Asked to pay sales tax in CA for out of state purchase :(

[mwsenoj]

I just bought a Glock 22 from BudsGunshop.com in KY. The sticker price was right at $500 - about $90 cheaper than my local gun store and came with free shipping. I knew that I had to pay a fee ~$70 to get the gun in from out of state but I was just told that I would be paying CA sales tax on a gun that I bought in KY! When I bought a rifle from the same place in July and had it shipped to my local gun shop/FFL there was no tax, just the ~$70 fee. Anyone else have a similar experience? or is this a way to get ahead in the books that some shops use?

 

[OARNGESI]

Ive never payed sales tax on a incoming purchase shipped from outta state ofcourse ca and az are way different

 

[mwsenoj]

well, thats not very helpful

 

[orionengnr]

Asked?

Politely refuse acceptance, let them send it back on their dime, find another FFL who is not a crook.

JMHO.

 

[drsfmd]

Most (all?) states have what is called a "use tax" that you are legally obligated to pay on all out of state purchases.

 

[orionengnr]

Really?

 

[oneounceload]

Most (all?) states have what is called a "use tax" that you are legally obligated to pay on all out of state purchases.

Exactly, and the use tax just happens to equal the sales tax in most states



CA is collecting sales tax on internet sales as a way to raise revenue. Even if you didn't have to pay it, the difference was small enough you should have (IMO), supported your local gun shop

 

[mwsenoj]

I know that i never pay out of state sales tax on internet and phone orders. Even if it was so, I would expect a change like this to happen at the beginning of a calendar year not between July and December. They are really my only choice as I live in a rural area. I sort of rushed to get this pistol because I had heard that there was going to be some more stupid restrictive gun laws passed as of Jan '12:banghead:

 

[oneounceload]

Sometimes it is on a calender year, sometimes on a fiscal one

 

[mwsenoj]

Well, maybe I should have supported them. When I worked it out sans sales tax, I came ahead $60. Now that I am being charged sales tax I will be paying more than I would have if I had paid the higher sticker price! I forgot to mention that I did get some extras when I bought the pistol from Buds - a shooting bag and 3 mags instead of the standard 2.

 

[jmstevens2]

In Ohio you have to pay it, but you claim it on your income tax. Not at time of sale.

 

[orionengnr]

I have lived in a number of states (even since AG invented the internet) and have never been "asked" to pay sales tax on any interstate sale/transfer.

 

[Carter]

In NC you claim it at the end of the year...if you're honest. A Diamonds Direct salesman tried to get my dad to buy an out of state ring for my mom to avoid the sales tax, and claimed only idiots claim it at the end of the year.


If its under a certain amount though and you don't have records for the purchase you don't have to pay tax.


I claimed my gun from buds though.

 

[El Mariachi]

It's the New California in action (courtesy of our Demmy polis). I called a pawn shop in Torrance (So Cal) last week to see what they'd charge me to receive and transfer a C&R pistol and a forty year old long gun from an 001FFL in Utah. It wasn't the hundred+ bucks that pissed me off, but the 10% sales tax that they wanted to get me for also. Seems like my nemesis Joseph Zingg et al at the BOE has started sending letters out to any & all gun stores across our state to start collecting sales tax on firearms, new OR used. Or else. Lovely. Just hope I can make it another 32 daze here before I can tell Moonbeam and Friends to go pound sand.....

 

[mwsenoj]

The exact prices:

$514 for the shooters pack at Buds - Glock 22, 3 mags, range bag, std glock box
+$20 to ship it here quickly before Christmas
+$37.27 sales tax
+ $70 for out of state fee + transfer
= $641.27

--------------------------------
$590 at local place for Glock 22 + 2 mags and std glock box
+ $42.77 CA sales tax
+ $35 transfer fee
= $667.77


I guess I did come out alright. I hadn't crunched all the numbers, but rather gone on the word of the guy behind the counter that I would be paying ~$30 more for it the way I went.

 

[The_Next_Generation]

This is why I bought my CZ 452 Trainer from my LGS, instead of online. Here in WA, not only is there the $50+ FFL transfer fee, we are required to pay sales tax as well.

Guess those guys in the capitol building wised up

 

[22-rimfire]

I'm afraid I don't understand. You are buying a gun from Buds (KY) where you actually pay for the gun at Buds. Buds ships or has shipped the gun to your FFL dealer in CA. Is the dealer charging the sales tax or is Buds? If it is the FFL, has this FFL dealer done this before? Has a law been passed in CA recently? The dealer should be able to explain this to you if you ask.

