How many other FFLs are getting tired...

[timmy8151]

If a FFL wanted to collect sales taxes, I would ask for a citation from the State.
You have NOT provided evidence, only a poorly supported opinion.

I take offense to 10%'s so-called authority on the matter. You are certainly not an authority on tax matters, and I would never do business with someone as uninformed as you who wishes to collect my dollars.

I'm sure Wes wouldnt want your business anyways

[SemiAutoSam]

This one works great for me.

Reminds me of the no tresspassing sign that I wanted to post: ATTENTION TRESSPASSORS - I HAVE 400 ACRES AND A BACKHOE! But, since this is Ca., I figured that I would have been asking for trouble so, I never posted it.

[glockman19]

Careful there. Your use tax is due to BOE by law. What is at issue is whether the FFL is obligated to collect it. You have to pay it.

It's my understanding that the tax can be collected by the seller. If my seller is in another state and the invoice that comes with the shipped gun to a CA FFL says that all applicable fees & taxes have been paid then the CA FFL CAN NOT charge me tax again. and then it becomes the sellers responsibility to pay the state of CA.

The only ones hurting or upset in this situation are the CA FFL's that lose business because of their policy. I don't feel sorry for them.

IF however I buy a gun from one of them I'm happy to pay the sales tax.

[TacFan]

IF however I buy a gun from one of them I'm happy to pay the sales tax.

I wouldn't say you're happy to pay the sales tax but you understand since it is normal.

[hoffmang]

glockman,

Lets take the FFL out. You owe use tax on any purchase you make out of state. You are allowed an exemption on tax owed to California based on how much tax you paid out of state up to the total of California Use Tax Due. If the out of state seller collected 0% sales tax, then you owe 7.5% to 8.5% depending on where you live to BOE. If the out of state seller collected 6% sales tax, you get to subtract that from your local rate and pay the difference to BOE.

That's definitely the law. Getting the CA FFL to not collect use tax just shifts the burden of payment to you, the California buyer.

-Gene

[CALI-gula]

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.

Why? The "sale" for you is the transfer fee. That should be the only thing that determines YOUR sales tax. I have no problem with dealers collecting sales tax on this service, but it makes little sense for dealers to collect tax on the funds transfered. What do you do in the case of a gifted firearm from friend in one state to CA friend? Would you make up a value to charge the sales tax? You would charge what tax?

It makes sense that you collect tax on your transfer fee and seems to be within your responsibility to collect tax. Your transfer services ARE the item sold by you. Where or why would you collect tax on the transfer of funds between the seller and buyer when you were not the custodian of those funds? You are only a custodian for transferring the ownership of the firearm as it appears on paper only.

It would appear that you should only collect taxes on your transfer fee and nothing more. Let the buyer of the out-of-state used good worry about claiming it as the use-tax portion on their income tax, but be sure you collect and document the tax on your transfer fee.

I would say that collecting tax on your transfer fee covers your due dillgence in duty for being sure you collected sales tax in a reasonable manner. While the following oultines the responsibility, it appears that the only true tangible evidence of money changing hands by you as the dealer is your transfer fee. I don't see how further evidence is required or validated as legitimate for assessing the sales tax EXCEPT for your transfer fee price.

Question 2:
If I process a firearm transaction where an individual in my area pays another dealer for a firearm, but I handle the 10 day wait/background check and charge the individual the $25 DROS fee and possibly a $30 fee I charge, what is subject to sales tax? I know the DROS fee is not subject to sales tax. What about my $30 fee to conduct the transfer? What about the cost of the firearm? If the firearm comes from in state and the purchaser already paid tax to the original seller, this wouldn’t make any sense and would be double taxation.

Response:
If you are making delivery of a firearm to a customer on behalf of another firearms dealer located in this state, you should collect and remit sales tax on the $30 service fee you charge to the customer. This $30 service fee is considered part of the gross receipts from a retail sale and is subject to tax. You are correct that sales tax does not apply to the DROS fee. The DROS fee is imposed by the Department of Justice directly on the purchaser rather than on the retailer, so it is not considered part of your gross receipts. You would not collect tax on the sales price of the firearm because the selling dealer should have already collected the tax on the sale.

