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Posted: 4/29/2011 2:19:50 PM EDT
I see that Palmeto State Armory has a notice on their web site that states: "Due to Federal law, if you order an AR15 lower and AR15 parts, we will have to add an additional 11% Federal Excise Tax to the purchase price of the AR15 lower and AR15 parts.

Is this just for AR15 parts and stripped lowers or is there a change I'm not up to speed on with regard to internet sales and transfers???

Thanks
Link Posted: 4/29/2011 2:35:43 PM EDT
[#1]


thats bullshit



edited to add: I'll never order another part from them, nothing nada
Link Posted: 4/29/2011 2:39:27 PM EDT
[#2]
hmmm.. Looks like ITAR..
Link Posted: 4/29/2011 2:42:06 PM EDT
[#3]
Now do they mean AR15 lowers, and AR15 Parts

or do they mean : if you order an AR15 lower and AR15 parts (meaning a lower and parts together in one order)???

Q? If only ordering an AR15 lower, will there still be 11% Excise Tax???
Link Posted: 4/29/2011 2:45:36 PM EDT
[#4]
Quoted:
hmmm.. Looks like ITAR..


ITAR has nothing to do with the federal excise tax on firearms.

This is about people avoiding the excise tax they would otherwise pay when buying a complete firearm, by instead buying a lower and the other requisite parts for the firearm.
Link Posted: 4/29/2011 2:48:43 PM EDT
[#5]




Quoted:

hmmm.. Looks like ITAR..




that has to do about shipping parts out of country, not a tax
Link Posted: 4/29/2011 2:50:28 PM EDT
[#6]
Looks like their lowers have an 11% tax



http://palmettostatearmory.com/2072.php
Link Posted: 4/29/2011 2:52:02 PM EDT
[#7]
Got a link so we can get some context?
Link Posted: 4/29/2011 2:52:28 PM EDT
[#8]
AIM does not show any extra tax for their lowers.
Link Posted: 4/29/2011 2:53:33 PM EDT
[#9]
Hmm, interesting.  As I understand the FET, it's 11% on assembled guns.  They're not doing any assembling when they ship an LPK + a lower and hence I don't believe they should be charging the 11% tax.



Been a while since I've read up on that.  Off to do some research.
Link Posted: 4/29/2011 2:53:50 PM EDT
[#10]
Palmetto text




Due
to Federal law, if you order an AR15 lower and AR15 parts, we will have
to add an additional 11% Federal Excise Tax to the purchase price of
the AR15 lower and AR15 parts. This amount will not be reflected in your
shopping cart or on your invoice, but will be added when your order is
processed.




California Buyers - stripped lowers are sent to
California as "Long Guns" by default.  Please specify if it is to be
built as a Pistol in the Special Instructions at checkout.


 

 

 
                               
                             
                           
                       
                     
                   


   http://palmettostatearmory.com/2072.php
Link Posted: 4/29/2011 2:56:53 PM EDT
[#11]

 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:

 
 (1) Pistols;

 
 (2) Revolvers;

 
 (3) Firearms (other than pistols and revolvers); and

 
 (4) Shells and cartridges.

 
 (b) Parts or accessories —(1) In general. No
tax is imposed by section 4181 of the Code on the sale of parts or
accessories of firearms, pistols, revolvers, shells, and cartridges when
sold separately or when sold with a complete firearm for use as spare
parts or accessories. The tax does attach, however, to sales of
completed firearms, pistols, revolvers, shells, and cartridges, and to
sale of such articles that, although in knockdown condition, are
complete as to all component parts.








Not a lawyer, but that sounds like Palmetto is right?



Link Posted: 4/29/2011 3:07:45 PM EDT
[#12]
Pittman-Robins act tax.

Since the mid 1930s.
Link Posted: 4/29/2011 3:23:06 PM EDT
[#13]
Quoted:
Not a lawyer, but that sounds like Palmetto is right?


Yep.

11% FET is due on all firearms and ammo not destined for LE/Mil.

If you buy a lower, tax is due on the price of the lower.

If you buy an assembled gun, tax is due on the price of the assembled gun.

If you buy a lower and an upper at the same time, tax is due on the price of the sum of the parts, as you pretty much just bought a dissembled (but complete) gun.

Solution: Order your upper & lower from different vendors.


