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9/22/2017 12:11:25 AM
Posted: 9/23/2005 9:44:36 AM EDT
I run into this issue a LOT.

I sell a LOT of guns on the net and I can't believe how common it is. One would think everyone would know this but based upon the feedback I'm getting apparantly many don't. As it is obvious many people don't know this or maybe "some" dealers have just found a way to make an extra 6% I will post this for the benefit of those who don't know so they won't be taken advantage of in the future.

Doing another batch of Glocks and just sold one to a guy in KS who wanted to know what his total will be WITH sales tax and everything. He seemed a bit surprised when I informed him that no sales tax would be applied to his order.

Here's how this works:

I am a Florida dealer who is certified to collect sales tax in FLORIDA ONLY. That means even if I wanted to I cannot legally collect sales tax from a person in any other state UNLESS I also have a business and a sales tax certificate in THAT state.

If you are buying from an out of state dealer you SHOULD NOT pay sales tax. If you are ASKED to pay sales tax request a copy of the dealers sales tax certificate. If he is not certified to collect sales tax in YOUR STATE he is collecting taxes illegally and I can pretty well guarantee you he is NOT reporting those sales to the state.

When a guy is only making about 10% on a internet deal he may be tempted to earn an extra 6%.

Even if he is a dealer in your state he may NOT be certified to collect sales tax. If he doesn't have a tax certificate he cannot legally collect sales tax. And in fact it would be illegal for him to do so.

The confusion comes from places like Gateway.com that charge you sales tax on internet purchases. This is because they have a Gateway store in every state and are certified in every state to collect sales tax. They HAVE to. But this has created the misconception that sales tax applies on ALL out of state purchases. It does NOT.

If a person is not certified to collect sales tax in your state it is illegal for them to do so.

I hope this clears any confusion and finally puts this issue to rest for anyone who might not have already known this.
Link Posted: 9/23/2005 9:46:33 AM EDT
THanks for the heads up.
Link Posted: 9/23/2005 9:48:21 AM EDT
At least until the Feds decide to do something different anyway.
Link Posted: 9/23/2005 9:51:00 AM EDT
I was told by the local dealers here that if I buy a gun from a website and have it shipped to them here in Louisiana, I Have to pay the State(Louisiana) and local taxes because they have to show it as a sale. Is this correct?
Link Posted: 9/23/2005 9:54:12 AM EDT

Originally Posted By CajunMojo:
I was told by the local dealers here that if I buy a gun from a website and have it shipped to them here in Louisiana, I Have to pay the State(Louisiana) and local taxes because they have to show it as a sale. Is this correct?



Pay the sales tax on the transfer fee, then pay the tax on the zero dollars you are paying them for the gun itself.

See Steyr's math on profit.
Link Posted: 9/23/2005 9:56:03 AM EDT
[Last Edit: 9/23/2005 10:03:08 AM EDT by SteyrAUG]

Originally Posted By CajunMojo:
I was told by the local dealers here that if I buy a gun from a website and have it shipped to them here in Louisiana, I Have to pay the State(Louisiana) and local taxes because they have to show it as a sale. Is this correct?




If you are buying from a PRIVATE SELLER have them invoice you directly and have them include NOTHING with the firearm indicating sale price. Tell them you paid $5.00.

If it is coming from a FFL supplier and the FFL is the person who pays the invoice then it IS a local sale and sales tax applies.

If it is coming from a FFL supplier and they accepted payment from YOU directly then technically YOU paid for it and not them and sales tax SHOULDN'T apply.

However they will have an invoice with a price and it was shipped on their FFL so they can put you over a barrel if they felt like it.
Link Posted: 9/23/2005 9:57:24 AM EDT

Originally Posted By SmilingBandit:

Originally Posted By CajunMojo:
I was told by the local dealers here that if I buy a gun from a website and have it shipped to them here in Louisiana, I Have to pay the State(Louisiana) and local taxes because they have to show it as a sale. Is this correct?



Pay the sales tax on the transfer fee, then pay the tax on the zero dollars you are paying them for the gun itself.

See Steyr's math on profit.



+1.



You need to find a more honest gun dealer.
Link Posted: 9/23/2005 9:57:28 AM EDT
[Last Edit: 9/23/2005 9:58:48 AM EDT by SteyrAUG]

Originally Posted By SmilingBandit:

Originally Posted By CajunMojo:
I was told by the local dealers here that if I buy a gun from a website and have it shipped to them here in Louisiana, I Have to pay the State(Louisiana) and local taxes because they have to show it as a sale. Is this correct?