Question 3:
What if the firearm comes from out of state and the purchaser already paid the person shipping the firearm to me? I am simply a transfer dealer charging the person a $25 DROS fee imposed by the state and $30 to do the transfer. I did not sell any tangible personal property. Do I still tax the cost of the firearm? Do I tax my $30 service charge for conducting the paperwork?

Response:
If the firearm dealer is registered with the Board of Equalization, the tax will be collected by the selling dealer. When the dealer ships the firearm to you, you should obtain from the customer documentation showing the tax paid to the selling dealer. 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. Again, the $25 DROS fee is exempt from tax, but your $30 service fee is subject to tax, regardless of whether the selling dealer collects tax on the sale or not.

.

[xenophobe]

If I make a purchase over the internet, and pay the person for the goods, that is the time and place for taxation, if any, to take place.

And if you can prove that you paid tax on the item from the purchaser, you would not be required to pay sales tax when you transfer it from a California dealer. If you cannot prove that you have already paid taxes on it, it is the obligation of the California business that you receive the item from to collect the taxes.

If I die or fail to show up to do the paperwork and take posession, he cannot just sell it to someone else. He would have to ship it back from whence it came, because his business does not own it.

WRONG. If the firearm is abandoned at the place of business, the dealer in possession becomes the owner as long as the store has a policy which states that "firearms left after x days" either being subject to a daily storage fee or after a certain amount of time passes.

Try leaving a car at a dealership or mechanic for a couple of months, even if you've paid bills for service. Firearms do not need to have a lien placed.

I do not see how this is requiring or even asking him to do anything unkosher or illegal. I am not purchasing anything from him except a few minutes of his time as mandated by the state law.

The transaction is happening within the state with the services of a State and Local licensed business. You are required to pay taxes on even mail order items, if the business has one location within the state (even if you are not using that specific location to purchase or transfer.

I have read the boe statement that says they choose to believe an ffl who simply processes paperwork on a gun you didn't buy from him is somehow responsible to collect a tax on a purchase you can't prove was ever made (could have been a gift, a raffle win, a promotional offer giveaway, etc) and with no documentation of the price. Horsefeathers. Yes, there will always be those who operate so conservatively they will fall into line just because boe says "do it". Until it becomes an issue, I will do business with those who choose not to operate so conservatively. They can enact a policy that says you have to kiss their butt every time you look up at the blue sky, that doesn't mean I'm going to stand in line for the privilege. I'd be amazed, floored even, to learn of one ACTUAL case where this policy was enforced.

You are certainly King of your fairytale, but your decrees do not have any standing legal authority, no matter how much you stomp your feet and cry.

[tenpercentfirearms]

I take offense to 10%'s so-called authority on the matter. You are certainly not an authority on tax matters, and I would never do business with someone as uninformed as you who wishes to collect my dollars.

LOL. You take offense to my not wanting to be liable for your use tax if I get audited? I am sorry to hear that.

Do you further take offense to my trying to comply with the response I received from the CA BOE stating I am considered the retailer and should collect the tax? Do you also take further offense to my being instructed by my CPA that this is a very ambiguous area and there are good odds the BOE can fight with me on this and hold me liable for the tax?

That is what cracks me up. Some of you guys get all upset because good honest dealers are trying to follow what the law might say. You throw around a lot of rhetoric and posturing about how wrong or crooked the dealer is for doing what they think is required of them. You don't go look at the tax code and most of your rebuttles to this never take 6007 into consideration or any of the other tax code.

And like my CPA says, why does it matter to you if I collect the tax or if you report the tax? Obviously you guys are seeking to avoid paying your use tax or you would rather have me take care of it for you and you can use your receipt to prove you are in the clear. A customer who gets so upset that I try to follow the law so they can break it is a customer I would rather not deal with.

If that authority offends you, that is on you. I am still not going to be held liable for your use tax and any $25 transfers I lose over it are fine by me.

