Sales tax?

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tschlar

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I was online, shopping for a rifle. Found one from an out of state dealer. My local FFL dealers charge a fee for their labor in taking delivery of my out of state gun. Of course, I paid no sales tax to the seller. My local FFL wants to charge me my home state sales tax. Is this something new? :mad:
 
How is the dealer liable for sales tax on the firearm? They never took money for the firearm, that deal was between the OP and the out-of-state shop; they only got the transfer fee. So at most they'd have to report tax on the fee; most just roll it all up together and charge $20, 25, 30, etc.

If your shop is trying to charge sales tax on the purchase price of the firearm, you need to find another FFL. Chances are they are pocketing the "tax" you pay; unless your state has some wierd laws.
 
Yeah, that's ludicrous. When I transfer a gun, the FFL doesn't even know how much I paid for it. If your state allows tax to be charged for services, that's all he could collect tax on. Out of state sales tax is supposed to be claimed on my tax return; whether I do or not is between me and the state.
 
tschlar I was online, shopping for a rifle. Found one from an out of state dealer. My local FFL dealers charge a fee for their labor in taking delivery of my out of state gun. Of course, I paid no sales tax to the seller. My local FFL wants to charge me my home state sales tax. Is this something new?
Click to expand...

Everyone above needs to chill. Because tax IS due. Whether it is collected by that firearms dealer or paid by the purchaser directly to the State of Michigan is at question.

I believe almost every state collects a "Use tax" which is similiar to "Sales tax" but is charged on purchases made OUTSIDE your state- mail order for example.

I can't find it on the Michigan site as to who is responsible for collection of the Use Tax, here in Texas it is the buyer- not the FFL who is responsible for paying Use Tax to the State.

OP, I know you're new to THR (Welcome!) ......but C'MON!!!!! Google "State of Michigan" and then find "sales tax"....it took me less than thirty seconds to find this:
http://www.michigan.gov/taxes/0,1607,7-238-43529-154427--,00.html

FFL transfer fees are not taxable in Texas, but they are in some states.
 
When I had a gun transferred, the dealer insisted a bill of sale be included in the package and charged me sales tax on the total. Needless to say, I was not amused by the unexpected additional tariff.

Under the law, do they "buy" from the seller and "sell" to the new owner?
 
What is this tax you speak of?

Kidding aside, isn't a tax due at the point of sale? If you buy something on lets say e-bay in Ohio and you live in Texas there is no tax to be paid is my understanding. But then again since we have to sales tax my knowledge is limited.
 
dogtown tom, I also live in Texas and have never paid a "use tax" on an out of state purchase. Is this something new here? I am hoping that "most states" does not include Texas, which is another reason I am glad to live here, less stupid taxes!!


tschlar, I would contact a couple of other FFLs to see if they do the same thing. If they don't, change dealers.

You can always find a bunch of them listed here, http://v4.beta.gunbroker.com/FFL/DealerNetwork.aspx contact a few not necessarily in your area, but in your state to see what they say.
 
First of all, I'm doubting completely that Freakshow can back that statement up, unless its from a mythical state where the tax code hits every possible transaction....if the dealer was liable for sales tax on your gun, then UPS would be liable for the sales tax on every internet purchase I might make. Pure BS. Your dealer, tsclar, is full of crap and sticking it to you.

However, dogtown tom is correct in that many states require you to pay tax on internet purchases that aren't taxed at the point of sale...here in Kansas, they're crazy enough to ask Amazon, for instance, to tax me at my local rate of which there are thousands of permutations in the state. Alternatively, if Amazon doesn't want to mess with tax and I buy it tax free, I'm required to declare it voluntarily on my income tax form and send it into the state at tax time. Obviously all this burns me because I can't imagine how much it would cost every business in America to keep track of and accurately tax every transaction for every region of the country.

No, Kansas hasn't made marijuana legal and the legislators were not smoking it at the time that vote went through. As a good citizen, I voluntarily submit any and all taxes I'm required to...I just make it a policy not to purchase off the internet.;)
 
Five of the last seven firearms I've purchased were over the internet, from an out-of-state seller, whether Gunbroker auctions or a place like BudsGunShop. I never paid sales tax to the guy who does my transfers, nor to the out-of-state seller who shipped the gun in. Is this what we're talking about? Or are is the OP talking about a special order through the local dealer?

Of course, if the seller tucked the sales tax into the price, I would have no way to know that, but I always thought they can't charge sales tax to someone purchasing from out of state. When I sell/ship products out of Colorado, I never charge the customer for Colorado's sales tax.
 