Pay the sales tax on the transfer fee, then pay the tax on the zero dollars you are paying them for the gun itself.

See Steyr's math on profit.



Edit: You are correct.
Link Posted: 9/23/2005 10:04:01 AM EDT
[Last Edit: 9/23/2005 10:04:46 AM EDT by photoman]
EDIT: all cleared up nevermind
Link Posted: 9/23/2005 10:05:24 AM EDT
[Last Edit: 9/23/2005 10:05:47 AM EDT by SteyrAUG]
*
Link Posted: 9/23/2005 10:08:11 AM EDT
how does Columbia House DVD and CD club collect sales tax for every state then? they don't have a brick and mortar store anywhere. I refuse to give them my business anymore
Link Posted: 9/23/2005 10:09:07 AM EDT

Originally Posted By SmilingBandit:

Originally Posted By CajunMojo:
I was told by the local dealers here that if I buy a gun from a website and have it shipped to them here in Louisiana, I Have to pay the State(Louisiana) and local taxes because they have to show it as a sale. Is this correct?



Pay the sales tax on the transfer fee, then pay the tax on the zero dollars you are paying them for the gun itself.

See Steyr's math on profit.



Yup, in short Steyr is warning us about greedy bastards!
Link Posted: 9/23/2005 10:09:55 AM EDT
SteyrAug,

answer this if you can. If I go to a gunshow and buy from an out of state dealer that's at my local gunshow (I'm in state and the dealer is out of state), they always charge me sales tax, but they dont have a tax certificate for my state or do they? Do traveling FFL's have to get a tax certificate for every state they do business in?
Link Posted: 9/23/2005 10:11:33 AM EDT
Well, I've had 3 dealers tell me that they have to charge me sales tax on the cost of the weapon so far.
Link Posted: 9/23/2005 10:14:07 AM EDT
[Last Edit: 9/23/2005 10:16:58 AM EDT by Dace]

Originally Posted By AssaultRifler:
SteyrAug,

answer this if you can. If I go to a gunshow and buy from an out of state dealer that's at my local gunshow (I'm in state and the dealer is out of state), they always charge me sales tax, but they dont have a tax certificate for my state or do they? Do traveling FFL's have to get a tax certificate for every state they do business in?



Technically anyone doing business within a state has to.

They have to collect sales tax because they are doing business in that state and thats where the transaction is occuring. You do not have to have a sales tax cert to collect sales tax. Even if you do not have one you still must collect sales tax. This is where SteyrAug is wrong I think.

Cross state transactions, when the dealer is in one state and buyer is in another, do not fall under state laws but under federal laws.
Link Posted: 9/23/2005 10:15:01 AM EDT

Originally Posted By AssaultRifler:
how does Columbia House DVD and CD club collect sales tax for every state then? they don't have a brick and mortar store anywhere. I refuse to give them my business anymore



They are certified in every state to collect sales tax.
Link Posted: 9/23/2005 10:15:32 AM EDT

Originally Posted By BenDover:
At least until the Feds decide to do something different anyway.



Currently there is no Federal Sales Tax, it exists at the state level only.
Link Posted: 9/23/2005 10:15:36 AM EDT
[Last Edit: 9/23/2005 10:32:36 AM EDT by KScoltAR]
Ooops! I guess I've never thought too deeply about why some internet sales charged sales tax and others didn't. Thanks for clearing that up. This is why I wanted to do business with SteyrAug! (not to mention his great prices!)
Link Posted: 9/23/2005 10:19:19 AM EDT
[Last Edit: 9/23/2005 10:32:07 AM EDT by SteyrAUG]

Originally Posted By AssaultRifler:
SteyrAug,

answer this if you can. If I go to a gunshow and buy from an out of state dealer that's at my local gunshow (I'm in state and the dealer is out of state), they always charge me sales tax, but they dont have a tax certificate for my state or do they? Do traveling FFL's have to get a tax certificate for every state they do business in?



I am certified to collect sales tax on sales that occur in MY STATE only.

If I plan on conducting business in neighboring states I must be certified to collect sales tax by those states as well. Ask to see their sales tax certificate.

Link Posted: 9/23/2005 10:21:30 AM EDT

Originally Posted By CajunMojo:
Well, I've had 3 dealers tell me that they have to charge me sales tax on the cost of the weapon so far.



Here's what happens.

