Sales tax on transfer & consignment guns?

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44wheelman

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Why are there inconsistent policies on sales tax? Most of the shops in the area charge a sales tax on consignment guns they sell, some don't. Some collect sales tax on out of state transfers (internet purchases & such) & some don't. How can these stores collect tax on an out of state transfer? Why the inconsistency? Anybody else notice this?

Of course I only support those stores with the more conservative tax policies.
 
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Why are there inconsistent policies on sales tax? Most of the shops in the area charge a sales tax on consignment guns they sell, some don't. Some collect sales tax on out of state transfers (internet purchases & such) & some don't. How can these stores collect tax on an out of state transfer? Why the inconsistency? Anybody else notice this?

Of course I only support those stores with the more conservative tax policies.
 
I've run into the same problem, and I sometimes suspect the tax is not required and the store just pockets whatever they collect. Of course, what is taxable depends on state and local laws. This is really a problem at gun shows.
 
My state has a tax known as Use Tax. An example is a grocer takes a can of peas home for supper, he must pay the Use tax on that can of peas to the state. Or if you order something mail order you are obligated to send the tax, just like you bought it in state, to the Revenue Dept. Astoundingly, hardly anyone bothers to do this.

On the consignment issue, I would think that the determination must be made just who is the seller, the consignment store or the person who put it up for consignment. My state also has a rule that you can have one yard sale at your residence a year, and any more and you must apply for a sales tax number. Just thinking off the top of my head I would think the state would consider the consignment store the seller.
 
We have two shops not two miles apart. One charges the typical flat fee, the other insists that they “must” as in are “required to”, charge a % of the total transaction. Now I suspect the Gov. Charlie would like to get a cut on every transaction, but he is not entitled to a cut from a FTF.
I suggested to the % shop that I only buy guns sold for less than $5, and was a very successful shopper.
This resulted in a great deal of stuttering and muttering, “of course WE would not be a party to any scam like that”. My analysis, they pocket the $$$.
I would say that there is no reason for anyone to indicate the price on the paperwork they include when shipping the gun, send it by mail.
All transactions are officially $1.
 
Sales tax is a state by state, and sometimes county/city, issue. If the state/city/county requires tax be collected on used items (some don't), then they collect it. If your state requires it, and your pusher doesn't seem to collect it, he's likely backing it out of the sales price. If you buy a Chief's Special for $330 OTD, and sales tax is 10%, then you have paid $300 for the gun and $30 in tax, even if your pusher didn't state it quite like that.
 
oldRoger, in our state it is just not clear whether sales tax must be collected on internet sales of firearms or not.

The Department of Revenue, surprisingly, says yes!

The issue is where the sale takes place. Does it take place where the gun is paid for or where you fill out the paper work, the b/g check is done and you take possession of it?

One FFL charges tax (and I know he remits it to the Dept. of Revenue) and several others don't.

Fortunately, the Dept. rarely audits businesses unless they stop remitting sales tax, there is a complaint of some sort of cheating, or the amount remitted suddenly drops in proportion to the amount usually sent.

Since the Dept. says it must be collected, then the FFL who does so is probably smart to do that. I do notice that he doesn't do a lot of business with internet buyers, though, since so many other FFLs don't collect the tax.

He does have the best shop locally and the best reputation for honesty.

Let me know the next time you venture this far south and I will take you to the shop and lunch.

Bob
 
25 years ago, when I did several gun shows a year as a vendor,in Washington they always passed out a form wanting too know how much you sold, and how much your sales tax was that you collected(I was an Oregon dealer), must of the vendors just tossed the form in the trash
 
As others have said, it varies a lot by state and locality.

In California, the state levies a sales tax, and so can counties and municipalities. The State Franchise Tax Board, who issues licenses to collect tax to businesses of all sizes, also collects the money taken in via sales of all kinds.

The actual percentage thus varies quite a bit; in Santa Clara County, where I live, it's 8.5 percent and likely to increase within the next year.

The state keeps everyone honest this way: depending on your volume of tax collected, you file a tax return and send along the collected monies quarterly, monthly or weekly.

And yes, it applies to used and consignment firearms, just as it applies to any other used or consignment item for sale, including auto auctions and the like.

In dealer to dealer transactions, the buying dealer buys wholesale, but the selling dealer (of any good or commodity) must provide the buyer his resale number in order for the buyer to avoid paying sales tax. Note that the buyer in this instance is the entity that will sell the item retail.

I had such a resale license at one point with a business I had some years ago, and will never do so again. It is a royal pain and complete time-inhalation exercise to fill out the tax forms and rebate the money to the state.

To top it off, I was audited by the IRS one year and actually had a supervising IRS auditor ask me what the payments were that I was making to the state! (This even though the state resale number was included in documentation on the IRS return. Just another reason I so dearly love mindless, incompetent bureaucrats...
icon_mad.gif
)

Bill
(Rant over.)
 
When I do only a transfer, tax is paid only on the transfer fee. That's assuming the buyer made direct payment to the seller and none of my money was involved in the actual sales transaction.
Had I paid the seller for the gun and then received payment from the buyer, I would collect tax on both the gun payment and the transfer fee.
Even though I do not collect sales tax on the out of state purchases being transferred, the buyer is required to report and pay the sales tax, which in this case, is called a use tax. Any "tax free" out of state purchase falls into this category and the buyer has the burden of reporting and paying the "use tax" aka sales tax. It's an honor system and I don't know of a single person who ever reports and pays taxes on out of state purchases....except me, of course...
icon_smile.gif

Since consignment sales involve an actual sale by the dealer, and creates profit for the dealer, sales tax is collected.
 
I'm in Alameda county PRK 9.75% sales tax.. ouch. oh yeah thats on top of property tax, almost 10% state income tax and 30-something % to uncle Barry. plus various and sundry 'fees' and such. The PRK legislature recently got into a pissing match over whether they can call a tax a fee and avoid the 66.7% majority vote to implement a 'tax' wheres a fee only needs 50.1% vote and the tax raisers usually can muster 50.1% sorry rant off.

I just bought a gun PPT last weekend. I paid the guy the cash price we agreed on in the store and paid 35$, no tax to the FFL for the DROS

i have bought many consignment guns and some stores charge tax and some stores dont. im PRK, I think technically its a PPT where the other party just doesnt happen to be physically present, they have signed their 'half' of the documents and left it for the FFL to sell. He skims his 20% off the top and there ya go.

then i have had some FFLs tell me that on a PPT gun shipped in from out of state, they have to collect sales tax on the price i paid. fine. it was a gift. prove it wasnt. me thinks they are just putting the tax in their pocket on that one.
 
Originally posted by gunsmith11:
25 years ago, when I did several gun shows a year as a vendor,in Washington they always passed out a form wanting too know how much you sold, and how much your sales tax was that you collected(I was an Oregon dealer), must of the vendors just tossed the form in the trash
Click to expand...

that was just the show promoter covering his ass.
 
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