ETA: FET is paid by the manufacturer before the product gets delivered to the distributor, IIRC.  The consumer never sees it as a line item unless it has to be attached as in the third scenario above.  Some FFLs will ignore the tax code and not collect, just as some will sell LE ammo (where the tax hasn't been paid) without collecting the tax.  The latter is a contributing reason why some ammo companies have very stringent rules on certain ammo *cough* Hornady TAP 5.56 *cough* not being sold to civilians.  The excise tax was never paid on it, and for them to track who got what and who owes what would be a nightmare.
Link Posted: 4/29/2011 3:40:48 PM EDT
[#14]
Palmetto is wrong. The FET is only applied to COMPLETED firearms. A lower, even with a LPK, is not a complete firearm. (Now I'll wait for the inevitable [and also wrong] "the Lower is the Firearm" refrain).
Link Posted: 4/29/2011 3:42:23 PM EDT
[#15]
Link Posted: 4/29/2011 5:16:58 PM EDT
[#16]
Quoted:

Quoted:
Quoted:
hmmm.. Looks like ITAR..


ITAR has nothing to do with the federal excise tax on firearms.

This is about people avoiding the excise tax they would otherwise pay when buying a complete firearm, by instead buying a lower and the other requisite parts for the firearm.
Which is 100% legal.  

 


Sorry, did I write otherwise?
Link Posted: 4/29/2011 5:24:15 PM EDT
[#17]
Quoted:
Palmetto is wrong. The FET is only applied to COMPLETED firearms. A lower, even with a LPK, is not a complete firearm. (Now I'll wait for the inevitable [and also wrong] "the Lower is the Firearm" refrain).


On an AR-15 the lower IS a firearm
Link Posted: 4/29/2011 5:30:25 PM EDT
[#18]
Link Posted: 4/29/2011 5:35:08 PM EDT
[#19]
You realize that this can be avoided by placing two separate orders.
Link Posted: 4/29/2011 6:53:12 PM EDT
[#20]



Quoted:


You realize that this can be avoided by placing two separate orders.


Makes us wonder why Palmetto posts this in an online store and/or lets this stir up like this?  



 
Link Posted: 4/29/2011 6:55:50 PM EDT
[#21]
why the blue fucka re firearms being taxes 11 percent in the first place and how is it possible I dd not know this?  Isn't this like a poll tax?
Link Posted: 4/29/2011 7:04:38 PM EDT
[#22]
Quoted:
why the blue fucka re firearms being taxes 11 percent in the first place and how is it possible I dd not know this?  Isn't this like a poll tax?


It's 11% for longguns and ammo. 10% for handguns.
Link Posted: 4/29/2011 7:07:11 PM EDT
[#23]
Cheaper to pay the 11% than to pay shipping for two consecutive days orders?
Link Posted: 4/29/2011 7:15:38 PM EDT
[#24]
Quoted:
 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:

 
 (1) Pistols;

 
 (2) Revolvers;

 
 (3) Firearms (other than pistols and revolvers); and

 
 (4) Shells and cartridges.

 
 (b) Parts or accessories —(1) In general. No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.




Not a lawyer, but that sounds like Palmetto is right?




ALL component parts is the key wording. Leave some pins out and it is not complete.
Link Posted: 4/29/2011 7:16:59 PM EDT
[#25]
Quoted:
why the blue fucka re firearms being taxes 11 percent in the first place and how is it possible I dd not know this?  Isn't this like a poll tax?


Pretty sure this came about as part of the NFA.

Quoted:

Quoted:
You realize that this can be avoided by placing two separate orders.

Makes us wonder why Palmetto posts this in an online store and/or lets this stir up like this?  
 


Maybe they got some scrutiny from someone and are CYA.
Link Posted: 4/29/2011 7:18:21 PM EDT
[#26]





Quoted:





Quoted:




 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:





 

 (1) Pistols;





 

 (2) Revolvers;





 

 (3) Firearms (other than pistols and revolvers); and





 

 (4) Shells and cartridges.





 

 (b) Parts or accessories —(1) In general. No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.


















Not a lawyer, but that sounds like Palmetto is right?














ALL component parts is the key wording. Leave some pins out and it is not complete.



Yes but if you buy a lower and an LPK...all complete parts, yeah?



ETA: BUT that's not Palmetto's wording.  I see your point and agree





 
Link Posted: 4/29/2011 7:24:11 PM EDT
[#27]
LPK and lower isn't a complete gun. That is the loophole being used. Even an upper included wouldn't be complete, without a bolt and carrier. Palmetto can be paranoid for screwing up before, so who knows. Either way, they are illegally collecting a tax for something that is not taxable. The better question is are they reporting the items as being taxed and turning that money over?
Link Posted: 4/29/2011 7:31:58 PM EDT
[#28]
A stripped lower and packaged LPK are NOT a manufactured firearm!
PSA is dead wrong.

