Tax Collection Documentation / Records for BOE

[eltee]

What are FFL's using to record / document tax collected on out of state sales? Anything different than in store sales tax data? Are you keeping a copy of the original sales receipt or just recording the amount?

This tax collecting on out of state sales is confusing
and a PITA

[halifax]

Just recording the tax amount collected here. Also, noting in the margin of my A/D book "P" when already paid to a CA dealer; "X" for excempt (e.g., PPT); and "T" for taxable.

I have no idea what, if anything, is actually required by the BOE.

[TripleT]

I called the BOE when I did my online filing for sales tax and asked them how to handle the tax on an out of state transfer because their online return doesn't have a way of entering tax collected without the sale price included in gross sales. (Return won't balance)

They told me to add the amount of the sale to my gross even though I had nothing to do with the sale itself, only the transfer. I explained to her that if I did enough transfers the franchise tax board and IRS might have a problem with what appears to be unreported income. Of course she said "Oh, you'll be able to explain it to them." Yeah, just what I want to do...

[halifax]

I called the BOE when I did my online filing for sales tax and asked them how to handle the tax on an out of state transfer because their online return doesn't have a way of entering tax collected without the sale price included in gross sales. (Return won't balance)

They told me to add the amount of the sale to my gross even though I had nothing to do with the sale itself, only the transfer. I explained to her that if I did enough transfers the franchise tax board and IRS might have a problem with what appears to be unreported income. Of course she said "Oh, you'll be able to explain it to them." Yeah, just what I want to do...

They are encouraging you to do as Capone did...keep two sets of books

Calculate a gross receipts number for the sales tax return only based on the sales tax collected. Don't use that calculated gross anywhere else.

[tenpercentfirearms]

I just have an item in my point of sale software and track it there. On their sales receipt I will put how much the gun was worth and if you reverse engineered the sales tax equation, you could see how much it was based on the sales tax collected.

[ugimports]

I track on my receipts. I use Quickbooks so I have 2 line items like this:

Customer Paid Vendor - Qty 1 - $100 - taxable
Customer Paid Vendor - Qty -1 - $100 - non-taxable

So on that particular receipt it picks up the tax for the OOS sale.

Somehow I got all my numbers to add up right when I paid my taxes :| And I wasn't adding in the price of the other firearms into my gross receipts. Maybe the way I'm doing it the sales tax liability report ends up being accurate. At least my accountant said I was fine the way I filed.

As far as receipts. I'll keep 'em if I get them. If they don't have a receipt, but the price they tell me they paid is reasonable for what they purchased I don't worry bout it. If they tell me they purchased this brand new Noveske rifle for $100, then I'd ask for a receipt or tell them I'd charge them MSRP for what it was and print out some comparable online. I haven't had any need to do that yet though.

[G17GUY]

I track on my receipts. I use Quickbooks so I have 2 line items like this:

Customer Paid Vendor - Qty 1 - $100 - taxable
Customer Paid Vendor - Qty -1 - $100 - non-taxable

So on that particular receipt it picks up the tax for the OOS sale.

Somehow I got all my numbers to add up right when I paid my taxes :| And I wasn't adding in the price of the other firearms into my gross receipts. Maybe the way I'm doing it the sales tax liability report ends up being accurate. At least my accountant said I was fine the way I filed.

As far as receipts. I'll keep 'em if I get them. If they don't have a receipt, but the price they tell me they paid is reasonable for what they purchased I don't worry bout it. If they tell me they purchased this brand new Noveske rifle for $100, then I'd ask for a receipt or tell them I'd charge them MSRP for what it was and print out some comparable online. I haven't had any need to do that yet though.

What if they say it is a gift?

[ugimports]

What if they say it is a gift?

I ask for the customer to provide a letter from the seller stating that they paid $0 for it. Then I don't collect any tax. I'd also only believe that if it was coming from a private party. If a gun is coming from Buds Gun Shop and they tell me it's a gift I wouldn't believe it.

I tell all my customers to ask their private party sellers to fill out this Personal Sales Statement so I don't have to collect CA tax from them. I haven't had an issue with any sellers not doing this yet.

[G17GUY]

What are FFL's using to record / document tax collected on out of state sales? Anything different than in store sales tax data? Are you keeping a copy of the original sales receipt or just recording the amount?

This tax collecting on out of state sales is confusing
and a PITA

When you pay USE tax to an FFL or any retailer, It is a requirement that they provide a copy of their sellers permit and a completed W9 Form.

[ugimports]

When you pay USE tax to an FFL or any retailer, It is a requirement that they provide a copy of their sellers permit and a completed W9 Form.

When was this a requirement? I actually had a customer who worked for the BOE and he didn't ask for either my sellers permit or a W9. He was also very clear that he was paying me for the use tax on the handgun he had purchased from out of state and just made a note to himself not to claim this particular purchase on his income tax for this year (2010).

I was searching for a reference to what you wrote about and can't find it yet on the BOE site. Can you point me to the section that says this? Even the response I got from the BOE about collecting the tax didn't say anything about W9s or having to provide a copy of my seller's permit to the customer.

ETA:

An out-of-state retailer engaged in business in California who ships property from outside the state to a California consumer is responsible for collecting the use tax from the purchaser. However, as the transaction is subject to use tax the purchaser remains liable for payment of the tax to the state unless a receipt from the retailer is received relieving the purchaser of the responsibility for the payment of the tax.

I found this... it's from the policies at SDSU regarding sales tax.. I would think the the receipt I'm giving the customer satisfies the requirements of the bold section.

Just below it

[halifax]

When you pay USE tax to an FFL or any retailer, It is a requirement that they provide a copy of their sellers permit and a completed W9 Form.

Cite please

[tenpercentfirearms]

When you pay USE tax to an FFL or any retailer, It is a requirement that they provide a copy of their sellers permit and a completed W9 Form.

When would I pay any use tax to an FFL or any retailer? Or do you mean when the customer pays use tax to a retailer? Customers never pay use tax to a retailer, so I am not bound by any such rule even if it did exist. I am collecting sales tax for a retail sale. That is the whole kicker here. This isn't a use tax thing. It is a sales tax thing, plain and simple. The state considers me the retailer and therefore I am liable for sales tax whether I collect it from you or not. I choose to collect it from you and the usual rules apply that it needs to be on a receipt, which it is.