All this aside, the time is coming when all mail order sales will be taxed by the state receiving the shipment. At the moment, it is not legal for them to do that unless the seller has a physical operation inside the state unless the state has some new law that covers this. There is the use tax and being technically obligated to send the state the sales tax regardless. This is usually done as part of the annual state tax return.

 

[MMCSRET]

That is the coming thing, it falls in line with a sales tax on internet sales. They, being the collective term for state governments, are trying to get it thru, and they will as soon as they figure out a way to enforce it.

 

[rromeo]

The California BOE has been sending letters to FFLs, informing them to collect tax on transferred firearms. It's not new code, but enforcement has been raised over the past year, and firearms transfers were an easy target.

REVENUE AND TAXATION CODE 6006.5
6006.5. "Occasional sale" includes all of the following:
(a) A sale of property not held or used by a seller in the course
of activities for which he or she is required to hold a seller's
permit or permits or would be required to hold a seller's permit or
permits if the activities were conducted in this state, provided that
the sale is not one of a series of sales sufficient in number,
scope, and character to constitute an activity for which he or she is
required to hold a seller's permit or would be required to hold a
seller's permit if the activity were conducted in this state.

(b) Any transfer of all or substantially all the property held or
used by a person in the course of those activities when after the
transfer the real or ultimate ownership of the property is
substantially similar to that which existed before the transfer. For
the purposes of this section, stockholders, bondholders, partners, or
other persons holding an ownership interest in a corporation or
other entity are regarded as having the "real or ultimate ownership"
of the property of the corporation or other entity.

(c) A sale of property, other than hay, by a producer of hay,
provided that the sale is not one of a series of sales sufficient in
number, scope, or character to constitute an activity for which the
producer would be required to hold a seller's permit if the producer
were not also selling hay.

495.0848 Delivery by Licensed Firearm Dealer. A California resident
purchased a firearm from an out-of-state retailer who is not engaged
in business in California. The California customer contacts a licensed
California firearm dealer and states that he paid money to an out-of-state
dealer and wishes for the dealer to have the firearm shipped to the
dealer's place of business and legally transfer the firearm to him. The
dealer contacts the out-of-state seller and arranges to have the firearm
sent to him. Upon receipt of the firearm (prepaid by the customer),
the dealer logs the firearm into his Federal Acquisition/Disposition
books. The customer then fills out the State Department of Justice
Firearms Dealer Record of Sale. The dealer collects the state fee of
$14.00 plus a $16.00 charge to cover the dealer's expenses.

When a licensed California firearm dealer completes the registration
paperwork and delivers a firearm to a California purchaser for an
out-of-state retailer not registered with the Board as a retailer engaged
in business in this state, it is presumed that the dealer is the retailer
of the firearm. In such a case, the dealer would owe sales tax on the
total amount of the sales price of the gun, including the Department of
Justice fee passed on to the customer and including the dealers service
charge. (Section 6007)

If the out-of-state retailer was engaged in business in this state
under section 6203, the California dealer's deliveries for that retailer
will not be considered taxable retail sales by the dealer, even if the
out-of-state retailer has not registered with the Board as a retailer
engaged in business in this state. In such cases, the out-of-state
retailer has the duty to collect the use tax under section 6203 and that
retailer should collect tax on the invoice price of the firearm plus
the dealer's service charges and the Department of Justice fee that is
passed on the customer. 10/26/95. (Am. 99-2).

(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.)

 

[rromeo]

 

[mwsenoj]

Is the dealer charging the sales tax or is Buds?

Ya, I was charged sales tax by the FFL. Rromeo's scan really answers my question though.

 

[wild cat mccane]

Here in backwards Utah you have report all sales online that you didn't pay Utah sales tax on your tax form.

So this doesn't seem to out of line. Which one do you think will keep the tax payer more honest to his state?

 

[NavyLCDR]

Every state that has a sales tax has an equivalent use tax. When you buy something from out of state, for use in your home state, you are responsible for paying the use tax on it. If the item goes through a dealer, such as a car or antique or gun - or any retail establishment with a sales tax license, that establishment can collect the tax and pass it on to the state, you get a receipt with a tax amount listed on it and that relieves you of the responsibility for the tax.

Use tax is mostly completely unenforceable. Some states have figured out, though, that they can require intermediary dealers to collect it.

 

[boatme99]

Yep. Lots of states are starting this. Here in Tn. (9.75%) they now take the tax at transfer.
We'll be seeing more of this.
States are scratching for every penny they can get.

 

[22-rimfire]

Didn't know that about TN. The letter from the CA tax folks was very revealing. It seems that the collection of sales tax on out of state sales is going to be controlled at the State level rather than Federal. FFL Dealers are easy targets and the per sale amount can be fairly substantial because the transfer has to be logged into their books. We'll see how far this goes.