Local dealer makes 10% on a gun and notices the gooberment gets 6% for virtually NOTHING. Also the additional 6% means a total price of 16% markup of which the dealer almost splits with the gooberment who does virtually NOTHING.

Dealer gets annoyed and tacks on 6% to everything and begins to pocket it. Don't make it legal but it is so common I don't know where to begin.
Link Posted: 9/23/2005 10:22:57 AM EDT

Originally Posted By Dace:

Originally Posted By AssaultRifler:
SteyrAug,

answer this if you can. If I go to a gunshow and buy from an out of state dealer that's at my local gunshow (I'm in state and the dealer is out of state), they always charge me sales tax, but they dont have a tax certificate for my state or do they? Do traveling FFL's have to get a tax certificate for every state they do business in?



Technically anyone doing business within a state has to.

They have to collect sales tax because they are doing business in that state and thats where the transaction is occuring. You do not have to have a sales tax cert to collect sales tax. Even if you do not have one you still must collect sales tax. This is where SteyrAug is wrong I think.

Cross state transactions, when the dealer is in one state and buyer is in another, do not fall under state laws but under federal laws.



And that is what this essentially is.
Link Posted: 9/23/2005 10:26:38 AM EDT
There is a little complication to this. Some states require you to pay sales tax on mail order purchases. The rational is that you are trying to avoid paying tax by using out-of state mai order companies. It's on the honor system, except when you go through an FFL they have a sure way to collect it. I ran into this about 10 years ago when I lived in California. When the FFL wanted me to pay him sales tax, I called the state and they explained it to me this way. The FFL didn't collect tax on used out of state guns.
Link Posted: 9/23/2005 10:28:43 AM EDT
[Last Edit: 9/23/2005 10:42:43 AM EDT by rkbar15]
Tax free Internet sales will eventually cease to exist. Participating states will collect sales/use taxes based on the state where the items are shipped to.

www.streamlinedsalestax.org/index.html
Link Posted: 9/23/2005 10:33:42 AM EDT

Originally Posted By BobP:
There is a little complication to this. Some states require you to pay sales tax on mail order purchases. The rational is that you are trying to avoid paying tax by using out-of state mai order companies. It's on the honor system, except when you go through an FFL they have a sure way to collect it. I ran into this about 10 years ago when I lived in California. When the FFL wanted me to pay him sales tax, I called the state and they explained it to me this way. The FFL didn't collect tax on used out of state guns.



If a person or business is NOT certified to collect tax in YOUR STATE they may not lawfully do so.
Link Posted: 9/23/2005 10:34:57 AM EDT
Well, I ordered some AR lowers (all assembled now, YAY!!) and all I got charged Sales Tax on was the transfer fees. I went through Walker Pawn and Gun in Louisiana, good folks.

Louisiana does ask that you pay Use Tax on out-of-state purchases though if you didn't pay Sales Tax on them at purchase time. The Use Tax is roughly the same rate as the average state Sales Tax and is collected voluntarily on your state income tax form at tax time.

Futuristic
Link Posted: 9/23/2005 10:41:59 AM EDT
The states are busy amending their laws or passing new legislation to allow the collection of sales and use taxes in participating states. The fat lady is warming in the wings.

www.ncsl.org/programs/fiscal/ssutachart1.htm

www.ncsl.org/programs/fiscal/sstisupdate.htm
Link Posted: 9/23/2005 10:46:35 AM EDT
[Last Edit: 9/23/2005 10:54:11 AM EDT by krpind]
This is an ongoing deal here in East Texas, with customers coming in from Louisiana, and Arkansas.

If an out of state customer walks into my store they pay sales tax. If I ship it to them I don't charge tax.....really they are required to pay it themselves. (like that happens)

If it is an internet order from out of state it is not subject to sales tax, per federal law.

If I deliver it to my customer out of state I am required to get a sales tax certificate from that state and charge, collect and pay that tax.

Is that confusing enough for y'all???

Edit for clarity
Link Posted: 9/23/2005 11:46:02 AM EDT

Originally Posted By krpind:
If it is an internet order from out of state it is not subject to sales tax, per federal law.



Under current federal law a state can't be compelled to collect interstate sales taxes. The states are forming an interstate compact to voluntarily collect sales taxes which is legal.

www.washingtonpost.com/wp-dyn/content/article/2005/07/01/AR2005070101475.html

States Move Forward on Internet Sales Tax

By Brian Krebs
washingtonpost.com Staff Writer
Friday, July 1, 2005; 4:02 PM

Tax officials, state lawmakers and industry representatives agreed Thursday to establish an 18-state network for collecting taxes on Internet sales, a compact they hope will encourage online retailers and Congress to endorse a mandatory national program.

