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Online sales and taxes
10/23/2011 10:00:41 AM
Like ive said in previous threads, im in the process of getting a home based FFL. Ive been getting things set up with my tax guy on the business side and we got to the point of collecting taxes. He told me that even on gunbroker i will have to charge state and federal taxes.
I argued with him that in the 10 years that ive been buying guns online, ive never been charged any taxes unless it was purchased in my state. We argued for a while about it. He said he would research it more and get back to me.
Does anyone have any definite information i can take back to him? I dont want to scare people off from buying from me just because of this. Thanks guys
I argued with him that in the 10 years that ive been buying guns online, ive never been charged any taxes unless it was purchased in my state. We argued for a while about it. He said he would research it more and get back to me.
Does anyone have any definite information i can take back to him? I dont want to scare people off from buying from me just because of this. Thanks guys
10/23/2011 10:19:18 AM
As far as state sales tax...
My dads girlfriend is a MN State Sales and Use Tax Auditor. She says for an out of state purchase (ie. internet sale) it is up to the buyer to declare and pay the sales tax on a purchase in their State. Yes, all of us that buy online are supposed to be declaring Sales Tax on out of state purchases.
I only need to collect for in state purchases.
That's how it's on the books in Minnesota.
Mike in MN
My dads girlfriend is a MN State Sales and Use Tax Auditor. She says for an out of state purchase (ie. internet sale) it is up to the buyer to declare and pay the sales tax on a purchase in their State. Yes, all of us that buy online are supposed to be declaring Sales Tax on out of state purchases.
I only need to collect for in state purchases.
That's how it's on the books in Minnesota.
Mike in MN
10/23/2011 10:22:15 AM
Originally Posted By Walker77:
Like ive said in previous threads, im in the process of getting a home based FFL. Ive been getting things set up with my tax guy on the business side and we got to the point of collecting taxes. He told me that even on gunbroker i will have to charge state and federal taxes.
I argued with him that in the 10 years that ive been buying guns online, ive never been charged any taxes unless it was purchased in my state. We argued for a while about it. He said he would research it more and get back to me.
Does anyone have any definite information i can take back to him? I dont want to scare people off from buying from me just because of this. Thanks guys
Like ive said in previous threads, im in the process of getting a home based FFL. Ive been getting things set up with my tax guy on the business side and we got to the point of collecting taxes. He told me that even on gunbroker i will have to charge state and federal taxes.
I argued with him that in the 10 years that ive been buying guns online, ive never been charged any taxes unless it was purchased in my state. We argued for a while about it. He said he would research it more and get back to me.
Does anyone have any definite information i can take back to him? I dont want to scare people off from buying from me just because of this. Thanks guys
Not sure what Federal Taxes he thinks need to be collected, State Sales varies with each state.
10/23/2011 10:23:55 AM
Originally Posted By RenegadeX:
Not sure what Federal Taxes he thinks need to be collected, State Sales varies with each state.
Originally Posted By Walker77:
Like ive said in previous threads, im in the process of getting a home based FFL. Ive been getting things set up with my tax guy on the business side and we got to the point of collecting taxes. He told me that even on gunbroker i will have to charge state and federal taxes.
I argued with him that in the 10 years that ive been buying guns online, ive never been charged any taxes unless it was purchased in my state. We argued for a while about it. He said he would research it more and get back to me.
Does anyone have any definite information i can take back to him? I dont want to scare people off from buying from me just because of this. Thanks guys
Like ive said in previous threads, im in the process of getting a home based FFL. Ive been getting things set up with my tax guy on the business side and we got to the point of collecting taxes. He told me that even on gunbroker i will have to charge state and federal taxes.
I argued with him that in the 10 years that ive been buying guns online, ive never been charged any taxes unless it was purchased in my state. We argued for a while about it. He said he would research it more and get back to me.
Does anyone have any definite information i can take back to him? I dont want to scare people off from buying from me just because of this. Thanks guys
Not sure what Federal Taxes he thinks need to be collected, State Sales varies with each state.
Maybe it was just state. I thought he said federal too. I was just stressing on collecting tax.
10/23/2011 11:06:18 AM
Isn't here a 11% federal tax on complete new guns sold? How is that collected?
