Question on transfers

[Wildbillz]

Hi All
I have a question on the transfer of a gun on form 4.

Seller holds the gun in a state other then yours. He transfers the gun to a dealer in his state ($200 tax due).

The dealer puts the gun on a form 3 (is there another tax due? Or is that part of the transfer from the seller?).

Dealer transfers the gun to a dealer in your state (is there a tax again or no?).

The dealer in your state dose the transfer to you on a form 4 (Tax due).

Thanks
WB

 

[N555]

Dealer to dealer to dealer to dealer on a form 3 doesn't incur a tax. Weird discontinued silencers no one wants can get passed around like a you know what.
But if I buy or make a silencer, I pay $200 tax and then if I sell it to you another $200 goes to the man.

 

[AlexanderA]

Seller holds the gun in a state other then yours. He transfers the gun to a dealer in his state ($200 tax due).

The dealer puts the gun on a form 3 (is there another tax due? Or is that part of the transfer from the seller?).

Dealer transfers the gun to a dealer in your state (is there a tax again or no?).

The dealer in your state does the transfer to you on a form 4 (Tax due).

There's an extra, unnecessary step here. The out-of-state seller (non-dealer) can transfer the gun directly to an SOT dealer in your state. The SOT dealer in your state then transfers it to you. You still have a total of $400 transfer taxes (two Forms 4), but one less delay for a Form 3 transfer.

If it's a C&R machine gun, it would be worth getting an 03 FFL (collector's license). Then it could be transferred interstate directly to you with only one Form 4 and $200 tax. C&R guns are those that are 50 years old. All transferable MG's will be C&R in only 14 years from now.

 

[Hikingman]

Modern revolvers, semi-auto handguns, and most rifles:
The seller has ownership until YOUR FFL completes the transfer to you. The total is: product cost, sales tax collected, shipping to you cost, and YOUR FFL transfer fee. If the seller has his FFL ship it, the that may add more to the total.

For suppressor, auto, or C&R, refer to other posts.

 

[AlexanderA]

The seller has ownership until YOUR FFL completes the transfer to you.

No. When it comes to guns, "ownership" is different from "possession." For example, a felon can buy a gun by paying for it (he then has equitable ownership), but he can't possess it. The FFL system refers only to possession. Commercial law controls ownership. The same exact dichotomy applies to NFA items.

In a typical transaction, title to the gun passes when the seller delivers it to a common carrier (by FOB terms). The receiving FFL dealer acts as bailee for the buyer until the buyer can take possession.

So, once the seller has put the gun in the mail (or shipped it in some other way, as the shippers' policies permit), he's fulfilled his part of the bargain. He's not liable for any loss. If the gun is uninsured, the buyer eats the loss. When the receiving FFL dealer gets the gun, and before he delivers it to the buyer, the dealer is responsible for a loss, as bailee. (This risk is one of the things that a transfer fee covers.)

 

[Hikingman]

Alexander, if I understand your post, if the firearm transaction became void a day after shipment due to a voided payment/ NSF transaction and the gun is moving cross country, the common carrier has effectively received ownership (and without any background check).

The common carrier also has any burden of ownership, and future responsibility for the firearm as owner? Or, does the customer now possibly retain ownership after passing a bad check to the seller who accepted that bounced check in good faith.

 

[AlexanderA]

Alexander, if I understand your post, if the firearm transaction became void a day after shipment due to a voided payment/ NSF transaction, the common carrier has effectively received ownership (and without any background check). The common carrier also has any burden of ownership, and future responsibility for the firearm?

Again, this is part of the confusion between "ownership" and "possession." The common carrier (USPS, FedEx, etc.) is never the "owner." The carrier has the same status as the receiving FFL -- that is, they are agents (bailees) for the buyer even though they have temporary possession of the gun. If the transaction falls through because of a failure of consideration (bounced check, etc.), that's a matter between the buyer and the seller. BTW, the seller should never ship a gun unless he has payment in hand. (That means that the check has cleared or the credit transaction has been approved.) The ATF "possession" rules run parallel to, but are not the same as, the commercial-law "ownership" rules.

 

[243winxb]

The seller receives full payment for a M16Al. The paper work is filled out, by both parties, and sent to the ATF by buyers ffl. After 3 or 4 months, the paper work is completed. Seller can now ship M16 by USPS to ffl of buyer. Gun is in buyers name. Ffl logs gun in, then out to new owner.

Best shipped registered mail. Insurance is on the buyer to provide.

My best guess. Sold this one.

 

[MachIVshooter]

The seller receives full payment for a M16Al. The paper work is filled out, by both parties, and sent to the ATF by buyers ffl. After 3 or 4 months, the paper work is completed. Seller can now ship M16 by USPS to ffl of buyer. Gun is in buyers name. Ffl logs gun in, then out to new owner.

Best shipped registered mail. Insurance is on the buyer to provide.

My best guess.

Not a good guess.

