tax on FFL transfer question

[Ed]

I just was talking to a dealer from the listings on Gunbroker about doing a transfer for me. He was adding it up and said sttate sales tax.(the transfer would be from Texas and I'm in Arkansas. I told him that I didn't think he could charge sales tax sincce it was out of state. I rambeled on about having a reg in front of me and having a C&R liscense. He then said, Oh well I guess we can work around it and not charge it this time. I have no clue if I should be paying it and if I should I will. I just feel like he was trying to get some extra and when I called him on it changed his mind. Understand that me saying the C&R stuff was just to let him know I wasn't totally unfamiliar with FFL regs. So what's the truth? Should I pay sales tax?

 

[VictorLouis]

IF your state taxes 'services', and the transfer would fall under that umbrella, then yes. Otherwise, it definitely sounds as though he was trying to pull the wool over you.

 

[Daniel T]

Sales tax on the gun or sales(service?) tax on the transfer fee?

Anyhow, there is no way you should pay sales tax on the gun. He was probably trying to steal some more money from you.

 

[TaxPhd]

Depends on state law.

If your state has a sales tax, you should be paying "Use Tax" (self assessed sales tax on an out of state purchase), but very few people do this.

Given that payment of use tax is almost unheard of, several states have gotten aggressive and are requiring businesses within their state (your FFL, for example) that have anything to do with an out of state transaction to charge the sales tax.

 

[Telperion]

Since you're the buyer, how does the FFL know what you paid and what to charge for sales tax? I thought you paid the seller directly, who then ships it to your FFL who finishes the transfers. If the FFL insists on collecting a use tax for the out-of-state purchase, why can't you just claim a purchase price of $1?

 

[Graystar]

For the seller:
Any product delivered or service rendered within the businesses state should collect sales tax. If the product is delivered out of state, or service rendered out of state then the business shouldn't collect sales tax.

For the buyer:
if your state has a use tax (usually equal to the sales tax) the you are obligated to pay the tax to the state. Use tax works on the honor system, but practically no one pays.

Here in NY, the tax agents go to New Jersey to the mall, watch how much loot is put into a NY car, then they send the registered owner an estimated tax bill that is usually way too high. The only way to lower it is to produce the receipts. If you claim it wasn't you, then they want to know who it was so that they can send the bill to them. No real way out of it. Once you produce the receipts they've got you for real.

Of course, the thing to do is to say you were exchanging some gifts. I don't think anyone thinks of that.

 

[CZ-100]

Here in Florida you get charged sales tax on the transfer fee ($20) not the price of the gun.

 

[pytron]

Same in Washington. Have to pay sales tax on the transfer fee, but not on the gun.

What if the gun was a gift or you were sending it to yourself? Of course you wouldn't pay sales tax on the gun, nor should the FFL be collecting it.

-Pytron

 

[BluesBear]

I don't pay a tax on my transfer fee in WA.
A transfer is not a sale.