I was told by a site sponsors that even if you dyi your own gun you are obligated to send in the 11% tax.
I have only paid sales tax to businesses in my state but have been told the consumer is liable for all sales tax to be reported.
I am sure there will be legislation pertaining to this coming soon...
I was told by a site sponsors that even if you dyi your own gun you are obligated to send in the 11% tax.
I have only paid sales tax to businesses in my state but have been told the consumer is liable for all sales tax to be reported.
I am sure there will be legislation pertaining to this coming soon...
10/23/2011 12:22:03 PM
Originally Posted By Walker77:
He told me that even on gunbroker i will have to charge state and federal taxes.
He told me that even on gunbroker i will have to charge state and federal taxes.
First, he's an idiot or Obama managed to sneak in a secret Federal sales tax we know nothing about.
Two. Typically, state sales taxes are only charged to residents of your state or to sales that occur completely within your state. Almost every state that has a sales tax also has a "use tax" at an equivalent rate. An out of state seller does not usually collect sales tax for states in which they have no "business presence".
For example:
A. A resident of Texas purchases a gun from Bud's in Kentucky.....no Texas sales tax charged by Buds. There is no sales tax collected on the sale by the receiving dealer in Texas, nor is there a tax in Texas on the transfer fee. Texas law requires the buyer to remit "use tax to the state comptrollers office. (I have yet to meet anyone who has ever done so)
B. A resident of Dallas, purchases a gun via phone order from CDNN in Abilene. CDNN ships the gun to the buyers FFL in Dallas. CDNN will charge Texas sales tax on the purchase.
C. A resident of Texas, purchases a gun via internet/phone/mail order from a Cabelas in Minnesota. As Cabelas has stores in Texas it will collect Texas sales tax on the purchase.
D. A resident of Texas, buys a rifle from a gun store in Oklahoma City. The dealer will charge him OK sales tax. The buyer will owe no Texas sales tax on the purchase.
While your state sales tax code isn't exactly the same as mine, it will be very similiar.
Washington state requires dealers to collect WA sales tax on firearms not even purchased in WA. If no invoice is included the dealer assigns a value and charges tax based on that.
Originally Posted By Backwoodz:
Isn't here a 11% federal tax on complete new guns sold? How is that collected?
I was told by a site sponsors that even if you dyi your own gun you are obligated to send in the 11% tax.
I have only paid sales tax to businesses in my state but have been told the consumer is liable for all sales tax to be reported.
I am sure there will be legislation pertaining to this coming soon...
Isn't here a 11% federal tax on complete new guns sold? How is that collected?
I was told by a site sponsors that even if you dyi your own gun you are obligated to send in the 11% tax.
I have only paid sales tax to businesses in my state but have been told the consumer is liable for all sales tax to be reported.
I am sure there will be legislation pertaining to this coming soon...
The Federal Excise tax is paid by manufacturers. not customers.
10/23/2011 1:12:06 PM
The Federal Excise tax is paid by manufacturers. not customers.
so they collect in the advertised price? or is it additional?
This was brought to my attention from a site sponsor/weapon manufacturer when I asked about buying a stripped lower at a later date to finish a upper kit.
10/23/2011 3:24:29 PM
Originally Posted By Backwoodz:
This was brought to my attention from a site sponsor/weapon manufacturer when I asked about buying a stripped lower at a later date to finish a upper kit.
The Federal Excise tax is paid by manufacturers. not customers.
so they collect in the advertised price? or is it additional?
This was brought to my attention from a site sponsor/weapon manufacturer when I asked about buying a stripped lower at a later date to finish a upper kit.
It is paid by the manufacturer. By the time you purchase the firearm from a retailer the tax has already been collected. If you just purchase one stripped lower and a parts kit, and build your own firearm, you don't pay the tax.
By the same token, if you purchase a lower, LPK, and complete upper from one vendor on the same invoice then FAET is due (by the vendor) since it sold you a complete rifle in "knockdown condition". See FAQ #2: http://www.ttb.gov/firearms/faet-faqs.shtml#Manufacturers. OTOH if you purchase those items separately, on different invoices, from different vendors, then no tax is due.