Meeting in Chicago under the auspices of the Streamlined Sales Tax Project, the officials agreed that 11 states will oversee the project and outlined incentives to encourage retailers to participate. Forty states have been negotiating since 2000 to create a framework for collecting sales taxes on all remote transactions, whether through regular mail or online.

"The vote is a culmination of over five years of hard work by states, local governments and businesses interested in seeing the complexity in sales tax [reduced]," said Stephen Kranz, tax counsel for the Council on State Taxation, an industry trade association.

Starting Oct. 1, software vendors contracted by the Streamlined Sales Tax Project will begin providing free tax collection and remittance software and services to online merchants who voluntarily agree to collect taxes on all online sales on behalf of the 18 participating states.

Under the states' plan, Internet retailers that agree to collect and remit taxes will do so for online sales originating in any of 11 states that have amended their state laws to fully comply with standards developed by the sales tax project. In the other seven states, the Internet sales tax collection would be optional until their tax codes are brought into full compliance. In both cases, any taxes the retailer collected would be based on the rates in effect where the buyer lives, and the retailers would be compensated for the cost of collecting and remitting that revenue to the states.

As an incentive, the states will offer a one-year amnesty for e-commerce companies that may owe taxes on past online sales to any of the participating states. The amnesty offer could prove attractive for several major retailers that are currently involved in legal disputes over whether they owe taxes on Internet sales.

In a decision handed down May 31, a California state appeals court ordered Borders.com, the online division of the bookseller Borders Group, to pay $167,000 in back taxes to the state because the company allowed customers who bought books online to return them at the company's brick-and-mortar stores.

In an ongoing case that began in 2003, Illinois sued Barnes and Noble, Blockbuster, Gateway and several other retailers, alleging that they failed to pay millions of dollars in taxes on sales made to state residents. In December 2004, several retailers -- Wal-Mart Stores Inc., and its affiliate, Wal-Mart.com, Inc.; Target Corporation and its affiliate, Target.Direct, LLC; and Office Depot Inc. -- settled those lawsuits, paying Illinois a total of $2.4 million. The state's case against Gateway and other major retailers is pending.

The states supporting the online sales tax effort believe a successful run of their voluntary program may encourage Congress to pass legislation to overturn a 1992 Supreme Court ruling. In that decision, the justices said mail-order merchants, and, by extension, online retailers, did not need to collect taxes for sales into states where they did not have a physical presence, such as a store or shipping center. The high court reasoned that subjecting out of state merchants to such a myriad of disparate tax laws would place an undue burden on interstate commerce.

At stake for the states are potential billions of dollars a year in revenue that currently go uncollected. A study released in July 2004 by the National Governors Association and the National Conference of State Legislatures estimated that state and local governments lost $15.5 billion to $16.1 billion in 2003 from untaxed Internet sales. Total online retail spending last year was $66.5 billion, according to comScore Networks, a Reston, Va.-based research firm.

In their vote Thursday, the Streamlined Sales Tax Project members agreed that the governing board of full members would consist of Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, North Carolina, Nebraska, Oklahoma, South Dakota and West Virginia. In a last-minute legislative session late Thursday evening, New Jersey also enacted legislation to bring the state into compliance with the project's guidelines; it will become a full member Oct. 1.

Associate member states are Arkansas, North Dakota, Ohio, Tennessee, Utah and Wyoming.

Rich Prem, director of global indirect taxation for Amazon.com, called Thursday's agreement "a great first step," but said the states' plan lacks a meaningful mechanism for compensating for large Internet retailers for the costs of collecting and remitting sales taxes. Prem also noted that the states have not agreed yet on how to treat digital downloads of books, music and movies.

Some states that have participated in the Streamlined Sales Tax Project have indicated they are not willing to undertake the politically difficult task of tax simplification until Congress signals its support. Maryland officials have said they will not take any further simplification steps until Congress approves the states' plan. The District of Columbia and Virginia governments support the plan but have not yet taken concrete steps to bring their tax laws in line with other members.

Streamlined Sales Tax Project officials say supporters in Congress will reintroduce the measure again this year, but it's unclear whether the House or Senate will make it a priority.

