How is 11% add on tax apply ?

[Dvrjon]

So taxing a tax. I thought that was illegal on face value.

Too young to remember the Revenue and Expenditure Control Act of 1968 which created a temporary 10 percent income tax surcharge for both individuals and corporations through June 30, 1969, to help pay for the Vietnam War?

[abinsinia]

I wonder if it would be better if you send the gun to a gunsmith first and have it stripped down to just a lower, and have the gunsmith throw away the recipe. Then they have no idea what the value of the item is and they will need to ask you to tell them how much it costed. Rifles only I guess.

[RP1911]

Ugh. I have a few sitting at my dealer due to 1 in 30 day rule. All of these are pre-owned except one (new from dealer) and were purchased from out of state from non-ffls. This is going to put a huge hurt on funds.

[prk]

So who's going to be the first to charge $1.00 for a $800 gun and $799 for a pen rental fee?

From the state's site:

"For the purposes of FET gross receipts include the sales price of the firearms, firearm precursor parts, or ammunition and all charges related to the sale, such as any business expense separately added to any taxable sale listed separately on the invoice or receipt provided to the purchaser."

[prk]

I just want to know if the CA FFL is only transferring the firearm (from, say, an out-of-state dealer) to me, does the 11% tax apply?

[crisp3]

What does the new 11% extortion tax actually apply to. Everything I have read says guns and ammo, but does that include parts, scopes, uppers? I have not seen anything detailing what is all included. Thanks for your assistance.

[Dvrjon]

What does the new 11% extortion tax actually apply to. Everything I have read says guns and ammo, but does that include parts, scopes, uppers? I have not seen anything detailing what is all included. Thanks for your assistance.

Two posts above yours answers.

[oscfifteen]

[Dvrjon]

CHAPTER 2. Imposition and Rate of Tax
36011.
Commencing July 1, 2024, an excise tax is hereby imposed upon licensed firearms dealers, firearms manufacturers, and ammunition vendors, at the rate of 11 percent of the gross receipts from the retail sale in this state of any firearm, firearm precursor part, or ammunition.

[FourT6and2]

That sucks, sorry.

Why would you buy bulk ammo on GunBroker, though? That's like buying brand new stuff from a retailer on eBay. You're gonna get hosed and pay all sorts of fees... Just buy directly from a retailer instead of using a middle-man auction site.

[Quiet]

I just want to know if the CA FFL is only transferring the firearm (from, say, an out-of-state dealer) to me, does the 11% tax apply?

Yes.

The 11% excise tax is collected by a CA FFL dealer, CA firearms manufacturer, or CA DOJ licensed ammunition vendor for a retail sale of a firearm, firearm precursor part, or ammunition that is conducted within CA. [RTC 36011]

In order to be considered a retail sale, the item (firearm, ammo) needs to be from the CA FFL dealer/ammo vendor's inventory. [RTC 36001(i) and 6007(a)]

A PPT would not be a retail sale, because the item does not come from the CA FFL dealer's inventory.
~A PPT is a face to face transfer between CA residents facilitated by a CA FFL dealer.
^If the firearm is shipped, then it is not a PPT. If one of the parties involved is a non-resident of CA, then it is not a PPT.

If the firearm/ammunition is shipped to the CA FFL dealer/ammo vendor, then it would be a retail sale because the item will first be entered into the CA FFL dealer/ammo vendor's inventory before being transferred. [RTC 6007(a)(2)]




Revenue and Taxation Code 36011
Commencing July 1, 2024, an excise tax is hereby imposed upon licensed firearms dealers, firearms manufacturers, and ammunition vendors, at the rate of 11 percent of the gross receipts from the retail sale in this state of any firearm, firearm precursor part, or ammunition.

Revenue and Taxation Code 36001Revenue and Taxation Code 6007

[Quiet]

Your FFL is not selling the ammo and it is not part of their gross receipts. At best, one might be able to charge the tax on their transfer fee.

