More Tax Stuff-question

[Tyke8319]

Would the "credit card surcharge" (i.e. $12.00) on an "out-of-state" purchase be part of the use tax charged to the customer?

[acespawnshop]

whatever the total cost was to get the item to you....

[ronlglock]

whatever the total cost was to get the item to you....

We charge whatever the customer paid for the thing we are transferring — including whatever is listed as a credit card surcharge, sometimes it is listed as a lost cash discount.

We don’t charge tax on shipping. Should we?

[ugimports]

We were told if it is listed as "Shipping" -- no tax
listed as "Shipping & Handling" -- tax
If it's "Shipping & <anything else>" -- tax
If shipping is "included" in the price on the invoice and not itemized -- tax

[Tyke8319]

Thank you...

[Tyke8319]

Some input from a contributor:

I saw your thread on sales tax on a CA sale, there is quite a bit of bad info in that thread.

The transfer fee is only subject to sales tax if the firearm is subject to sales tax. The CA retailer is the one responsible for the sales tax on the transfer fee, not the transfer dealer unless the seller isn't a CA retailer.

A sale of a firearm with a CA buyer and seller isn't subject to sales tax if the sale is a private sale, an occasional sale and not from a business. It has nothing to do whether it is a CA PPT or not.

A CA PPT is subject to sales tax if the FFL finds the buyer or seller or gets involved with the price, as well if the seller is selling a lot of firearms, it would be subject to sales tax.

CA claims that due to Federal law requiring a firearm to be transferred to a CA FFL from an out of state seller makes it subject to sales tax, but a C&R firearm where the buyer has a C&R FFL and it is from a private party and an occasional sale and not from a business, then it wouldn't be subject to sales tax.
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I winder if there will ever be a consensus on "what is and what is not taxable"?

[acespawnshop]

I’ll agree with those situations outlined above.

[Tyke8319]

Some additional follow-up info.
***********************

UGIMPORTS is incorrect in terms of sales tax and shipping. Shipping isn't subject to sales tax, but ONLY if the item is shipped directly to the person. In the case of FFLs, firearms are not shipped to the person, so shipping is subject to sales tax in all cases. The complete total cost of the item is subject to sales tax.

Consider items in a store, part of the cost is shipping, but the whole cost is subject to sales tax. If s company does a special order and has it delivered to the store and there is a separate charge for shipping, it is all subject to sales tax. If instead the special order item is shipped directly to the customer, then shipping wouldn't be subject to sales tax.

[ugimports]

Some additional follow-up info.
***********************

UGIMPORTS is incorrect in terms of sales tax and shipping. Shipping isn't subject to sales tax, but ONLY if the item is shipped directly to the person. In the case of FFLs, firearms are not shipped to the person, so shipping is subject to sales tax in all cases. The complete total cost of the item is subject to sales tax.

Consider items in a store, part of the cost is shipping, but the whole cost is subject to sales tax. If s company does a special order and has it delivered to the store and there is a separate charge for shipping, it is all subject to sales tax. If instead the special order item is shipped directly to the customer, then shipping wouldn't be subject to sales tax.

I'm trying to find out where I got the info I got...I don't think I made it up

ETA: I'm still looking, but when I read: https://www.cdtfa.ca.gov/lawguides/v.../495-0843.html
I noticed it says:

The retailer should collect use tax on the invoice price of the firearm, plus the service fee, even if paid directly to the firearm dealer by the customer.

It didn't say anything about shipping... I'm still trying to find out where I thought that "shipping" as a line item vs "shipping/handling" was a distinction as I know the above code wouldn't have made me think that. I'll do more research tonight and try to find the source I used. It's possible I got the info from a customer that worked for BOE (which I guess would be 'unofficial').

[Tyke8319]

Additionally:

Quote:
When a California Federal Firearms Licensed (FFL) dealer transfers a firearm for an out-of-state retailer that is not engaged in business with California the FFL dealer doing the transfer is deemed the retailer of the firearm (RTC section 6007, see below). However, in this scenario the out-of-state retailer is registered (i.e., engaged in business with this state) to collect and remit tax to the CDTFA and remains the party responsible for collecting and remitting the proper amount of use tax. The proper tax rate is at the instate FFL dealer’s location, because the out-of-state retailer shipped their product to a person (FFL dealer) in a California district to complete the transfer. The gross receipts/taxable measure includes the sales price of the firearm, the shipping charge into California, the handling fee, and other expenses of the retailer passed onto the purchaser, but it does not include the Dealers Record of Sale (DROS) fee, and that is because the fee is imposed on the purchaser rather than the seller.

[acespawnshop]

I agree with UG the price to ship is also taxable.

[Tyke8319]

More definitive TAX stuff from a knowledgeable source:

Quote:
Sales and Use Tax Regulation 1628, Transportation Charges, provides in pertinent part in subdivision (a) that in the case of a sale, whether by lease or otherwise, tax does not apply to “separately stated” charges for transportation of property from the retailer’s place of business or other point from which shipment is made “directly to the purchaser,” provided the transportation is by other than facilities of the retailer, i.e., by United States mail, independent contract or common carrier. The amount of transportation charges excluded from the measure of tax shall not exceed the cost of the transportation to the retailer.

Transportation charges will be regarded as “separately stated” only if they are separately set forth in the contract for sale or in a document reflecting that contract, issued contemporaneously with the sale, such as the retailer’s invoice. The fact that the transportation charges can be computed from the information contained on the face of the invoice or other document will not suffice as a separate statement. If a separately stated charge is made designated “postage and handling” or “shipping and handling”, only that portion of the charge which represents actual postage or actual shipment may be excluded from the measure of tax. Such amounts may be excluded from the measure of tax even though such amounts are not affixed to, or noted on, the package. A separately stated charge designated “handling” or “handling charge” is not a separate statement of transportation charges. Tax applies to such charges, notwithstanding the fact that postage or shipment charges may or may not be affixed to or noted on the package.

Property will not be considered delivered "directly to the purchaser" if it is shipped to the retailer, to the retailer's agent or representative, or to anyone else acting in the retailer's behalf. Any separately stated charges by the retailer for the transportation of property to, rather than from, the retailer's place of business, or to another point from which the property will then be "delivered directly to the purchaser," are included in the measure of tax. Such charges represent incoming freight and are taxable as part of the cost of the property sold by the retailer. (Emphasis added).

Thus, in accordance with Regulation 1628, separately stated freight charges for transportation of the firearm from the out-of-state retailer by common carrier directly to the California FFL dealer (commonly referred to as freight-in) are subject to sales tax as the firearm is not shipped “directly to the purchaser.” Therefore, when an out-of-state retailer ships the firearm to you for registration and transfer to a purchaser in California, these shipping charges are subject to sales tax.

[GoingQuiet]

LOL

[acespawnshop]

Good stuff. Sounds right to me.

[XxWoodsHunterxX]

Just tax the firearm on what the receipt total is and be done with it. Why screw with all the Mumbo jumbo. Better to be safe than sorry


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