Bills were introduced in 2000 and 2003 but failed to make it to either the House or Senate floors for a vote.
Link Posted: 9/23/2005 12:02:36 PM EDT
[Last Edit: 9/23/2005 12:04:04 PM EDT by krpind]

Originally Posted By rkbar15:

Originally Posted By krpind:
If it is an internet order from out of state it is not subject to sales tax, per federal law.



Under current federal law a state can't be compelled to collect interstate sales taxes. The states are forming an interstate compact to voluntarily collect sales taxes which is legal.



That should say states can't compel retailers to collect out of state sales tax.


www.washingtonpost.com/wp-dyn/content/article/2005/07/01/AR2005070101475.html

States Move Forward on Internet Sales Tax

By Brian Krebs
washingtonpost.com Staff Writer
Friday, July 1, 2005; 4:02 PM

Tax officials, state lawmakers and industry representatives agreed Thursday to establish an 18-state network for collecting taxes on Internet sales, a compact they hope will encourage online retailers and Congress to endorse a mandatory national program.

Meeting in Chicago under the auspices of the Streamlined Sales Tax Project, the officials agreed that 11 states will oversee the project and outlined incentives to encourage retailers to participate. Forty states have been negotiating since 2000 to create a framework for collecting sales taxes on all remote transactions, whether through regular mail or online.

"The vote is a culmination of over five years of hard work by states, local governments and businesses interested in seeing the complexity in sales tax [reduced]," said Stephen Kranz, tax counsel for the Council on State Taxation, an industry trade association.

Starting Oct. 1, software vendors contracted by the Streamlined Sales Tax Project will begin providing free tax collection and remittance software and services to online merchants who voluntarily agree to collect taxes on all online sales on behalf of the 18 participating states.

Under the states' plan, Internet retailers that agree to collect and remit taxes will do so for online sales originating in any of 11 states that have amended their state laws to fully comply with standards developed by the sales tax project. In the other seven states, the Internet sales tax collection would be optional until their tax codes are brought into full compliance. In both cases, any taxes the retailer collected would be based on the rates in effect where the buyer lives, and the retailers would be compensated for the cost of collecting and remitting that revenue to the states.

As an incentive, the states will offer a one-year amnesty for e-commerce companies that may owe taxes on past online sales to any of the participating states. The amnesty offer could prove attractive for several major retailers that are currently involved in legal disputes over whether they owe taxes on Internet sales.

In a decision handed down May 31, a California state appeals court ordered Borders.com, the online division of the bookseller Borders Group, to pay $167,000 in back taxes to the state because the company allowed customers who bought books online to return them at the company's brick-and-mortar stores.

In an ongoing case that began in 2003, Illinois sued Barnes and Noble, Blockbuster, Gateway and several other retailers, alleging that they failed to pay millions of dollars in taxes on sales made to state residents. In December 2004, several retailers -- Wal-Mart Stores Inc., and its affiliate, Wal-Mart.com, Inc.; Target Corporation and its affiliate, Target.Direct, LLC; and Office Depot Inc. -- settled those lawsuits, paying Illinois a total of $2.4 million. The state's case against Gateway and other major retailers is pending.

The states supporting the online sales tax effort believe a successful run of their voluntary program may encourage Congress to pass legislation to overturn a 1992 Supreme Court ruling. In that decision, the justices said mail-order merchants, and, by extension, online retailers, did not need to collect taxes for sales into states where they did not have a physical presence, such as a store or shipping center. The high court reasoned that subjecting out of state merchants to such a myriad of disparate tax laws would place an undue burden on interstate commerce.

At stake for the states are potential billions of dollars a year in revenue that currently go uncollected. A study released in July 2004 by the National Governors Association and the National Conference of State Legislatures estimated that state and local governments lost $15.5 billion to $16.1 billion in 2003 from untaxed Internet sales. Total online retail spending last year was $66.5 billion, according to comScore Networks, a Reston, Va.-based research firm.

In their vote Thursday, the Streamlined Sales Tax Project members agreed that the governing board of full members would consist of Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, North Carolina, Nebraska, Oklahoma, South Dakota and West Virginia. In a last-minute legislative session late Thursday evening, New Jersey also enacted legislation to bring the state into compliance with the project's guidelines; it will become a full member Oct. 1.

Associate member states are Arkansas, North Dakota, Ohio, Tennessee, Utah and Wyoming.

Rich Prem, director of global indirect taxation for Amazon.com, called Thursday's agreement "a great first step," but said the states' plan lacks a meaningful mechanism for compensating for large Internet retailers for the costs of collecting and remitting sales taxes. Prem also noted that the states have not agreed yet on how to treat digital downloads of books, music and movies.

