Raffle Prize Firearm - Sales Tax?

[WoodlandGoldandSilver]

Do I have to collect sales tax on the transfer of a firearm that was won in a raffle? If so, how do you determine the value as to collect it?

[LowThudd]

Yes. The MSRP is all that can be used to determine tax, unless the contest places a value on it.

[halifax]

Usually, I've found that the sponsors paid the tax when they bought it for the raffle. Check that first.

[SkyHawk]

I don't think you have to collect tax. Tax is not required when Glock certificates are used, and those are won in competition. And I have won an out of state drawing and paid no tax.

If the customer paid no money, how could there be a sales tax? It might be argued the customer is on the hook for USE tax, but that is not the concern of a FFL.

And no, charging tax based on retail price is a bad idea - no one ever pays MSRP. All around, seems very unfair to a winner if someone tries to jam them for sales tax at MSRP.

[LowThudd]

I don't think you have to collect tax. Tax is not required when Glock certificates are used, and those are won in competition. And I have won an out of state drawing and paid no tax.

If the customer paid no money, how could there be a sales tax? It might be argued the customer is on the hook for USE tax, but that is not the concern of a FFL.

And no, charging tax based on retail price is a bad idea - no one ever pays MSRP. All around, seems very unfair to a winner if someone tries to jam them for sales tax at MSRP.

It is a use tax, and if the company giving the prize doesn't pay the tax, the winner must. This has been in the last few years that the BOE has been coming down on FFLs, so in the past things may have been different. Here is the thread I posted with more responses from FFLs. http://www.calguns.net/calgunforum/s....php?t=1112402

[kemasa]

As I recall, it is the responsibility of the organization to pay the sales tax, not the person who wins it. There are issues as to how it gets to CA. If it is shipped, then the shipper does not owe sales tax, buf if they bring it to CA personally, then they owe sales tax. The bottom line is that I don't recall it is the responsibility of the FFL to collect the sales tax.

You might want to call the CA BOE to get an answer.

[LowThudd]

As I recall, it is the responsibility of the organization to pay the sales tax, not the person who wins it. There are issues as to how it gets to CA. If it is shipped, then the shipper does not owe sales tax, buf if they bring it to CA personally, then they owe sales tax. The bottom line is that I don't recall it is the responsibility of the FFL to collect the sales tax.

You might want to call the CA BOE to get an answer.

Hm. The reason I asked previously is because the Springfield Armory contest stated that the winners were responsible for all taxes. I assumed they meant Use tax, but perhaps they meant income?

[kemasa]

Most likely income tax.

[WoodlandGoldandSilver]

Thanks for the great responses everyone, appreciate it!