Sales tax on consignments

[nick]

Hi,


I'm planning to talk to Turner's new management about the sales tax they charge on consignments. Since consignments are effectively PPTs, there should be no sales tax charged on them, right?

Please, correct me if I'm wrong, and if not, I'd appreciate it if you point me at some regulations which state that sales tax shouldn't be charged on consignments.


Thanks,


nick

[halifax]

Hi,


I'm planning to talk to Turner's new management about the sales tax they charge on consignments. Since consignments are effectively PPTs, there should be no sales tax charged on them, right?

Please, correct me if I'm wrong, and if not, I'd appreciate it if you point me at some regulations which state that sales tax shouldn't be charged on consignments.


Thanks,


nick

If the FFL facilitates the sale in any way (other than just doing the paperwork) it is taxable. Someone here will post the annotation (I hope).

[nick]

What would constitute facilitating a sale? Is placing the gun under glass or showing it to the customer be enough? Or would it be Turner's putting consignment items on their site?

At this point, Turner's is the only FFL I know of that charges sales tax on consignments.

[halifax]

What would constitute facilitating a sale? Is placing the gun under glass or showing it to the customer be enough? Or would it be Turner's putting consignment items on their site?

At this point, Turner's is the only FFL I know of that charges sales tax on consignments.

Here is the BOE annotation but I believe the dealer can't be involved in the negotiated price in any way:

295.1675.600 Service Charge for Sale of Firearms. Since the change in the law requiring private parties to sell firearms only through licensed dealers, a company asks whether the fee it charges to file the required state paperwork to the Department of Justice is subject to tax.
Whether the company is liable for sales tax on the transaction depends upon whether the company is the retailer of the firearms. If an owner of a firearm and a purchaser have negotiated the terms of the sale in advance and then bring the firearm to the company to meet the statutory requirements of the Penal Code, the company is not the retailer of the gun and does not owe tax on the fee or any other charges for the firearm. If, however, an owner of a firearm brings the gun to the company and requests the company to find a buyer, the company is the consignee and the retailer of the firearm, and is liable for sales tax on the sale. In that case, the company must include all fees and charges in the measure of tax. 1/9/92; 2/20/92. (Am. 99–2).
(Note: On and after January 1, 1999, the Department of Justice fee is not includible in the measure of tax, but all other charges remain subject to tax.)

[kemasa]

If the FFL finds the buyer or is involved with the sales price, then the transaction is taxable and that makes the FFL fee, if any, taxable.

http://www.boe.ca.gov/sutax/annotations/pdf/295.1675.600.pdf

There are some FFL who do not realize that that firearms from out of state businesses are taxable either, so you can not go on who does what. It does get confusing.

See: CA Sales Tax Firearms Information 495.0843, 495.0848 & 295.1675.600.

http://www.boe.ca.gov/business/Vol2/suta-q-s.pdf

http://www.boe.ca.gov/sutax/annotations/pdf/495.0843.pdf

[nick]

I see. This is the information I needed, thank you. Looks like I won't be discussing this with Turner's management, after all.