If your state charges a "use tax" then you owe the taxable amount on the purchase to the state. There is a very common myth that Internet sales are not taxable. In most states, that is not true. It's just that the seller is not responsible for collecting the tax from you; you are still responsible for payment of applicable sales taxes to your state. Some states include a space for this on the annual income tax form.

Since your FFL has to add the received firearm into inventory and then transfer it to you, the state may require that he collect sales tax on the transaction because, technically, he is making the final sale to you. The money you sent to the original seller is simply considered a pre-payment. If this is not the case in your state, then be sure you get the exact portion of the tax code to show the dealer he is not entitled to assess tax on your purchase.

Sorry, guys: Texas does indeed have a use tax and, legally, you are required to remit whatever sales tax would be due under a regular retail sale to the Comptroller.
 
I think it is a scam. I think the dealer is pocketing the cash, and if you want to scam people it is the perfect way. After all, how do you check that he paid the tax he collected from you to the state?

I own a retail business. Every month I report our total sales, and then the taxible (in state) portion. The state then calculates my tax for me. If I was the dealer and did a $30 transfer and collected $40 in sales tax, I would have to lie and report a $484 sale, which is a lie, or the state can't take the tax. I can't just send in "extra", the system does not allow it.

I am sure if I did lie and reported fake big sales, the IRS is somehow tied in and would notice my tax return did not match. Don't know for sure about this one, but it seems like an easy thing for them to do.
 
It depends upon the state, guys.

It changes from state to state.

No answer on this thread applies to all states universally.

Many states have no 'use tax' whatsoever.
The 'use tax' in some states only applies to business purchases, not consumer purchases.
Sales tax in some states apply to services (like an FFL transfer) some don't.

It depends upon the state. You have to look it up.
 
Techincally, sales tax is due on the purchase. You are supposed to report and pay with your income tax(most do not). Use tax is tax owed on the purchase price of items purchased for USE in your business(on cost rather than retail price), not items purchased specifically for retail sale(they would require sales tax on the retail price). It is a sales tax paid by the business on the wholesale price of an item. It is not passed on as a listed tax, it is inclusive in the retail price(generally as part of a service). Some out of state businesses do collect tax for other states but many do not. If a business chain has a store in your state, you will pay tax for your state regardless of where the item ships from(mail order or internet). If shopping out of state(physically), you pay the rate where the store is. In this case, the receiving FFL is transfer only and should not collect tax except on the service(as others have said). It does get confusing, and even more so after being through a sales/use tax audit a few years ago.

FWIW

MFH
 
I too have been asked to pay sales tax to a transfering FFL.
I declined and used a different one.
Had the dealer received the shipment before told me that I would be responsible for the extra cost, we'd have been in a bit of a pickle.
p
 
Those who dog the dealer are wrong to do so. In my state(pa) the sales tax is due and if it was not paid on the seller side then the ffl that receives it is the agent of the sale and must collect sales tax. Just because some of you have not paid it doesnt mean that is wasnt due. If records are checked then someone will have to pay it if it is required in your state. My ffl is a very good frend and he collects the tax and hates it every time. If you walk in and transfer to another person through the ffl then it is a private sale and no tax is collected. Between dealers somebody must collect it if its required.
 
Sorry, guys: Texas does indeed have a use tax and, legally, you are required to remit whatever sales tax would be due under a regular retail sale to the Comptroller.
Click to expand...

So, you order a BoreSnake from Cabela's, you pay $15.99 + $5.95 (S&H) = $21.94, and then on top of that, you pay sales tax to the Comptroller? Or is this only for firearms alone?
 
In Oklahoma, anything you buy out of state over the Internet or mail order, if the seller doesn't collect Oklahoma sales tax, you are responsible to report the purchase on your Oklahoma income tax return and pay the tax at that time with your income tax, or if you are due a refund, your refund will be reduced accordingly.

Sux.

Woody
 
CoRoMo said:
So, you order a BoreSnake from Cabela's, you pay $15.99 + $5.95 (S&H) = $21.94, and then on top of that, you pay sales tax to the Comptroller? Or is this only for firearms alone?
Click to expand...

Since Cabela's has locations in Texas, they are supposed to collect sales tax on your Internet transaction.

However, if you ordered something from Bud's Gun Shop, which does not have a Texas retail location, you would be responsible for paying a use tax directly to the Comptroller. This applies to any purchase that would be taxable if bought from a Texas retailer, say a purchase or books or movies from Amazon.com.

