11% excise tax

[Supersapper]

I agree with that, they cannot charge you the 11% tax before July 1.

I'll repeat this because of the 2 topic fiasco, I believe the reason for the "store's rule" is to eliminate the idea that customers can buy guns before July 1 and dros them one at a time, 30 days apart, after July 1, as was done with single shot exemption.

I'm also pretty sure that any 11% tax collected on guns that are purchased before July 1, is going right to profit and will not be included in the sales tax collection.

And on that note, what I'm saying is that the stores I'm seeing are NOT charging the 11% prior to 01JUL24 and I refer back to my example of the $1000 gun. They're going to have to figure out how to charge the 11% at the day of pick up. As far as where you talked about eliminating purchasing guns before 01JUL24 or requiring DROS 1 at a time, 30 days apart. No gun store I've been in recently has said, or even intimated, anything like that.

[JOLLYROGER]

Does it apply to reloading like powder, primers, or bullets?

[smittty]

I just know that if you begin DROS on a $1000 pistol on, say 23JUN24, they can not charge you the $110 extra until 01JUL24 and you even so state that in post #127. The 3 LGSs I've been to said they will get that 11% upon pick up if the date is afterward.

I agree with that, they cannot charge you the 11% tax before July 1.

I'll repeat this because of the 2 topic fiasco, I believe the reason for the "store's rule" is to eliminate the idea that customers can buy guns before July 1 and dros them one at a time, 30 days apart, after July 1, as was done with single shot exemption.

I'm also pretty sure that any 11% tax collected on guns that are purchased before July 1, is going right to profit and will not be included in the sales tax collection.

[Supersapper]

I did not say it's imposed at time of dros, I said the opposite, and I made that clear in the other 11% topic but maybe you didn't see that.

And now I see that both topics were combined!

I may have tried to be a bit too circumspect about my response. I was going on the statement you made that said the register needed a quantity to charge the 11% to, ie:

The register needs a quantity and purchase amount to apply the tax to. Think about that.

If they were to charge the tax after the initial sale in the register, they would have to cancel the original sale and process it as a new sale with the new tax rate. The register cannot apply 11% to a quantity of zero.

What Turners and others like them are doing is choosing a date at which they are changing the tax rate in their register, and eliminating the option for customers to buy more guns than they can dros before July 1.

I addressed how they might handle it but did that elsewhere, so maybe I should have been a little better about combining topics.

[smittty]

Smittty,

Then there are quite a few gun stores that will have some issues. You CAN'T charge the upgraded rate prior to 01JUL24. Period. But Trapped is right...this isn't 100% clear on how they're going to do it. I'm not overthinking it at all...especially since you made the statement that the sales tax (or whatever this thing is being called now) is imposed at time of DROS. I disagree based on all of the signs I'm seeing at the LGSs in my area. I'm just trying to put some sort of sense to the silliness, if that's even possible anymore in this state. In the end, the register will spit out what it's told and it will probably be an additional receipt with a line item on it that says something about it being related to the DROS dated [insert date] or some such.

I just know that if you begin DROS on a $1000 pistol on, say 23JUN24, they can not charge you the $110 extra until 01JUL24 and you even so state that in post #127. The 3 LGSs I've been to said they will get that 11% upon pick up if the date is afterward.

I did not say it's imposed at time of dros, I said the opposite, and I made that clear in the other 11% topic but maybe you didn't see that.

And now I see that both topics were combined!

[Supersapper]

You're defining the sale as something more complicated than it is and that doesn't help explain how or why the tax is charged.

Now that I've thought about this, I believe Turner's and others like them have eliminated the hassle of managing and storing guns purchased now to beat the new tax on guns intended to be dros'd after July 1.

The register needs a quantity and purchase amount to apply the tax to. Think about that.

If they were to charge the tax after the initial sale in the register, they would have to cancel the original sale and process it as a new sale with the new tax rate. The register cannot apply 11% to a quantity of zero.

What Turners and others like them are doing is choosing a date at which they are changing the tax rate in their register, and eliminating the option for customers to buy more guns than they can dros before July 1.

Considering it from a business standpoint, I would do the same.

Smittty,

Then there are quite a few gun stores that will have some issues. You CAN'T charge the upgraded rate prior to 01JUL24. Period. But Trapped is right...this isn't 100% clear on how they're going to do it. I'm not overthinking it at all...especially since you made the statement that the sales tax (or whatever this thing is being called now) is imposed at time of DROS. I disagree based on all of the signs I'm seeing at the LGSs in my area. I'm just trying to put some sort of sense to the silliness, if that's even possible anymore in this state. In the end, the register will spit out what it's told and it will probably be an additional receipt with a line item on it that says something about it being related to the DROS dated [insert date] or some such.