Some states that have participated in the Streamlined Sales Tax Project have indicated they are not willing to undertake the politically difficult task of tax simplification until Congress signals its support. Maryland officials have said they will not take any further simplification steps until Congress approves the states' plan. The District of Columbia and Virginia governments support the plan but have not yet taken concrete steps to bring their tax laws in line with other members.

Streamlined Sales Tax Project officials say supporters in Congress will reintroduce the measure again this year, but it's unclear whether the House or Senate will make it a priority.

Bills were introduced in 2000 and 2003 but failed to make it to either the House or Senate floors for a vote.



The states can form all of the alliances they want........the FEDERAL LAW will still have to change.
I don't believe that there is enough support in Congress for this to happen......IIRC the last time the ban on internet sales tax was voted on it had widespread support for both parties.
Link Posted: 9/23/2005 12:12:03 PM EDT
There is no sales tax on labor. Transfer fees are labor and are not taxable.
Link Posted: 9/23/2005 12:14:35 PM EDT
[Last Edit: 9/23/2005 1:01:09 PM EDT by krpind]

Originally Posted By akethan:
There is no sales tax on labor. Transfer fees are labor and are not taxable.



Sorry but that is incorrect.......labor to your home and your vehicle are not taxable, labor on everything else, including your AR is.

We charge tax on labor EVERY day.

ETA. I should add that is Texas......your state could very well be different.

Edit # 2 I would think that the transfer fee is a tax not labor so I would ASSUME it would not be taxable.........you know that pesky tax on a tax thing.

Edit again....so the fee is the fee payed to the FFL not a tax....
Link Posted: 9/23/2005 12:44:18 PM EDT

Originally Posted By krpind:
That should say states can't compel retailers to collect out of state sales tax.



I don't think that issue has been decided as yet. In any case retailers in the effected states are gearing up and will be collecting sales tax on Internet sales on a voluntary basis for the time being. If the program is successful how long to you think it will be before the required mandatory legislation is enacted.

"Starting Oct. 1, software vendors contracted by the Streamlined Sales Tax Project will begin providing free tax collection and remittance software and services to online merchants who voluntarily agree to collect taxes on all online sales on behalf of the 18 participating states.

Under the states' plan, Internet retailers that agree to collect and remit taxes will do so for online sales originating in any of 11 states that have amended their state laws to fully comply with standards developed by the sales tax project. In the other seven states, the Internet sales tax collection would be optional until their tax codes are brought into full compliance. In both cases, any taxes the retailer collected would be based on the rates in effect where the buyer lives, and the retailers would be compensated for the cost of collecting and remitting that revenue to the states."
Link Posted: 9/23/2005 12:48:51 PM EDT
[Last Edit: 9/23/2005 12:50:34 PM EDT by SteyrAUG]

Originally Posted By akethan:
There is no sales tax on labor. Transfer fees are labor and are not taxable.



I have specifically addressed this with the Dept. of Revenue.

Transfers are a "service" and therefore taxable.

I collect it and pay it but I don't itemize it. It is part of the $25.00 fee.

Part goes to FDLE for the background check, part goes to Dept. of Revenue and I end up with about enough for a Happy Meal.
Link Posted: 9/23/2005 12:54:20 PM EDT

Originally Posted By rkbar15:

Originally Posted By krpind:
That should say states can't compel retailers to collect out of state sales tax.



I don't think that issue has been decided as yet. In any case retailers in the effected states are gearing up and will be collecting sales tax on Internet sales on a voluntary basis for the time being. If the program is successful how long to you think it will be before the required mandatory legislation is enacted.

"Starting Oct. 1, software vendors contracted by the Streamlined Sales Tax Project will begin providing free tax collection and remittance software and services to online merchants who voluntarily agree to collect taxes on all online sales on behalf of the 18 participating states.

Under the states' plan, Internet retailers that agree to collect and remit taxes will do so for online sales originating in any of 11 states that have amended their state laws to fully comply with standards developed by the sales tax project. In the other seven states, the Internet sales tax collection would be optional until their tax codes are brought into full compliance. In both cases, any taxes the retailer collected would be based on the rates in effect where the buyer lives, and the retailers would be compensated for the cost of collecting and remitting that revenue to the states."



That WAS decided in 1992 by the Supreme Court......did you read your own post?