For example, in Houston, I would be responsible for paying $1.81 on the above transaction.

That being said, I have no idea how you're supposed to pay it. :D
 
Use taxes are pretty much unenforceable and I am unaware of any consumer that has ever been penalized for not paying a use tax. I'm not even aware of anyone who has ever paid a use tax.
 
Hopefully the mods will approve....

Here's an idea: Since buying & selling IS gun related, it would be helpful to know whether you should expect to pay tax on firearms you purchase from out of state. If we could get THR forum members to research THEIR OWN STATE sales & use tax laws and post a link in this thread it would answer a lot of folks questions. Don't copy and paste the entire law or tax code, just a link to your state .gov website that explains sales & use tax.



I'll start:

Texas: http://www.window.state.tx.us/taxinfo/sales/questions.html




.
 
This site covers all the states:

http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/

State Use Tax Link
Alabama Yes http://www.ador.state.al.us/salestax/index.html
Alaska No
Arizona Yes http://www.azdor.gov/brochure/610.pdf
Arkansas Yes http://www.arkansas.gov/dfa/excise_tax_v2/st_index.html
California Yes http://www.ftb.ca.gov/current/usetax.shtml
Connecticut Yes http://www.ct.gov/drs/cwp/view.asp
Colorado Yes http://www.revenue.state.co.us/fyi/html/generl10.html
Delaware No
Florida Yes http://dor.myflorida.com/dor/taxes/sales_tax.html
Georgia Yes http://www.etax.dor.ga.gov
Hawaii Yes
Idaho Yes http://tax.idaho.gov/use_tax.htm
Illinios Yes http://www.revenue.state.il.us/Businesses/TaxInformation/Sales/rot.htm
Indiana Yes http://www.state.in.us/dor/individual/use.html
Iowa Yes http://www.state.ia.us/tax/educate/78535.html
Kansas Yes
Kentucky Yes http://revenue.ky.gov/business/salesanduse.htm
Louisiana Yes http://www.revenue.louisiana.gov/sections/individual/conuse.aspx
Maine Yes http://maine.gov/revenue/salesuse/homepage.html
Maryland Yes http://individuals.marylandtaxes.com/usetax/default.asp
Massachusetts Yes http://www.mass.gov/Ador/docs/dor/Publ/PDFS/sales_use_07.pdf
Michigan Yes http://www.michigan.gov/treasury/…….html
Minnesota Yes http://www.taxes.state.mn.us/…….CM1_002975.pdf
Mississippi Yes http://www.mstc.state.ms.us/taxareas/sales/main.htm
Missouri Yes http://dor.mo.gov/tax/business/sales/
Montana No
Nebraska Yes http://www.revenue.ne.gov/salestax.htm
Nevada Yes http://tax.state.nv.us/documents/…..pdf
New Hampshire No
New Jersey Yes http://www.state.nj.us/treasury/taxation/su_10.htm
New Mexico Yes http://www.statetaxcentral.com/New_Mexico/Sales_and_Use_Taxes/
New York http://www.tax.state.ny.us/pdf/publications/sales/pub850_207.pdf
North Carolina Yes http://www.dor.state.nc.us/taxes/sales/
North Dakota Yes http://www.nd.gov/tax/misc/faq/salesanduse/index.html
Ohio Yes http://tax.ohio.gov/divisions/sales_and_use/index.stm
Oklahoma Yes
Oregon No
Pennsylvania Yes http://www.revenue.state.pa.us/revenue/cwp/view.asp?a=13&q=250484
Rhode Island Yes http://www.tax.ri.gov/documents/information/use_tax.pdf
South Carolina Yes http://www.sctax.org/Tax+Information/Sales+and+Use+Tax/
South Dakota Yes http://www.state.sd.us/drr2/businesstax/st/usetax.htm
Tennessee Yes http://state.tn.us/revenue/tntaxes/salesanduse.htm
Texas Yes http://www.window.state.tx.us/taxinfo/sales/faq_use.html
Utah Yes http://www.tax.utah.gov/sales/
Vermont Yes http://www.state.vt.us/tax/pdf.word.excel/misc/majorvttax-s&u.pdf
Virginia Yes
Washington Yes http://dor.wa.gov/Docs/Pubs/ExciseTax/RetailSales_UseTax/UseTax.pdf
West Virginia Yes
Wisconsin Yes http://www.revenue.wi.gov/html/sales.html
Wyoming Yes
 
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