Another Sales Tax Question

[TripleT]

When you are acting as a Transfer Dealer from a retailer / FFL that is out of state, how are you all handling accessories that are shipped with a firearm for transfer ?

Are you collecting sales tax on just the firearm or are you collecting sales tax on the entire order ?

Are you excluding freight ?

Are you excluding CC fees ?

Scenario:

Receive firearm from a retailer from out of state. In the box is the following:

1. Case with firearm
2. Blister packs of extra magazines
3. Blister packs of grip extensions
4. Invoice that lists, Firearm, mags, grip extensions, shipping charge, credit card processing fee.

What will you be charging sales tax on ???

[kemasa]

You need to charge sales tax on all the items that go through you. Shipping, if it is at cost, is not taxable. If the place makes a profit on the shipping, then that part is taxable. No, don't ask me to explain how you are supposed to know what profit, if any, the place makes. CC fees would not be taxable, if it is listed separately.

Sometimes it is best to have the non-firearm items to be shipped directly and let the buyer report it on the income tax return.

[tenpercentfirearms]

You need to charge sales tax on all the items that go through you. Shipping, if it is at cost, is not taxable. If the place makes a profit on the shipping, then that part is taxable. No, don't ask me to explain how you are supposed to know what profit, if any, the place makes. CC fees would not be taxable, if it is listed separately.

Sometimes it is best to have the non-firearm items to be shipped directly and let the buyer report it on the income tax return.

I believe kemasa is right about everything but the CC fees and part of the shipping fees. CC fees are considered part of the retail cost of the firearm and should be included.

For shipping, kemesa is correct that if you are a retailer collecting sales tax, if you charge more than the actual shipping cost, the additional is taxable (that is why I just collect sales tax on my entire shipping charge). However, the board does not state that when collecting sales tax on an item from out of state that you must collect tax on the additional from another retailer. It simply says if the shipping amount is invoiced separately, then you do not collect sales tax.

It does state that handling charges are taxable and I am pretty sure CC is a handling charge. I might have actually seen where CC is taxable somewhere, but it makes sense that it is an added cost of buying tangible personal property and is therefore taxable. Just like a transfer fee is taxable.

http://www.boe.ca.gov/sutax/faqpurch.htm#10

If you are keeping a receipt that is showing these items coming through you, tax them.

[tenpercentfirearms]

kemasa might have gotten the no to the CC fees from this.

http://www.boe.ca.gov/pdf/pub61.pdf

It says that finance charges are not taxable. Is a CC fee a finance charge? Well it technically isn't a CC fee as that is against the terms of service to accept CCs. It is a cash discount. Cash discounts are not taxable. Since you are paying more to use a CC, then that definitely isn't a cash discount. I wouldn't want to argue it in court and if I did, it already cost too much.

[TripleT]

I had a feeling this would be the case. I have always deducted the freight but this invoice had a buncha' other stuff included, so I thought I'd get a pier review...