I just know that if you begin DROS on a $1000 pistol on, say 23JUN24, they can not charge you the $110 extra until 01JUL24 and you even so state that in post #127. The 3 LGSs I've been to said they will get that 11% upon pick up if the date is afterward.

[TrappedinCalifornia]

My local FFL has not received instructions from DOJ or California, so those retailers are making up their own rules.

If it's a sales tax applied at time of purchase, then the sales register portion of the transaction is complete, the pickup date is irrelevant.

I could understand Turner's position based on how they sell their guns, you go there "order" the gun and after it arrives you go come back to the store to finish buying the gun with verifiable serial number and then you start the waiting period.

An FFL with guns available in the store doesn't have the first "order" step that turners has. If the guns are in the store you can buy more than one and then dros them 30 days apart, and not be hit with the 11% tax.

It would be a huge pita for FFL's to manage this so I can understand the reason for making their own rules, to avoid this hassle.

As I said, it's too vague at the moment.

Remember, the bill's language states: "...impose an excise tax in the amount of 11% of the gross receipts from the retail sale in this state of a firearm, firearm precursor part, and ammunition, as specified..."

That gets you into when is the 'retail sale' completed; i.e., at the time of the actual sale or upon delivery of the firearm. That becomes an issue. The actual sale is generally completed prior to DROS being run. DROS may or may not be considered part of the sale as it is, in actuality, a 'permission slip' from Government for the buyer to actually take possession. The actual sale may or may not be considered as when the money is exchanged.

So, how does the retailer report a 'completed sale?' I don't know when it comes to firearms. How does the State Government assess taxes due when it comes to sales tax? Clearly based on the actual sales. What about assessment on the excise tax? I'm not sure anyone, including the State Government, knows that yet. If they do, I don't remember seeing it shared.

Again, we all expected this 'tax' to be passed on to the consumer, at some point. Yet, the bill itself and the way they've been 'selling it' to the public states that it's a tax on firearm and ammunition retailers based on the idea of being granted the "privilege" of engaging in 'certain activities.' Okay. Where does 'privilege' end and 'right' begin when it comes to a Constitutionally-protected activity? Where is the tax considered to be on the consumer, even if the language says 'retailer,' in that the normal course of business dictates that it will be passed on from the retailer to the consumer? For instance, if the tax is on the "gross receipts from the retail sale," then that means, by definition, that it includes the consumer and isn't just a tax on the wholesale amount.

What was that about taxing a Constitutional right?

This is where things get 'confusing,' at least for me. If it is an excise tax, then it's not a sales tax. This is why it will be a separate line on the receipt. However, if the tax is on the retailer rather than the consumer, then it shouldn't necessarily be anything seen by the consumer, even if, as we know, business-wise, it will be passed on from the retailer to the consumer. In that sense, the line on the receipt is more of an 'accounting gimmick' not only showing the differentiation, but alerting and engaging/enraging the consumer. These are all things which will have to be fought over in the inevitable court challenge.

Insofar as the 'hassle' of storing, running DROS, and differentiating between sales prior to 1 July and post that date, such would usually, at least in business terms, see a cost imposed on the consumer to offset whatever costs the retailer endures. Thus, especially for major retailers, the decision process may have come down to impose the 11% excise tax based on date of DROS or impose a fee to cover the costs endured by the retailer. Who knows?

[smittty]

We will find out either way once July 1 rolls around and people begin picking up their purchases. I'm sure most of us will be able to start a DROS by ~June 20 to fit it in the window, some won't and will have to roll the dice on whatever happens in July.

The new tax date is effective July 1, Turner's cannot charge you 11% before that date.

It appears they are stopping any idea of customers buying more guns than they can dros before July 1. People did this when single shot exemption was ending, and they know better than to repeat that.

[smittty]

Smttty,

See post 48. I think this is where the LGS's are going. My LGS will apply the tax after 01JUL24 because that's when it can be done. Since the gun you buy can't be picked up before the date, then you'll pay the tax at pickup after the 1st.

The pick up date is NOT irrelevant because it's a part and parcel to the "contract" terms and conditions. All "contractual agreements" must adhere to the law or they are null and void. Goods (guns in this case) can not be delivered until at least 10 days from the date of signing of the initial agreement, which is when the final signatures are obtained to conclude terms and conditions. If the law changes while a contract is in the process of being executed, then the contract terms and conditions must be changed to match the law.

IANAL, but just some GoogleFu regarding contractual obligations under the law is where I got most of this and it makes sense. I know it'a ll true in construction contracts and in personal agreements, so it stands to reason. If any of the resident legal beagles can show me how I'm wrong, I am absolutely happy to modify my opinion, but this is what's making the most sense to me.