What was the explanation as to how a law can be applied prior to its effective date?

CA ammunition laws requires ammunition sold to a non-exempt person to be transferred through a CA FFL dealer/ammunition vendor [PC 30312(a)(b)]

CA ammunition laws requires ammunition that is bought online from an out-of-state vendor to be shipped to a CA FFL dealer/ammunition vendor for transfer to the CA resident that bought the ammunition. [PC 30312(b)]

Because the ammunition is shipped to a CA FFL dealer/ammunition vendor for redelivery/transfer to a CA resident, it meets the CA definition of a "retail sale" [RTC 6007(a)(2)] and the 11% excise tax applies. [RTC 36011]

This does not apply to a CA resident that is an exempt person, because there are no laws that requires ammunition to be shipped to a CA FFL dealer/ammunition vendor for transfer to them. [PC 30312(c) and 30314(b)]

There are also no laws that require an out-of-state vendor to collect the 11% excise tax; because legally only CA FFL dealers, CA firearm manufacturers, and CA ammunition vendors are required to collect the 11% excise tax on retail sales that they conduct within CA. [RTC 36011]




Penal Code 30312however, that ammunition may be purchased or acquired over the Internet or through other means of remote ordering if a licensed ammunition vendor initially receives the ammunition and processes the transaction in compliance with this sectionPenal Code 30314Revenue and Taxation Code 36011
Commencing July 1, 2024, an excise tax is hereby imposed upon licensed firearms dealers, firearms manufacturers, and ammunition vendors, at the rate of 11 percent of the gross receipts from the retail sale in this state of any firearm, firearm precursor part, or ammunition.

Revenue and Taxation Code 36001

Revenue and Taxation Code 6007
(a)(1) means a sale for a purpose other than resale in the regular course of business in the form of tangible personal property.
(2) 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.

[BigMac90660]

If it is an excise tax, shouldn't it be based on the wholesale price of the gun, precursor part, or ammunition that the dealer pays to the distributor? Not based on the final retail price of the item?

[Quiet]

If it is an excise tax, shouldn't it be based on the wholesale price of the gun, precursor part, or ammunition that the dealer pays to the distributor? Not based on the final retail price of the item?

Revenue and Taxation Code 36011
Commencing July 1, 2024, an excise tax is hereby imposed upon licensed firearms dealers, firearms manufacturers, and ammunition vendors, at the rate of 11 percent of the gross receipts from the retail sale in this state of any firearm, firearm precursor part, or ammunition.

Revenue and Taxation Code 36001
For purposes of this part:?
(e)

Revenue and Taxation Code 6012
(a) or lease or rental price, as the case may be, of the retail sales of retailers, valued in money, whether received in money or otherwise, without any deduction on account of any of the following:
(1) The cost of the property sold. However, in accordance with any rules and regulations as the board may prescribe, a deduction may be taken if the retailer has purchased property for some other purpose than resale, has reimbursed his or her vendor for tax which the vendor is required to pay to the state or has paid the use tax with respect to the property, and has resold the property prior to making any use of the property other than retention, demonstration, or display while holding it for sale in the regular course of business. If that deduction is taken by the retailer, no refund or credit will be allowed to his or her vendor with respect to the sale of the property.
(2) The cost of the materials used, labor or service cost, interest paid, losses, or any other expense.
(3) The cost of transportation of the property, except as excluded by other provisions of this section.
(4) The amount of any tax imposed by the United States upon producers and importers of gasoline and the amount of any tax imposed pursuant to Part 2 (commencing with Section 7301) of this division.
?(b) The total amount of the sale or lease or rental price includes all of the following:
(1) Any services that are a part of the sale.
(2) All receipts, cash, credits and property of any kind.
(3) Any amount for which credit is allowed by the seller to the purchaser.


?

[BigMac90660]

So, not really an excise tax, a sales tax. That the state is trying to call an excise tax.