Sales tax on a free AR lower?

[jm13690]

So a year back I ordered an 6.5 Grendel upper to be built. The builder has had a hard time on getting parts and to make up for the long wait time he is sending me one of his company's lowers for free as an apology. I understand that I will have to pay the FFL transfer cost because the company is in Arizona, but do I have to pay sales tax on a free AR lower? If so, is the tax on the listed price of the lower?

[daves100]

Lower

I would have him sell it to you for 15.00 ( bill of sale) with the lower. So you end up paying a 1.00 in tax...

So a year back I ordered an 6.5 Grendel upper to be built. The builder has had a hard time on getting parts and to make up for the long wait time he is sending me one of his company's lowers for free as an apology. I understand that I will have to pay the FFL transfer cost because the company is in Arizona, but do I have to pay sales tax on a free AR lower? If so, is the tax on the listed price of the lower?

[tenpercentfirearms]

Yes you have to pay the sales tax. However, isn't the total price of the whole package the price you paid? Now the only way that might be a negative is if you planned on skipping the sales tax/use tax on the upper and now the dealer sees you paid $1000 for this "complete" sale and charges you sales tax on the whole thing.

If it were me, I wouldn't want to put my FFL in a bind with the BOE and I would just say you don't have a receipt, but here is the price from their website and just pay the sales tax. Even if it was a $300 upper that is only $22.50 at 7.5% and are you really that broke you can't afford a clear conscience and a happy FFL for what is probably less than $22.50?

Just remember guys, when you involve and FFL and trying to cheat your taxes, that puts the FFL on the hook. He doesn't have to collect the tax, but he has to pay it. Don't put someone else on the hook for your illegal activities.

You don't want to claim your use tax on the upper, I have no problems with that. That is your business. Trying to get out of taxes on my end does.

And again, I am not assuming you are going to do that as you are here asking the question and doing the right thing. However the first response you get is to have the vendor falsify a document and put that it was $15 and so other people are clearly thinking it.

[kemasa]

If it is a gift, then it is not subject to sales tax. The giver of the gift is responsible for paying the sales tax in the state in which they gave the gift. There needs to be documentation that it is a gift and that you are not paying anything for it. If there is no letter, the FFL needs to pay the sales tax, so you are going to have to pay, perhaps valued at higher than you could buy it for if you don't provide a receipt.

As said, you do owe the sales tax on items you purchase, but those items don't have to go through a FFL and the FFL is not responsible for collecting sales tax on it if they don't receive it.