You're defining the sale as something more complicated than it is and that doesn't help explain how or why the tax is charged.

Now that I've thought about this, I believe Turner's and others like them have eliminated the hassle of managing and storing guns purchased now to beat the new tax on guns intended to be dros'd after July 1.

The register needs a quantity and purchase amount to apply the tax to. Think about that.

If they were to charge the tax after the initial sale in the register, they would have to cancel the original sale and process it as a new sale with the new tax rate. The register cannot apply 11% to a quantity of zero.

What Turners and others like them are doing is choosing a date at which they are changing the tax rate in their register, and eliminating the option for customers to buy more guns than they can dros before July 1.

Considering it from a business standpoint, I would do the same.

[Supersapper]

My local FFL has not received instructions from DOJ or California, so those retailers are making up their own rules.

If it's a sales tax applied at time of purchase, then the sales register portion of the transaction is complete, the pickup date is irrelevant.

Smttty,

See post 48. I think this is where the LGS's are going. My LGS will apply the tax after 01JUL24 because that's when it can be done. Since the gun you buy can't be picked up before the date, then you'll pay the tax at pickup after the 1st.

The pick up date is NOT irrelevant because it's a part and parcel to the "contract" terms and conditions. All "contractual agreements" must adhere to the law or they are null and void. Goods (guns in this case) can not be delivered until at least 10 days from the date of signing of the initial agreement, which is when the final signatures are obtained to conclude terms and conditions. If the law changes while a contract is in the process of being executed, then the contract terms and conditions must be changed to match the law.

IANAL, but just some GoogleFu regarding contractual obligations under the law is where I got most of this and it makes sense. I know it'a ll true in construction contracts and in personal agreements, so it stands to reason. If any of the resident legal beagles can show me how I'm wrong, I am absolutely happy to modify my opinion, but this is what's making the most sense to me.

[smittty]

It's not just Turners. There are a good number of companies which are going with 30 June as the pickup or else date.

One possible explanation had to do with how a company reported earnings.

My suspicion is that it's 'too vague' and many companies don't want to 'risk' getting hammered for fees they didn't collect, even though the 'tax' itself isn't supposed to be (ahem) on the end consumer.

Let's just say the local shops are nervous about what this is going to do to sales. Remember, California is on the verge of killing the fast food industry. Why not the gun/ammo industry they actually hate?

My local FFL has not received instructions from DOJ or California, so those retailers are making up their own rules.

If it's a sales tax applied at time of purchase, then the sales register portion of the transaction is complete, the pickup date is irrelevant.

I could understand Turner's position based on how they sell their guns, you go there "order" the gun and after it arrives you go come back to the store to finish buying the gun with verifiable serial number and then you start the waiting period.

An FFL with guns available in the store doesn't have the first "order" step that turners has. If the guns are in the store you can buy more than one and then dros them 30 days apart, and not be hit with the 11% tax.

It would be a huge pita for FFL's to manage this so I can understand the reason for making their own rules, to avoid this hassle.

[ProfChaos]

It's not just Turners. There are a good number of companies which are going with 30 June as the pickup or else date.

One possible explanation had to do with how a company reported earnings.

My suspicion is that it's 'too vague' and many companies don't want to 'risk' getting hammered for fees they didn't collect, even though the 'tax' itself isn't supposed to be (ahem) on the end consumer.

Let's just say the local shops are nervous about what this is going to do to sales. Remember, California is on the verge of killing the fast food industry. Why not the gun/ammo industry they actually hate?

It sucks cause even some of the better FFLs are going along with this.

Thinking about this. If this was a tax on the item, then it should only apply to inventory received by the FFL after July 1st. Inventory currently on hand should not be subject to this.

[TrappedinCalifornia]

It sounds to me that Turners has made up the rule for when the tax is applied. If you bought the gun before the tax date but picked it up after July 1 and they then charge you the tax at pu they would be keeping that 11% for themselves.

Sneaky bastards!

It's not just Turners. There are a good number of companies which are going with 30 June as the pickup or else date.

One possible explanation had to do with how a company reported earnings.

My suspicion is that it's 'too vague' and many companies don't want to 'risk' getting hammered for fees they didn't collect, even though the 'tax' itself isn't supposed to be (ahem) on the end consumer.

Let's just say the local shops are nervous about what this is going to do to sales. Remember, California is on the verge of killing the fast food industry. Why not the gun/ammo industry they actually hate?

[smittty]

It sounds to me that Turners has made up the rule for when the tax is applied. If you bought the gun before the tax date but picked it up after July 1 and they then charge you the tax at pu they would be keeping that 11% for themselves.

Sneaky bastards!

[DCoakley]

I believe someone else already posted this but just in case you have not heard Target Sports USA will be implementing the 11% tax on Ammo. I hate this state!