Sales tax for FTF?

[PinnedAndRecessed]

If I meet a private owner for a gun sale in a gun store, do I pay the store sales tax? I know he has a right to charge for the transfer, but does he have the right to charge sales tax? This is in California.

 

[possenti]

Oh...

I thought you had to pay a tax for a Failure To Fire. If that's the case, I once had a Jennings 9mm that would have cost me a fortune...

What DO you mean by "FTF"?

 

[Mute]

No. It's the seller's gun not the store's. It's the gunowner's responsibility to collect sales tax and send it to the state (yeah right).

 

[WhoKnowsWho]

The store doing the transfer will tack on any extra fees they want and call them what they want. You might want to try finding somewhere else to do it.

 

[PinnedAndRecessed]

Sorry possenti. "FTF" is "face to face." When buying guns in Kartoonfornia sometimes you have to buy from an individual. Sometimes it works out to meet the person face-to-face in a gun store to make the transaction.

But some stores, I've heard, will try to charge their transaction fee plus charge sales tax, even though they are not the ones who are making the sale. Truth be known, they are looking to make extra cash off the ignorance of the seller/buyer.

 

[Gunsnrovers]

Face to face transactions in the PRK are regulated in terms of fees a shop may charge and shops that sell handguns are required to facilitate these transactions. Fees have increased lately so check the DOJ web page, but they are fixed. The seller is responsible for the sales tax, not the shop.

Transfer fees from out of state or via a FFL are wide open in terms of what they can charge.

 

[Onmilo]

If the Customer sends the funds then here in Illinois the only tax the could be collected is on the transfer fee.
If the Dealer makes the payment it is consider interstate retail commerce and the dealer must collect the tax on the total sales amount.
We do them as a non-taxable service charge.
The receiver is required to pay the state the sales tax when he files his state income tax.

 

[Larry Ashcraft]

AFAIK, the seller paid the sales tax when he BOUGHT the gun, therefore there is no requirement to charge tax on it again.

Anyway, the seller can't charge tax if he doesn't have a state sales tax license.

 

[TaxPhd]

"The seller is responsible for the sales tax, not the shop."

Not if the seller doesn't have nexus in the purchasers state. For most of these transactions, the purchaser should be self-assessing and paying USE tax (it is included on your state tax return, if your state has a sales tax).

Whether sales tax was paid on the original purchase or not doesn't matter. The sale of used items is most certainly subject to sales tax, the same way that the sales of new items are.

There are three likely scenarios that are happening:

1) The local dealer is ignorant of the sales tax laws, and doesn't really know what he is doing.

2) The local dealer is scamming the customer and the state by charging sales tax and not remitting it. A call to the state tax agency may clear it up.

3) The state is getting more agressive about collecting sales tax revenue, and since it would be very difficult to audit individuals for out of state purchases, but very easy to audit a business, they may have simply placed the burden for the collection of tax on the easily auditble entity that is located in their state.




Scott

 

[Edmond]

The dealers here want to charge the actual sales tax on the gun when you do a transfer. I think it's to discourage you from buying from anyone but them. But I don't buy from them anyway because of policies like that. In fact, I don't buy anything from them, not even paper targets.

 

[Nathanael_Greene]

Charging sales tax on something they're not actually selling? Doesn't that constitute fraud?

I'd sure make an inquiry of my state's revenue office over something like that.

 

[Gunsnrovers]

Thanks Taxphd, my goof. Buyer pays.

From the CA DOJ web page Q&A section:

18.
What fees can I charge for handling a Private Party Transfer (PPT)?

If the transaction is a PPT, you are restricted to charging no more than $25.00 in State fees described and $10.00 per firearm for conducting the PPT.? For example:
?

a.
For a PPT involving one or more handguns, the total allowable fees are $35.00 for the first handgun, and $31.00 for each subsequent handgun.

b.
For PPTs involving one or more long guns, the State fees are limited to $25.00 for the whole transaction plus $10.00 dealer fee per firearm transferred.


(PC section 12082)

http://caag.state.ca.us/firearms/dlrfaqs.htm#18

 

[TaxPhd]

Gunsnrovers,

You are correct about fees charged on the transfer in accordance with DOJ rules. But sales tax is a totally different department, not governed by the DOJ. In California, that is governed by the California State Board of Equalization. Totally different sets of rules.



Scott

 

[Gunsnrovers]

I understand. The only fees a FFL can/should charge here in California would be the fees shown above. It's none of their business and the state does not require the FFL to know the details of the sale/price/agreement beyond the legal requirerments. The FFL has no business collecting taxes in a face to face/private party transaction. Any FFL doing so is either ignorant of the law or is illegaly charging their customers.

Consignment sales or transfer through another FFL are a whole different ball game.

 

[TaxPhd]

"The FFL has no business collecting taxes in a face to face/private party transaction. Any FFL doing so is either ignorant of the law or is illegaly charging their customers."

Not necessarily.

Think about buying a car out of state in Oregon where there is no sales tax. Then, registering the car in California. The DMV (or whoever does the registration) didn't sell you the car. But, they will assess sales tax (that wasn't paid at the point of purchase). Why? Because it facilitates the collection of tax in the state. California may well have decided that any dealer (of any type of good) that is party to a transaction in California, must either collect tax on the sales price, or ascertain that the sales tax was otherwise paid.



Scott