10/23/2011 3:49:54 PM
Originally Posted By Bubbles:
It is paid by the manufacturer. By the time you purchase the firearm from a retailer the tax has already been collected. If you just purchase one stripped lower and a parts kit, and build your own firearm, you don't pay the tax.
By the same token, if you purchase a lower, LPK, and complete upper from one vendor on the same invoice then FAET is due (by the vendor) since it sold you a complete rifle in "knockdown condition". See FAQ #2: http://www.ttb.gov/firearms/faet-faqs.shtml#Manufacturers. OTOH if you purchase those items separately, on different invoices, from different vendors, then no tax is due.
Originally Posted By Backwoodz:
This was brought to my attention from a site sponsor/weapon manufacturer when I asked about buying a stripped lower at a later date to finish a upper kit.
The Federal Excise tax is paid by manufacturers. not customers.
so they collect in the advertised price? or is it additional?
This was brought to my attention from a site sponsor/weapon manufacturer when I asked about buying a stripped lower at a later date to finish a upper kit.
It is paid by the manufacturer. By the time you purchase the firearm from a retailer the tax has already been collected. If you just purchase one stripped lower and a parts kit, and build your own firearm, you don't pay the tax.
By the same token, if you purchase a lower, LPK, and complete upper from one vendor on the same invoice then FAET is due (by the vendor) since it sold you a complete rifle in "knockdown condition". See FAQ #2: http://www.ttb.gov/firearms/faet-faqs.shtml#Manufacturers. OTOH if you purchase those items separately, on different invoices, from different vendors, then no tax is due.
As far as the Federal FAET Tax, I believe that might depend on if you are an Type 01 or a Type 07.
Either way, sales tax is collected on behalf of your State FAET is collected on behalf of TTB.
There is a little debate for an Type 01 selling stripped lowers with an LPK, if there is a mechanism for paying FAET. Basically it's assumed if they are not sold as a combined "Kit" then they are separate and an 01 dealer collects no tax.
As far as Sales/Use Tax just look into your State laws and you should be good to go for in-state purchases only.
Mike in MN
10/23/2011 3:57:07 PM
This just changed in my state, I had to pay taxes on the Springfield Range Officer I picked up Gunbroker. FFL's are required to collect taxes now on all transfers, even if you buy it online from another state. It is the gay...
10/23/2011 6:20:56 PM
You as the seller when shipping out of state need NOT charge any tax to the customer.
Not sure what "Federal Tax" He's talking about, but theres no such thing.
State sales tax when selling to customers in your state only.
SOME states are requiring dealer to charge tax to consumers on incoming transfers, but here at least its not enforced. I don't charge them tax because I'm not selling them a product, I'm selling them a service (the transfer paperwork) which is non taxable in the state of Nevada.
Either way, you as the shipping dealer don't have to be concerned with that!
Not sure what "Federal Tax" He's talking about, but theres no such thing.
State sales tax when selling to customers in your state only.
SOME states are requiring dealer to charge tax to consumers on incoming transfers, but here at least its not enforced. I don't charge them tax because I'm not selling them a product, I'm selling them a service (the transfer paperwork) which is non taxable in the state of Nevada.
Either way, you as the shipping dealer don't have to be concerned with that!
10/23/2011 7:57:17 PM
Originally Posted By RLTW375:
This just changed in my state, I had to pay taxes on the Springfield Range Officer I picked up Gunbroker. FFL's are required to collect taxes now on all transfers, even if you buy it online from another state. It is the gay...
This just changed in my state, I had to pay taxes on the Springfield Range Officer I picked up Gunbroker. FFL's are required to collect taxes now on all transfers, even if you buy it online from another state. It is the gay...
I suppose this could be considered collecting "Use Tax" on the item from another state because you are not dealing with an actual sale. Because in the State of MN anyways, you are supposed to declare and pay "Use Tax" on just about anything purchased outside the state.
"Use Tax" is just another way for a State to capture revenue based on sales that get around "Sales Tax". Which a post a little earlier stated above that "Use Tax" is normally set up at the same rate as "Sale Tax".
In speaking to Auditors about "Use Tax", if there is any paperwork showing an out of state purchase they would have the ammunition to go after the purchaser for "Use Tax". I suppose a transfer would give the State a great tool to track purchases out of state.
Mike in MN