A private seller of an NFA item cannot transfer directly to a buyer in another state. It has to transfer to an SOT in buyer's state on a Form 4, then another Form 4 to the buyer.

Intrastate, it can transfer directly from seller to buyer on a single Form 4.

Each Form 4 will take 7-9 months with eforms, 12-14 with paper.

 

[dogtown tom]

The seller receives full payment for a M16Al. The paper work is filled out, by both parties, and sent to the ATF by buyers ffl.

The transferor submits the Form 4.

After 3 or 4 months, the paper work is completed.

On what planet do Form 4's take 3 or 4 months?
Lets estimate 8-10 using current eForm 4's and 12-14months on a paper Form 4.

Seller can now ship M16 by USPS to ffl of buyer. Gun is in buyers name. Ffl logs gun in, then out to new owner.

No, once received by the FFL in the buyers state, ANOTHER Form 4 is submitted to transfer from the buyers receiving dealer to the buyer. When that stamp is approved, the dealer can transfer.

Best shipped registered mail. Insurance is on the buyer to provide.

Insurance protects the seller, not the buyer. The buyer is entitled to the firearm as described and in the described condition.
Who pays for the insurance is immaterial.

 

[AlexanderA]

Insurance protects the seller, not the buyer. The buyer is entitled to the firearm as described and in the described condition.

This depends on who has (equitable) title to the gun, at each stage of the process. (This is completely apart from the issue of who has the right to possess the gun.)

Believe it or not, the BATFE has issued regulations on this subject (although they're under the regulations section for tobacco, not guns). However, they apply by analogy.

27 CFR § 46.205 Guidelines to determine title to articles in transit.


The dealer may use the following guidelines to establish who holds title to articles in transit.


(a) If State law mandates the change in title, then no agreement or contract between seller and buyer can alter it.


(b) In the absence of State law governing the change of title between seller and buyer, the Uniform Commercial Code allows the seller and buyer to agree when title passes.


(c) If there is no State law or agreement between the seller and buyer, the Uniform Commercial Code states that title transfer depends on how the seller ships the articles.


(1) If the shipment is free on board (F.O.B.) destination, the title transfer occurs when the seller completes the physical delivery of the articles.


(2) If the shipment is free on board (F.O.B.) shipping point, the title transfer occurs at the time and place of shipment, which is generally by common carrier. ​

The normal arrangement is for the sale to be FOB the seller's shipping point. So if the seller delivers the gun, in the described condition, to the local office of the common carrier, he has fulfilled his part of the bargain. From then on, the risk of loss falls on the buyer. Accordingly, insurance protects the buyer in 99% of the cases. (That doesn't preclude the common carrier and/or the receiving FFL dealer from being liable in the case of their negligence.)

 

[dogtown tom]

This depends on who has (equitable) title to the gun, at each stage of the process. (This is completely apart from the issue of who has the right to possess the gun.)

Believe it or not, the BATFE has issued regulations on this subject (although they're under the regulations section for tobacco, not guns). However, they apply by analogy.

27 CFR § 46.205 ​

Has nothing to do with firearms. Period.

FOB is a term used in freight shipments, not parcels containing firearm mailed USPS or shipped UPS/FedEx.

If your seller ever says "its shipping FOB, but you are paying me to ship it" run, not walk.

If the seller is the one paying and printing the label..........he's the shipper. Whether he charged the buyer for the shipping costs is immaterial.

Literally no firearm manufacturer, distributor or dealer I've received a firearm from in the last 14+ years has shipped a gun "FOB". That around 28,000 guns.
Not sure why you think it's relevant in this thread.
​

 

[AlexanderA]

The questionable statement is "Insurance protects the seller, not the buyer."

FOB to the seller's carrier is default; it doesn't have to be stated. (This is standard commercial practice.) The risk of loss in transit is normally on the buyer. That's why the buyer should always be sure that insurance is obtained. It doesn't matter who ultimately pays for the insurance or the shipping.

If I were a seller, I would balk at the buyer insisting on FOB destination. I would want to be able to wash my hands of the whole thing once I put it in the mail.

 

[dogtown tom]

The questionable statement is "Insurance protects the seller, not the buyer."

Yet every credit card company sides with the buyer when the item doesn't arrive in the condition as advertised.
As does every gun forum.
As does Ebay.
As does Amazon.
As does GunBroker.

FOB to the seller's carrier is default; it doesn't have to be stated. (This is standard commercial practice.) The risk of loss in transit is normally on the buyer. That's why the buyer should always be sure that insurance is obtained. It doesn't matter who ultimately pays for the insurance or the shipping.

Not at all true.
Buyer isn't the one paying for the shipping label and cannot force the seller to purchase insurance.

If I were a seller, I would balk at the buyer insisting on FOB destination. I would want to be able to wash my hands of the whole thing once I put it in the mail.

Which is a good reason for someone to never buy anything from you. Sellers poor packaging>means carrier denies claim for damage>means buyer has no recourse.