Sales tax on DROS?

[Tempus]

Did a PPT at Turners last night and got charged sales tax on the DROS. Never had that before and was wondering if something has changed or if it was just a mistake.

[paul0660]

Nothing has changed. It probably was not a mistake, just a little extra for them.

[darkest2000]

They're not suppose to tax it.

[kemasa]

No, they are not supposed to do that. You should get your money back. They should know this.

See:

CA Sales Tax Firearms Information 495.0843 & 495.0848

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

(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.)

[ke6guj]

Did a PPT at Turners last night and got charged sales tax on the DROS. Never had that before and was wondering if something has changed or if it was just a mistake.

were you charged tax on the entire $35 (around $3), or just on the dealer fee (around $.85)? The state DROS fees are not taxable, but any dealer fee portion can, IIRC.

[Tempus]

were you charged tax on the entire $35 (around $3), or just on the dealer fee (around $.85)? The state DROS fees are not taxable, but any dealer fee portion can, IIRC.

Around 85 cents. Thanks, that clears it up. I was wondering why it wasn't the full 8.75%.

[tenpercentfirearms]

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.

[BannedinBritain]

were you charged tax on the entire $35 (around $3), or just on the dealer fee (around $.85)? The state DROS fees are not taxable, but any dealer fee portion can, IIRC.

Negative...tax is only charged on fees for firearms received from a retailer. There should be NO tax on a private party transaction. $35 flat is all you should pay.

[kemasa]

Negative...tax is only charged on fees for firearms received from a retailer. There should be NO tax on a private party transaction. $35 flat is all you should pay.

That is not accurate. If the FFL gets involved in finding the buyer or dealing with the price, then sales tax is to be collected. A consignment can be processed at a PPT, but sales tax is due, for example.

[BannedinBritain]

That is not accurate. If the FFL gets involved in finding the buyer or dealing with the price, then sales tax is to be collected.

I often forget this...in reality (excluding some consignments), it never happens...and even if it did I'm probably not going to remember to charge tax on the ten bucks anyway.

A consignment can be processed at a PPT, but sales tax is due, for example.

True, but only for guns sold over the counter or to a party inside CA.

[CSACANNONEER]

I often forget this...in reality, it never happens...and even if it did I'm probably not going to remember to charge tax on the ten bucks anyway.

In reality, it happens every single day in this state. Many consignment guns are treated as PPTs and the FFL gets involved in collecting the sale price and sales tax.

[paul0660]

So then, despite being FTF, it isn't a PPT, right?

[BannedinBritain]

In reality, it happens every single day in this state. Many consignment guns are treated as PPTs and the FFL gets involved in collecting the sale price and sales tax.

I edited my post for the "technicality Nazis"...the comment you quoted was meant for Private Party Transactions where the buyer and the seller are present.

The reason tax is collected on a consignment gun when I sell it over the counter is because it comes from my inventory as a sale, not because I've "gotten involved in pricing or finding a buyer". Although a rhetorical case can be made that's precisely the reason tax is charged on consignments. But if the seller sets the price with no input from me, and sends his buddy who I've never met down to purchase the consignment, then there should be no tax on the price or fee...right?

[kemasa]

I often forget this...in reality (excluding some consignments), it never happens...and even if it did I'm probably not going to remember to charge tax on the ten bucks anyway.

And the price of the firearm.

[kemasa]

I edited my post for the "technicality Nazis"...the comment you quoted was meant for Private Party Transactions where the buyer and the seller are present.

Rather than name calling, wouldn't you prefer to be as accurate as possible?

Even with a PPT, the buyer and seller don't have to be present at the same time.

The reason tax is collected on a consignment gun when I sell it over the counter is because it comes from my inventory as a sale, not because I've "gotten involved in pricing or finding a buyer". Although a rhetorical case can be made that's precisely the reason tax is charged on consignments. But if the seller sets the price with no input from me, and sends his buddy who I've never met down to purchase the consignment, then there should be no tax on the price or fee...right?

The reason that tax is collected is because the BOE can come up with an excuse as to why sales tax would be due. Doing a transfer is basically the labor of doing the required paperwork, but there is sales tax. If a person buys a firearm from a business in CA and then has it transferred to another dealer to do the paperwork, the original dealer is responsible for collecting the sales tax on the transfer dealer's fee even though they don't know what the fee is.

I suspect it would still be viewed that you owed the tax since you took the firearm on consignment. In your example, you are still dealing with the customer, it is not like two people walk in and have the deal already made, although close.