It's my understanding that the tax can be collected by the seller. If my seller is in another state and the invoice that comes with the shipped gun to a CA FFL says that all applicable fees & taxes have been paid then the CA FFL CAN NOT charge me tax again. and then it becomes the sellers responsibility to pay the state of CA.

The only ones hurting or upset in this situation are the CA FFL's that lose business because of their policy. I don't feel sorry for them.

IF however I buy a gun from one of them I'm happy to pay the sales tax.

You are partially correct. If the out of state guy collects 4% sales tax, then I have to collect the other 3.25%. If the seller doesn't have a retail certificate with the BOE, then they probably are not going to collect tax. And again, you make no reference to 6007 or to any tax code for that matter. You simply state "my understanding". How many more guys can come into a thread and talk about something with the aire of authority when they obviously haven't researched any of this quagmire?

I am not hurt or upset with this situation because it doesn't cost me any business. That is the other funny thing. I truly could care less if I lose a $25 transfer over my sales tax policy. You might make the argument that if guys buy these guns out of state and transfer them, then I am losing an actual sale. That would be correct, but my sales tax policy would in no way help that. The only way for me to stop guys from undercutting me out of state is to undercut myself and lower my prices.

If you are a cheap customer who wants to cut corners (note I like cheap customers as long as they follow the law) and avoid the law by not paying your use tax or getting "offended" by my trying to follow the law, I have enough other quality customers who know what good customer service is about I don't need you. I have enough repeat customers who know what kind of deals I give, know what kind of exceptional customer service we provide, and know this is a gun store you can trust. I honestly am not hurt if I lose a sale from the type of customers who actually seem to be so offended by this thread.

Come into my shop and you will see I am not a typical arrogant FFL who thinks you need me. There are plenty of other shops around and you can most certainly find another if you look hard enough. I am just not going to sit back and let you bad mouth me because I am playing the game as it was set up by the State. It is called principle and we happen to have it.

And with that said, I hate the BOE!

[bruss01]

Ten percent, as long as you have the meter running with your tax legal guy, ask him why, according to his reading of 6007 are not UPS and FED EX required by law to collect sales tax on out of state purchases they deliver to CA residents? It is the exact same scenario. They are delivering tangible goods purchased out of state. If they have an out, then so do you. I buy tons of stuff from out of state and NOT ONCE has the UPS guy ever hit me up for taxes.

[tenpercentfirearms]

Ten percent, as long as you have the meter running with your tax legal guy, ask him why, according to his reading of 6007 are not UPS and FED EX required by law to collect sales tax on out of state purchases they deliver to CA residents? It is the exact same scenario. They are delivering tangible goods purchased out of state. If they have an out, then so do you. I buy tons of stuff from out of state and NOT ONCE has the UPS guy ever hit me up for taxes.

My guess is by deliver they do not mean shipper. I would guess they clarify that a shipper has no tax burden because they simply ship the goods whereas a retail business who is part of the transaction is considered the "deliverer".

That is the problem, what does it mean to "deliver"? Who is doing the delivering? This thing is obviously not clear. but 6007 tries to make it look clear enough I don't know if I would want to spend the money required to fight it and try to place the tax burden on you when I can just do you a favor and collect your use tax and submit it to the BOE for you. That is much eaiser than you having to file it on your state income tax.

[SemiAutoSam]

Wes I dont blame you for not wanting to pay what you see as is someone else's tax If I were a FFL doing business in the PRC I'm sure I would look at it the exact same way.

And BTW if you have questions about the terms use have a look at a legal dictionary like Blacks 5th, 6th, 7th, or even the Liberal 8th edition if its all you can find.

As I see it no one has a tax burden if the only parties to the transaction are the buyer and seller no matter where they are as its a private matter.

