Are out-of-state purchases supposed to be taxed when transferred?

[BamBam-31]

Usually, when I purchase stuff online, if I'm from one state and the seller is from another, I am not assessed sales tax.

Recently, I won an auction for a pistol. The seller is from CO and I'm from CA, so I assumed I wouldn't be taxed for the purchase. When I went to one of the local dealers to have it transferred, however, he wanted to charge me 10% of the sale price, $30 DROS fees, and sales tax. He explained that it was a legal requirement that if something was to be "registered" through a transfer (meaning guns), it also had to be taxed. He said that dealers that didn't tax transfers would get in trouble with the law.

I've purchased guns online before, and I've had them transferred through another local dealer who charged me $25 in fees, plus $20 DROS. No tax. Okay, so who's right?

 

[striker3]

I ran into this same problem when I tried to have a pistol sent to Cali. It seems like, from the dealers that I talked to in my area, that the Cali government has the view that since the firearm is sent to the dealer, then transfered to you, he is actually making a sale. What got me, and what I never got a satisfactory answer to, was how they could charge sales tax on an item that that they never paid for, and in fact have no way of verifying the price that you paid for it. This seems to make the tax kind of arbitrary. I could maybe see being taxed on the transfer fee, because that is a service provided by them, but that is it. I was told that I would have to pay a use tax to the state even if they didn't tax me, but that is also true for anything bought out of state then shipped in, and who enforces that rule?

Since I am in the USMC and my state of residence is AZ, I just had it shipped to a dealer there and went and picked it up. A lot less hassle, a lot cheaper, and no waiting period.

 

[Wiley]

If CA tax laws are similar to GA, you wern't charged a 'sales' tax but a 'use' tax, which is the same percent as the sales tax.

Applies to any out of state purchase. For example, if you buy a car out of state but registered in your home state you pay the purchase state no sales tax, but pay your home state a use tax equal to what you would have paid had you bought it in your home state.

 

[Tomac]

Sounds like more CA dealer price-gouging. I live in Idaho and up here I pay for my firearm + shipping and pay a flat $20 transfer fee to my local 'shop. No sales tax as long as the purchase is prepaid by me. A friend of mine lives in CA and has a shotgun here in my gunsafe. He looked into having it shipped to him but all the dealers wanted exhorbitant transfer fees so he'll take it back there with him the next time he visits this summer.
Tomac

 

[DMK]

What got me, and what I never got a satisfactory answer to, was how they could charge sales tax on an item that that they never paid for, and in fact have no way of verifying the price that you paid for it.

What's to keep you from telling them you bought it from a friend for $1? Are they charging tax on the blue book value?

 

[Hkmp5sd]

Depends on state and local tax codes. As with everything else government related, it is not the same everywhere in the US.

 

[BamBam-31]

Depends on state and local tax codes. As with everything else government related, it is not the same everywhere in the US.

True. Some states don't even have sales tax, IINM. I'm asking about CA, however, L.A. in particular.

Two other shops around here simply charge a fixed transfer fee ($25-$50) plus DROS. This shop that wanted to charge sales tax is the first and only shop to mention it, AFAIK.

 

[45 ACP]

CA state tax code states that ANY transaction completed in the state is subject to sales tax. BTW, receiving goods at your doorstep via mailorder is considered to be "completing" the sale.

Now, I know that many others like myself purchase items from out of state and don't pay sales tax. Items like my home computer were subject to sales tax because the manufacturer keeps offices within the state. Here's where is gets interesting....

Because you have to fill out a DROS in order to complete the firearm transaction in the state, the "man" now has a record of this transaction. Should the receiving FFL in CA be audited by the Franchise Tax Board, they will ask for proof of the collection of sales tax. After all, there is a record of the sale right?

This is the same as the computer company that is headquartered out of state, but keeps offices here. That means the FTB can audit ALL CA related transactions that said company has performed. Since there's a record of the sale, there will be a record of the sales tax collected.

In the case of out-of-state vendors, since they don't keep an office in CA there is no way the CA FTB can audit their records. Therefore, the state of CA cannot find any way to legally demand CA sales tax, since the records are "off-limits".

