Tax on DROS

[crazy]

I was charged tax on the DROS for a stripped AR lower. I don't think this is correct. Anyone have an answer for me?

[Shane916]

I was charged tax on the DROS for a stripped AR lower. I don't think this is correct. Anyone have an answer for me?

DROS is NOT taxed.

http://ag.ca.gov/firearms/dlrfaqs.php#40G

40. May I charge sales tax on the DROS fees?

No. On January 1, 1999, the state Board of Equalization ruled that the DROS fees are not subject to retail sales tax. Firearms dealers licensed pursuant to Penal Code section 12071 shall not charge sales tax on the DROS fees. Questions regarding firearms transfer fees can be directed to the DOJ through this website or by calling (916) 263-4887. Questions regarding sales tax can be made to the California Board of Equalization at its website www.boe.ca.gov.

[professionalcoyotehunter]

Should not have happened.

[Cokebottle]

Ditto.
Tax is not to be charged on labor, services (other than utilities, as you are receiving a "product"), or fees....


...unless you are the State of California, then you can charge tax on criminal fines and call it a penalty assessment, and tax on vehicle registration and call it a licensing fee, and on underpayment of income tax withholdings and call it a surcharge

[crazy]

Thank you for the speedy replies and including the section from BOE.

[TripleT]

Don't be confused on sales tax on the OLL. That is legal.

[crazy]

Don't be confused on sales tax on the OLL. That is legal.

I know. They charged me tax on the lower and DROS.

[5150Marcelo]

What store?????????

[ugimports]

Ditto.
Tax is not to be charged on labor, services (other than utilities, as you are receiving a "product"), or fees....


...unless you are the State of California, then you can charge tax on criminal fines and call it a penalty assessment, and tax on vehicle registration and call it a licensing fee, and on underpayment of income tax withholdings and call it a surcharge

Tax is also to be charged on FFL transfer fees according to the BOE even though it is just a service.

[halifax]

Tax is also to be charged on FFL transfer fees according to the BOE even though it is just a service.

When is Labor Taxable

Services related to a taxable sale are taxable Your charges for services related to a taxable sale are generally taxable. This is true whether you itemize the charges or include them in the price of the product. For example, suppose your taxable sale of a computer program includes 20 hours of training, and the customer cannot buy the program without the training services. The training is taxable as part of the sale whether you show a separate charge for it on your invoice or charge one amount for the program and training together.

[crazy]

DROS is not labor.

[Lancear15]

When is Labor Taxable

Exactly, a lot of people are unaware that a lot of labor is taxable. Even some repair labor (contrary the general rule given in your link). When in doubt seek a CPA. A good accountant more them pays for themselves.

[ugimports]

When is Labor Taxable

http://www.calguns.net/calgunforum/showthread.php?t=246221

The BOE gave me specific information. See my Q&A with them in the linked thread.

ETA: I just realized you were pointing out the same thing with the quote you had below that.

[kemasa]

In the case of firearms, the FFL fee is subject to sales tax if the firearm also is. In the case of a PPT, there is no sales tax, but in the case of a firearm coming from out of state from a business, sales tax needs to be collected on the firearm and the FFL fee.

It does not have to make sense, it is just the way it is.

[TripleT]

And to be double clear (or triple or whatever) the 25.00 dros fee (or 35.00 ppt fee) is never taxable while anything added to do the transfer in the form of a fee is. ie, if a FFL charges 25.00 for the dros and 20.00 for the transfer fee, only the transfer fee (20.00) is taxed, not the dros (25.00). This is irrespective of what the tax would be on the item itself. (which doesn't seem to be in contention) The only exception would be if the firearm came from a private party then none of the transaction, dros or FFL fee is taxed. Correct ???

Damn, I hope that makes sense...