and Tax code. I am not a lawyer or an accountant, but I think we better look at what section 6006 says about "sale", not some third party site.

6006. "Sale" means and includes:
(a) Any transfer of title or possession, exchange, or barter,
conditional or otherwise, in any manner or by any means whatsoever,
of tangible personal property for a consideration. "Transfer of
possession" includes only transactions found by the board to be in
lieu of a transfer of title, exchange, or barter.

Sam, keep it in the code man.

Gene,

The question is why does 6007 say I am considered the retailer because I am making the delivery? You could claim that UPS is making the delivery, but that is not correct. The UPS man cannot hand a firearm over to the buyer. I have to give it to them.

So what does "delivery" mean? Does it mean who brings it into the district? Or does it mean who gives the property directly to the buyer?

Tell you what, I will e-mail my accountant and ask him what he thinks.

[SemiAutoSam]

OK sorry I didn't see that the "Code" defined it.

I like my definition alot better its more straight forward and to the point.

The FTB definition is wrong IMHO it was written to line the coffers of government with the $$$ of the subjects of the state.

6006. "Sale" means and includes:
(a) Any transfer of title or possession, exchange, or barter,
conditional or otherwise, in any manner or by any means whatsoever,
of tangible personal property for a consideration. "Transfer of
possession" includes only transactions found by the board to be in
lieu of a transfer of title, exchange, or barter.

LOL. I just clicked on Sam's link to the definition of sale. It is to some third party law library site. Here I thought you were taking it out of the Revenue and Tax code. I am not a lawyer or an accountant, but I think we better look at what section 6006 says about "sale", not some third party site.



Sam, keep it in the code man.

Gene,

The question is why does 6007 say I am considered the retailer because I am making the delivery? You could claim that UPS is making the delivery, but that is not correct. The UPS man cannot hand a firearm over to the buyer. I have to give it to them.

So what does "delivery" mean? Does it mean who brings it into the district? Or does it mean who gives the property directly to the buyer?

Tell you what, I will e-mail my accountant and ask him what he thinks.