Taxes on 'Prize' guns?

[LowThudd]

Just curious if the winner of a contest where the prize is a firearm must pay sales tax to the FFL? I know the income must be reported, but is the sales tax required to be paid at the time of DROS?

[ASD1]

yes
The BOE makes the FFL collect any and all taxes due

[halifax]

If the prize givers have a presence in CA (e.g., NRA) they are responsible for the sales tax not you.

[thetaxman]

From memory, I think it depends if the prize was awarded under a game of chance/skill or not.

If it falls under the skill/chance category then typically the person operating the game or contest is treated as being the consumer of the product in CA and Use Tax applies, but no Sales Tax on the transfer to the winner.

I'm sure there is a CA BOE regulation on this, but I haven't looked at this in 5+ years.

I can probably get the specific ruling/regulation if it's needed. Just let me know.

[smoothang21]

From memory, I think it depends if the prize was awarded under a game of chance/skill or not.

If it falls under the skill/chance category then typically the person operating the game or contest is treated as being the consumer of the product in CA and Use Tax applies, but no Sales Tax on the transfer to the winner.

I'm sure there is a CA BOE regulation on this, but I haven't looked at this in 5+ years.

I can probably get the specific ruling/regulation if it's needed. Just let me know.

How would it work cuz I was thinking on doing a drawing