Posted: 1/22/2003 11:03:48 AM EDT
| Here is the situation. I buy a gun over the internet through an online auction or from an individual that posts a gun for sale on AR15.com. I send a copy of my local FFL dealer's license that I'm going to use for the transfer along with my payment for the gun to the individual. The individual and his gun is located in another state and the gun is shipped to my FFL dealer in my state. My local FFL dealer is then charging me sales tax on this gun. Is this correct or am I being taken to the cleaners. |
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From : [url]http://www.mbiguns.com/fees.htm[/url] Why no sales tax? Currently if you purchase items across state lines, in most cases there is no sales tax applied to your purchase. If you are careful, you can easily find someone to sell you what you are looking for who is located outside of California. Since we are not selling any items to you, but instead only offer a transfer service, we do not collect any sales tax. We believe that to do so would be improper under State sales tax laws. Be careful - other uninformed dealers in Northern California are collecting sales tax on transfers. This is wrong. Don't get stuck paying taxes you don't owe! We have spent considerable time researching the sales tax laws with the State Franchise Tax Board. Collecting sales tax for transferring firearms is BOGUS! Using us to handle your transfer, you can legally avoid the sales tax and buy at wholesale at the same time. It is for this reason that a great many people are choosing to transfer their firearms through us. You can as well. Give it a try and see how much money you can save. |
| I believe in some states they [b]DO[/b] have the right to charge you any applicable sales taxes. They are a retail establishment transfering an item to you. Sales tax isnt applicable just once on something. Look at used cars. Anytime a retail business sells something, in most places they are required to include it in their taxable sales. Whether they do or not is up to them. |
| I am in Alabama and have contacted my CPA to have him make some calls for me. I have used this paricular FFL to do approximately 8 transfers from individuals in other states and have paid him sales tax each time. After checking around, no one else seems to be doing this. I want to be legal in everything that I do, I just don't want to pay anymore than I am supposed to. We have 8% sales tax and it adds up when buying many AR's. I will post what I find out from the State tax folks. |
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Quoted: I buy a gun over the internet...from an individual...I send a copy of my local FFL... along with my payment for the gun to the individual...My local FFL dealer is then charging me sales tax on this gun. The dealer is not selling you the gun so how can he charge a sales tax on a sale he is not conducting? For that matter, unless you tell him how would the dealer know the purchase price of the gun? |
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There is no sales tax here so I may be off... Seems like he might be able to charge sales tax on the transfer fee since he is providing a service. IOW if you are paying him $10.00 for the transfer, he taxes the $10.00, not the price of the gun. My FFL doesn't even know what I paid for a gun unless I decide to tell him. He get's his $10.00 and I am out the door. |
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When I lived in CA all the dealers I spoke to charged sales tax and said the state says they have to. Now I live in AZ and have never paid a cent in sales tax on my out of state purchases. I love this state, that is except for the bitter cold at night. I stepped out a few minuets ago and it must be down to at least 50deg. THISISME |
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I think it depends on the law of your particular state as sales tax is generally governed by state law. In UT for example, the dealer doesn't/shouldn't charge you sales tax, but you are required to report interstate (including online) purchases you made and pay a "use" tax, which is the equivalent of the sales tax you would have paid had you purchased the item in-state. That means that any interstate personal purchases you make FROM A RETAILER/WHOLESALER, including ebay purchases, firearms purchases, and even purchases in Oregon (a no sales-tax state) must be reported by you on your tax return, and a tax is then assessed. It's an "on your honor" reporting. It basically comes down to honesty, but I don't think that many people here in UT even realize it's part of the state tax law. This is an excerpt from the Utah state tax website: Many Utahns believe — wrongly — that all of their purchases over the Internet are free from sales tax. If an online or catalog retailer does not collect sales tax at the time of the sale, tax is still due on that transaction. Only the name of the tax changes. It is called "use tax," and it is the same as the sales tax rate in your area. Use tax is reported on your Utah Individual Income Tax return. [url=http://incometax.utah.gov/topicsusetax.html]link[/url] Edited for Clarity. |
| I believe Soupersnake is correct and I believe the same applies in Alabama as far as interstate purchases from retailers and wholesalers. However, I did have my CPA make contact with Alabama's Department of Revenue, Sales Tax Division and they say that an interstate transactions between individuals as far as firearms are concerned is exempt from sales tax under Section 810-6-1-.33 of the Casual Sales Tax Law and that a FFL dealer should not be charging me any sales tax but only a transfer fee. I called three of the largest gun dealers within 100 miles of my area along with a few more small ones and they all stateds that they never have charged sales tax on interstate transfers they handle between individuals. I took this information to the dealer that has been charging me and confronted him about it. I left him with the phone number of the Sales Tax Division if he had any questions. He wasn't very happy when I left. I'll post again when & if I am reimbursed for the taxes he has been charging. To be continued ! |
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Quoted: I think it depends on the law of your particular state as sales tax is generally governed by state law. In UT for example, the dealer doesn't/shouldn't charge you sales tax, but you are required to report interstate (including online) purchases you made and pay a "use" tax, which is the equivalent of the sales tax you would have paid had you purchased the item in-state. This is an excerpt from the Utah state tax website: Many Utahns believe — wrongly — that all of their purchases over the Internet are free from sales tax. If an online or catalog retailer does not collect sales tax at the time of the sale, tax is still due on that transaction. Only the name of the tax changes. It is called "use tax," and it is the same as the sales tax rate in your area. Use tax is reported on your Utah Individual Income Tax return. What a bunch of horse shit!! If I lived there, I would not report one cent of ANY "use" tax. |