Everything in your post is voluntary no retailer has to collect a damned dime, and I would think a lawsuit brought on behalf of the people who are charged this "volultary tax" would eliminate it very quickly.
Link Posted: 9/23/2005 1:05:09 PM EDT
Okay.

All a resale certificate does is allow you, as a business, to both purchase items, tax free, for resale to others, and list you with the state as a vendor, indicating that you intend to engage in resale. By listing yourself with the state, you agree that you will collect sales tax on the behalf of the buyer.

Sales tax is still an honor system.

If you purchase anything from out of state, and take delivery in the State of Florida, you are legally obligated to pay the sales tax due on that item. No one, however, checks back on this.

If you purchase an item from your buddy down the street, you are legally obligated to pay sales tax on that item. No one, however, checks back on this.

If a vendor from out of state sells you an item in the State of Florida, you are required to pay sales tax on that item. They, being based elsewhere, however, are under no obligation to collect it. (Hence Steyr's warning that they are RIPPING YOU OFF. It is your personal obligation to pay the state the tax owed, not theirs.)

It's the same in many other states. Sales tax is not the responsibility of the seller. It is the responsibility of the buyer; however, when one registers to engage in a resale capacity, they then agree to collect on the behalf of the buyer, obligating them to pay the necessary tax.
Link Posted: 9/23/2005 1:07:35 PM EDT

Originally Posted By krpind:
That WAS decided in 1992 by the Supreme Court......did you read your own post?

Everything in your post is voluntary no retailer has to collect a damned dime, and I would think a lawsuit brought on behalf of the people who are charged this "volultary tax" would eliminate it very quickly.



I am aware of that. I don't have the full case in front of me but it is my understanding that some of the issues the court addressed have been rectified in the standardized legislation that is being passed by the participating states. Do you really believe that the states have not addressed all the legal issues involved? They have been working on it for years. It remains to be seen what the eventual outcome will be.
Link Posted: 9/23/2005 1:08:50 PM EDT
Iwill add that I liken this voluntary collection of sales tax to exactly what this thread is about.......retailers trying to add 6 to 8 % more profit on out of state sales.

How many of those retailers that collect that tax will actually report and pay it. The real question would be why......no state has the power to punish them if they charge it and just pocket it.
Link Posted: 9/23/2005 1:10:14 PM EDT
[Last Edit: 9/23/2005 1:11:53 PM EDT by SteyrAUG]

Originally Posted By mattimeo:


If you purchase anything from out of state, and take delivery in the State of Florida, you are legally obligated to pay the sales tax due on that item. No one, however, checks back on this.



Correct...but if THEY purchase from out of state and YOU take delivery then that is another story.

Also in addition to the "Resale Certificate" you have a "Certificate of Registration" remember?

One allows you to purchase items tax free as you said. It is the OTHER one that authorizes you to collect sales tax.
Link Posted: 9/23/2005 1:22:46 PM EDT

Originally Posted By SteyrAUG:

Originally Posted By mattimeo:


If you purchase anything from out of state, and take delivery in the State of Florida, you are legally obligated to pay the sales tax due on that item. No one, however, checks back on this.



Correct...but if THEY purchase from out of state and YOU take delivery than that is another story.

Also in addition to the "Resale Certificate" you have a "Certificate of Registration" remember?

One allows you to purchase items tax free as you said. It is the OTHER one that authorizes you to collect sales tax.



Yes I know.

Just simplifying it in my head and for folks who don't understand that some retailers (like Columbia House, for example) are merely preventing them from committing tax evasion. If they are actually registered and paying the tax, that is.

Also, we could get into semantics over taking 'delivery.' I may transfer in a firearm for someone, but in reality, I am merely acting as their agent, and they are the ones who take possession of the firearm on form 4473. I am not the end user of the product. Therefore the tax obligation still falls on them. Other than me including the sales tax for the transfer service.

So yeah. I look at this type of collection as profiteering.
Link Posted: 9/23/2005 1:26:07 PM EDT
Thanks SA.

I wondered why the Apple store charged my sales tax on an internet purchase.
Link Posted: 9/23/2005 1:36:10 PM EDT
Things seem to be different in MI. Here is a quote from this page:


Originally Posted By anotherlefty:
Unfortunately the State of Michigan Dept of Revenue sees things slightly different than what you people are describing.
The State has decided that since there is no way a private individual could legally buy a gun thru the mail from out of state, that the actual "purchase" is happening at the point where you fill out the Federal form 4473. That occurs within the State of Michigan, so they want their 6%.
The dealers who are not collecting the 6% and turning it over to the State of Michigan will be in for a big surprise when they are audited by the Michigan Dept of Revenue and have to pay 6% based on Blue Book value for all of the transfers that they did for a whopping $20-$25.
I personally know of two dealers who have been thru this and it put one of out of business and the other nearly so.
If you doubt my word, please phone the Michigan Dept of Revenue and ask them yourself.