BamBam-31, in the case of the FFL that is requesting sales tax, he/she is correct in doing so. I've bought firearms from out of state and not paid sales tax in the past. I suppose if the FTB audited the FFL I used, they could send me an invoice. Whatever. I'm content to wait and see if THAT ever happens.

Welcome to the Republik. Please present your papers and wallet.

 

[Lennyjoe]

I have never paid taxes on a pistol purchase online. Nor has my FFL tried to charge me taxes on the sale. Just the usual transfer fee of $20

 

[Telperion]

Tell him the sales price was $1.

 

[tcdrennen]

Ubder PDR of Kalifornistan rules, there is no tax liability on private party transfers of property, but there is on any retail or wholesale transfer. Since there is NO legal PPT from out of state for firearms, the sales or use tax is SUPPOSED to be charged on the tansfer from the FFL to the purshaser, even if the FFL is only actually "handling" the transfer from an out of state seller.

IOW, as far as Kalifornistan is concerned, the CA resident is buying the gun from the FFL. How the FFL got the gun, or who initiated and negotiated that transfer, is irrelevant to the tax man.

Now, if two CA residents negotiate a PPT between each other, while the DOJ requires the transfer to be through a FFL, there is no sales tax involved since the Board of Equalization (the CA sales tax authority - the Franchise Tax Board is the income tax authority. Yeah, two separate and unequal tax systems amd bureaucracies. Duh, what do you expect from the Kaliban. But I digress... ) doesn't care about private party sales. (Unless state-registered property is involved - vehicles and real estate; those you DO pay sales tax on when you re-register them.)

The confusion is that while the DOJ process *appears* identical whether the PPT is from out of state or between two CA residents, it's entirely different to the BoE. And yes, a FFL who DOESN'T charge "use" or "sales" tax on a Out of State PPT will find himself paying it to the BoE if he's audited so he'd better charge you for it or be prepared to eat it himself.

I'm not a lawyer and don't play one on TV, YMMV, IMHO, etc. etc.

 

[Pendragon]

most of the time its pa punitive measure from a dealer to disuade you from buying that way.

also - you have to watch the drop test law. unless the gun you bought is listed, you cant buy it from out of state.

if it is listed, why not just buy it at the dealer?

 

[StuporDave]

In Louisiana you're technically supposed to pay sales tax on internet/mailorder type purchases. There's a place on the state income tax form to list the purchases and pay 8% tax on them along with you're income tax. Basically the honor system. I'm sure eveyone pays their sales tax like they're supposed to. I do, of course!

 

[BamBam-31]

45 ACP & tcdrennen, those were the answers I was looking for. Thanks for the info.

Pendragon, the pistol was in stock at my local shop, but it was $250 cheaper from the auction (plus no sales tax). As much as I wanted to do business with the local guy, the price gap was just too much. The pistol's CA approved, BTW. No worries there.

So the bottom line is, all the shops that don't charge sales tax are going out on a limb for you to do the transfer. That sucks. The wheels on this transaction are just about done spinning, so that's that. Dunno if I want to put my local shops in this kind of position again....

Once again, my familiar refrain: FREAKIN' KALI!! :banghead:

 

[Pendragon]

wow - $250 - thats a lot.

I figured if might be $50-80 in which case the hassle factor makes it not worth it.

 

[WvaBill]

In WV, you are supposed to keep a record of all out-of-state purchases and pay 6% on that amount. Of course we do.

 

[dukeofurl]

Short version.

I live in FL, so this applies to FL

"SALES TAX" is an abbreviaton, the exact term is "SALES AND USE TAX"

Anything that is USED is taxed at the sales tax rate. Items purchased for resale are purchased tax exempt contingent upon reporting tax when a retail customer makes the purchase.

My family in in the restaurant business. We can order $10,000 in meat, seafood, and vegetables tax exempt. But if I order a case of toilet paper, the TP is taxed at 6% as it is a USE item.

In summation: Buy private when you can.