| The Key is to find out if he has not been reporting the sales tax he has been charging you. If he has been colecting tax a pocketing it he is in deep trouble. The Dept. Of Taxation or what ever it is called in your state frowns deeply on other entities going into the taxation business. |
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Quoted: Quoted: I think it depends on the law of your particular state as sales tax is generally governed by state law. In UT for example, the dealer doesn't/shouldn't charge you sales tax, but you are required to report interstate (including online) purchases you made and pay a "use" tax, which is the equivalent of the sales tax you would have paid had you purchased the item in-state. This is an excerpt from the Utah state tax website: Many Utahns believe — wrongly — that all of their purchases over the Internet are free from sales tax. If an online or catalog retailer does not collect sales tax at the time of the sale, tax is still due on that transaction. Only the name of the tax changes. It is called "use tax," and it is the same as the sales tax rate in your area. Use tax is reported on your Utah Individual Income Tax return. What a bunch of horse shit!! If I lived there, I would not report one cent of ANY "use" tax. He he he. . . . So, I guess this means that you were previously unaware that Virginia requires the same thing. A lot of people don't realize that use tax is required in their state. Now you know. [:D] From Virginia Department of Taxation Website: What is Consumer's Use Tax? Typically, you incur the Use Tax if you made more than $100 in purchases and the business did not add the applicable Virginia sales tax to your purchase. Common instances of these types of transactions are purchases from mail-order catalogues and cable television shopping channels. The Use Tax would also apply to tax-free purchases you made outside of Virginia. The tax is 4.5% of the cost of regular non-food purchases and 4% on purchases of food for home consumption. The Use Tax may be reported by filing Form CU-7 or by reporting it on Schedule ADJ, line 23. I purchased furniture from a store in North Carolina and the furniture will be delivered to me at my home in Virginia. Do I have to pay Virginia sales tax on the furniture? The sales tax applies to the use, consumption or storage of tangible personal property in Virginia; therefore, you will be liable for the sales tax. If the seller does not charge the tax, you must report and pay the tax on a consumer's use tax return. Is an out-of-state company required to collect Virginia sales tax on sales to out-of-state customers? An out-of-state seller must register with the department and collect the tax on sales to Virginia customer if the seller has sufficient "nexus," or contact with Virginia. If an out-of-state dealer does not have nexus with Virginia, the department cannot require that he or she register and collect the tax on behalf of the Commonwealth. [url=http://www.tax.state.va.us/site.cfm?alias=BusinessFAQ2#sales]Virginia Tax FAQ[/url] Remember, however, that the use tax is only chargeable on purchases you make from out-of-state merchants. As I understand it, you don't have to pay the use tax on purchases from individuals, i.e. you bought a gun from an [b]individual[/b] seller in another state. |
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I came across a decent explanation of the "use tax" on the West Virginia tax commission website. It states things in a way that is pretty understandable and applies to just about every state that has the use tax (most, if not all, states do have some form of the use tax). What is West Virginia’s Use Tax? Every state with a sales tax has a companion tax for purchases made outside the state. In West Virginia, that tax is called the “use tax,” but might be more aptly described as a remote sales tax. As a general rule, you owe this tax if you purchased merchandise and did not pay sales tax. Typically this happens when you purchase an item (for example, clothing, books, furniture, computers) by telephone, catalog, Internet, or in person from an out-of-state business that does not add the West Virginia sales tax to your bill. While many West Virginia residents are not aware of the use tax, it has been on the books since 1951. How do I normally pay the West Virginia’s Use Tax and when is the Tax Due? Form WV/CST-220A is the return used by individuals to remit use tax on otherwise untaxed purchases of taxable goods and taxable services purchased from remote vendors. The tax is due by no later than April 15th of the year following the year of the transaction. What types of Purchases is Use Tax paid on? Use tax is due on purchases of goods made from an out-of-state seller by telephone, through the mail, over the Internet, or while traveling outside West Virginia. Why do some Businesses collect the tax when other Businesses do not? West Virginia, like other states, can require a business to collect and remit use tax only if the business has a physical or other legal presence in the state. Examples of a presence in a state would be the presence of a store, warehouse, or employees or representatives of the business in the state. Without this physical or legal presence, the United States Supreme Court has ruled a state may not impose a collection responsibility on an out-of-state business. If Tax was paid to another State on items purchased there, is use tax still owed West Virginia? Credit is given for state tax paid in another state jurisdiction. It is not necessary to report purchases in another state if the tax of at least 6% was paid in another state. However, if tax was due and paid in another country, the full 6% West Virginia tax is still due. West Virginia law does not have a provision that allows credit for tax paid in another country or U.S. territory. [url=http://www.state.wv.us/taxrev/uploads/usetaxqa.pdf]West Virginia Use Tax[/url] I have to admit I was pretty surprised when I learned that states require payment of a "use" tax on out-of-state or online purchases from out-of-state merchants. Oh, and in response to the original question, none of this applies when you purchase from an individual. You pay NO sales or use tax on that purchase and your receiving FFL shouldn't be charging sales tax on the purchase price. As for charging sales tax on the transfer fee, I don't know? My FFL doesn't charge it. |