Tax on non-normal PPT?

[flyinverted]

LGS has inventory from a court ordered surrender of a CA resident.

I purchased one, the DROS was performed as a PPT, and sales tax was charged. Is that right?

Guns never left CA.

The FFL acted as the agent for the seller, had the inventory on his books. Is that why tax was charged? Should it have been charged?

[doggie]

Sounds wrong to me.

[SkyHawk]

Sounds correct to me. Tax is also charged on consignments, which are DROSd as PPT between Ca residents. Tax is charged because the FFL is acting as the agent, holding the inventory, and can transfer it on behalf of the owner.

[autopro]

I am not saying it's correct but I have purchased 4 guns on consignment from 4 different FFL's and have never been charged sales tax.

[doggie]

When I consign a gun at my local FFL, he tells me that there's no tax on the gun, which makes it more attractive to potential buyers.

[SkyHawk]

So as per usual, the anecdotal experience of some folks does always not equal a gospel.

https://www.boe.ca.gov/formspubs/pub114/

I sell items placed with me on consignment. When is my consignment sale considered a retail sale?
You are responsible for obtaining a seller’s permit and paying the sales tax on the retail selling price of consignment sales when you:

• Have possession or control of the item you are selling, and
• Can transfer ownership or use of the item to the buyer without further action on the part of the owner.

For example, you may own a jewelry store where you sell jewelry on consignment. Typically, the owner of the jewelry will bring it to you and sign an agreement that authorizes you to sell the item and transfer ownership to the buyer. You are considered the retailer of jewelry you sell in this way and must pay sales tax based on your retail selling price.

[doggie]

https://www.boe.ca.gov/formspubs/pub114/

Interesting. So either my local FFL is lying to me, or he has a loophole.

[SkyHawk]

Interesting. So either my local FFL is lying to me, or he has a loophole.

Or he just doesn't know, or he is willing to cover the sales tax from his commission.

[doggie]

Or he just doesn't know, or he is willing to cover the sales tax from his commission.

I don't know. He's very smart. He recently snagged one of those special coveted LEO dealer "franchises" where he sells to LEOs, so he definitely knows his stuff.

[flyinverted]

I'll add the gun was NOT on the Roster.

* It doesn't have to be because it's a PPT, not a dealer sale.
* Then why charge tax? Because the dealer is selling the gun.
* But it's not a dealer sale and doesn't affect my 1-in-30 status

See how it is and it isn't a dealer sale, depending who wants the money.

I'm happy with the gun. Not happy that the state taxed the original buyer's income. Then taxed him again to buy the gun, then taxed me to buy the gun again.

[freonr22]

Ask Kemasa as well.

SkyHawk and the Ffl group as a whole have multiple be threads in this very forum

[kemasa]

If the FFL gets involved with finding the buyer/seller or gets involved with the sales price, it is subject to sales tax, even if it what you consider a normal CA PPT. Consignments are subject to sales tax.

Experience does not equal what is legal. You see people speeding all the time, but that does not make it legal.

The FFLs who don't collect sales tax may get a surprise if audited. You can try informing them, for their own protection, but they might not listen.

[kemasa]

Oh, how the DROS is done does not change reality. An interstate transfer is done as a dealer sale, but it isn't. A consignment is done as a PPT, but it isn't.

[taperxz]

I don't know. He's very smart. He recently snagged one of those special coveted LEO dealer "franchises" where he sells to LEOs, so he definitely knows his stuff.

Know one no's everything.

[autopro]

It would appear that Skyhawk and Kemasa are correct that sales tax should be collected on consignment purchases. It would also appear there are FFL's that don't understand that or don't care.