We as humans still have the right to contract in this country and state and thats what we are doing when we purchase something from another Flesh and blood human. Or if we (the individuals not the FFL's) are seen by Government as corporations then maybe we dont have this right anymore but I hold myself out as a flesh and blood human not a corporation, I rebuke at every chance I get the association of any STRAWMAN to me.

http://www.cyberclass.net/strawman.htm

My guess is by deliver they do not mean shipper. I would guess they clarify that a shipper has no tax burden because they simply ship the goods whereas a retail business who is part of the transaction is considered the "deliverer".

That is the problem, what does it mean to "deliver"? Who is doing the delivering? This thing is obviously not clear. but 6007 tries to make it look clear enough I don't know if I would want to spend the money required to fight it and try to place the tax burden on you when I can just do you a favor and collect your use tax and submit it to the BOE for you. That is much eaiser than you having to file it on your state income tax.

[glockman19]

I said:

If my seller is in another state and the invoice that comes with the shipped gun to a CA FFL says that all applicable fees & taxes have been paid then the CA FFL CAN NOT charge me tax again.

This implies that the Correct taxes HAVE been paid you can NOT collect. Why would you even want to try?

tenpercentfirearms,
IF I were to do a FFL through you and th invoice stated "all applicable fees & taxes have been paid" Would attempt you charge me ANY tax?

[compulsivegunbuyer]

If the FFL got audited by the state, and they found lets say 40 of these out of state transactions where no tax was paid, who do you think they're going to go after? They're probably not going to go to the 40 individuals unless it's a last resort. Last resort as in you are homeless and have no money or property. They're going for the big fish here. They're going to demand payment and penalty. If you refuse to pay, or take longer than what they consider a reasonable amount of time, they will freeze your account and take it. Unlike the IRS, the state does not negotiate on past due amounts, you owe, you pay. Now, someones going to say, "they can't do that" They can, and they will. If you have a dispute, you hire a lawer and fight it out after the fact. If I were a dealer not charging tax, I would definitly be forwarding your purchase information to the BOE to CMA. Realy, the only reason you would complain here is because your intention is to not pay the use tax. Not only do you intend not to pay, but you intend for someone else to pick up the tab should the state come looking to collect the money. Hmmm, sounds alot like WELFARE.

[SemiAutoSam]

I suppose you didn't think of the unconstitutional basis of USE TAX.

I dont see it authorised in the California Constitution.

If the FFL got audited by the state, and they found lets say 40 of these out of state transactions where no tax was paid, who do you think they're going to go after? They're probably not going to go to the 40 individuals unless it's a last resort. Last resort as in you are homeless and have no money or property. They're going for the big fish here. They're going to demand payment and penalty. If you refuse to pay, or take longer than what they consider a reasonable amount of time, they will freeze your account and take it. Unlike the IRS, the state does not negotiate on past due amounts, you owe, you pay. Now, someones going to say, "they can't do that" They can, and they will. If you have a dispute, you hire a lawyer and fight it out after the fact. If I were a dealer not charging tax, I would definitely be forwarding your purchase information to the BOE to CMA. Realy, the only reason you would complain here is because your intention is to not pay the use tax. Not only do you intend not to pay, but you intend for someone else to pick up the tab should the state come looking to collect the money. Hmmm, sounds alot like WELFARE.

[glockman19]

If the FFL got audited by the state, and they found lets say 40 of these out of state transactions where no tax was paid, who do you think they're going to go after?

How will they know if the Out-Of-State FFL paid or not? They won't and the CA FFL won't be liable for paying CA the selling FFL will be. It's a Win-Win.

They could ONLY go after the out-of-state-seller who's invoice stated "ALLAPPLICABLE FEES TAXES HAVE BEEN PAID".

I find you CA FFL's part of the overall problem and why gun controll WILL continue to perpetuate in CA. Because you're all just a bunch of good soldiers following direction from your "higher up's". You sound like the german soldier who was "just following orders" in WWII. When you're out of business you'll have no one to blame but yourselves for towing the line.

Let's not forget that the reason we buy from Out-of-state FFL's is because they have lower prices. I always ask my CA FFL if they will match the price. I always get some sob story as to why they can't.

I'll continue to get the best deal wherever I can.