As I mention in that thread, 'anotherlefty' is a reputable MI FFL dealer. I've not yet verified his claims independantly, but according to him it seems MI has conveniently reinterpreted the definition of "purchase" in order to get their goddamn 6%.
Link Posted: 9/23/2005 1:44:33 PM EDT

Originally Posted By heavily_armed:
Things seem to be different in MI. Here is a quote from this page:


Originally Posted By anotherlefty:
Unfortunately the State of Michigan Dept of Revenue sees things slightly different than what you people are describing.
The State has decided that since there is no way a private individual could legally buy a gun thru the mail from out of state, that the actual "purchase" is happening at the point where you fill out the Federal form 4473. That occurs within the State of Michigan, so they want their 6%.
The dealers who are not collecting the 6% and turning it over to the State of Michigan will be in for a big surprise when they are audited by the Michigan Dept of Revenue and have to pay 6% based on Blue Book value for all of the transfers that they did for a whopping $20-$25.
I personally know of two dealers who have been thru this and it put one of out of business and the other nearly so.
If you doubt my word, please phone the Michigan Dept of Revenue and ask them yourself.



As I mention in that thread, 'anotherlefty' is a reputable MI FFL dealer. I've not yet verified his claims independantly, but according to him it seems MI has conveniently reinterpreted the definition of "purchase" in order to get their goddamn 6%.



It would appear that you folks have a specific state law that entitles your state to collect tax on sales that did not occur in your state.
Link Posted: 9/23/2005 2:21:06 PM EDT
Being a small business owner myself... and filling out forms monthly for sales tax, I don't know how it would work for me to collect tax on a sale I didn't make, and pay that tax to a state I don't have a presence, am not registered as a business in that state, with a tax number, etc.

I think the dealers that are doing this are making some extra money from you.
Link Posted: 9/23/2005 2:31:42 PM EDT
SteyrAUG,
You are correct with this issue.
We had a debate going in the TX Hometown forums awhile back over this exact same issue.
A Dealer (not from this site) was pulling this scam and a some dealer(on this site) was trying to defend this type of action

Link Posted: 9/23/2005 2:42:57 PM EDT
In Maine, the buyer is obliged to report the total cost of untaxed interstate purchases and report and pay sales tax on the yearly income tax form. I don't think they have any way to verify the report because I don't keep close track and only report an approximation of what I remember in February of the following year.
Link Posted: 9/23/2005 4:57:32 PM EDT

Originally Posted By SteyrAUG:

Originally Posted By BobP:
There is a little complication to this. Some states require you to pay sales tax on mail order purchases. The rational is that you are trying to avoid paying tax by using out-of state mai order companies. It's on the honor system, except when you go through an FFL they have a sure way to collect it. I ran into this about 10 years ago when I lived in California. When the FFL wanted me to pay him sales tax, I called the state and they explained it to me this way. The FFL didn't collect tax on used out of state guns.



If a person or business is NOT certified to collect tax in YOUR STATE they may not lawfully do so.



Correct. However, you must declare it and pay it to your state. I know this is true in Idaho, California, and Indiana and I am fairly certain it is true in all other states that collect sales tax.
Link Posted: 9/23/2005 8:43:07 PM EDT

Originally Posted By SteyrAUG:

Originally Posted By BobP:
There is a little complication to this. Some states require you to pay sales tax on mail order purchases. The rational is that you are trying to avoid paying tax by using out-of state mai order companies. It's on the honor system, except when you go through an FFL they have a sure way to collect it. I ran into this about 10 years ago when I lived in California. When the FFL wanted me to pay him sales tax, I called the state and they explained it to me this way. The FFL didn't collect tax on used out of state guns.



If a person or business is NOT certified to collect tax in YOUR STATE they may not lawfully do so.



Absolutely correct. The seller didn't collect the tax, the local FFL receiving the new gun was required to collect the tax. I paid the out-of-state seller directly, they placed a detailed invoice in the package, and the local FFL used that to charge me tax. I wish I'd have known about the tax, I'd have tried to get the seller to not include the info in the package.
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