A lower with the FCG INSTALLED is a manufacutred firearm in this case.
Link Posted: 4/29/2011 7:41:29 PM EDT
[#29]
Quoted:
Pretty sure this came about as part of the NFA.

Nope.  The excise tax is otherwise known as the Pittman-Robertson tax and has nothing to do with the National Firearms Act.

Quoted:
Maybe they got some scrutiny from someone and are CYA.

That would be the ATF Tax & Trade Bureau (ATF TTB).
Link Posted: 4/29/2011 7:46:09 PM EDT
[#30]
Quoted:
A stripped lower and packaged LPK are NOT a manufactured firearm!
PSA is dead wrong.

A lower with the FCG INSTALLED is a manufacutred firearm in this case.


When I read..."and to sale of such articles that, although in knockdown condition, are complete as to all component parts."  ... that tells me that if I buy two stipped lowers ONLY, then PSA should NOT charge me an additional FET.

There are no component parts that can be "un-knocked" or assembled to make it complete.


Link Posted: 4/29/2011 7:48:33 PM EDT
[#31]
Quoted:
Quoted:
Pretty sure this came about as part of the NFA.

Nope.  The excise tax is otherwise known as the Pittman-Robertson tax and has nothing to do with the National Firearms Act.

Quoted:
Maybe they got some scrutiny from someone and are CYA.

That would be the ATF Tax & Trade Bureau (ATF TTB).


Interesting, had to look that one up.  Apparently all the funds collected are given to the Fish and Wildlife Service.  Is that still the case?
Link Posted: 4/29/2011 7:48:55 PM EDT
[#32]



Quoted:



Quoted:

why the blue fucka re firearms being taxes 11 percent in the first place and how is it possible I dd not know this?  Isn't this like a poll tax?




Pretty sure this came about as part of the NFA.




Quoted:




Quoted:

You realize that this can be avoided by placing two separate orders.


Makes us wonder why Palmetto posts this in an online store and/or lets this stir up like this?  

 




Maybe they got some scrutiny from someone and are CYA.


It would be "Industry WIDE" if that were the case.



 
Link Posted: 4/29/2011 7:51:45 PM EDT
[#33]
I bought a crap load of 100% AK receivers from NoDak and was never charged an 11% FET.

I'm guessing that PSA is charging it IF you buy both a LPK and receiver in the same shipment...cause that could be assembled to constitute a complete "firearm". Maybe they will be at the NRA show tomorrow and I'll ask them.
Link Posted: 4/29/2011 7:52:56 PM EDT
[#34]
Quoted:
Interesting, had to look that one up.  Apparently all the funds collected are given to the Fish and Wildlife Service.  Is that still the case?

AFAIK it is.  The tax is on more than just guns and ammo - it also covers archery equipment, and maybe some other hunting or outdoors equipment.  The money is supposed to be used for F&WS, range development, etc.
Link Posted: 4/29/2011 7:53:35 PM EDT
[#35]



Quoted:


LPK and lower isn't a complete gun. That is the loophole being used. Even an upper included wouldn't be complete, without a bolt and carrier. Palmetto can be paranoid for screwing up before, so who knows. Either way, they are illegally collecting a tax for something that is not taxable. The better question is are they reporting the items as being taxed and turning that money over?


I'd argue that yes, indeed it is a "complete gun" by the ATF's definition I posted above.



Lower is the firearm in the case of the AR family.  A complete firearm, I'd argue, is a completed lower receiver.  Upper is tertiary at this point - logically anyways.



 
Link Posted: 4/29/2011 7:57:59 PM EDT
[#36]
Quoted:
I bought a crap load of 100% AK receivers from NoDak and was never charged an 11% FET.

I'm guessing that PSA is charging it IF you buy both a LPK and receiver in the same shipment...cause that could be assembled to constitute a complete "firearm". Maybe they will be at the NRA show tomorrow and I'll ask them.


You are not paying the FET directly. NoDak paid the FET and then worked the cost into what you paid.

The FET is paid my a manufacturer of firearms, you as an individual are not a manufacturer of firearms.
Link Posted: 4/29/2011 8:03:11 PM EDT
[#37]



Quoted:



 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:



 
 (1) Pistols;



 
 (2) Revolvers;



 
 (3) Firearms (other than pistols and revolvers); and



 
 (4) Shells and cartridges.



 
 (b) Parts or accessories —(1) In general. No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.











Not a lawyer, but that sounds like Palmetto is right?





No

FET only attaches to a completed firearm.

They (excise tax folks) have said ths a few times, when asked for anything to back it up they always back down.

RRA and Colt and a whole bunch more MFG sell completed lowers with stocks and all and they do not have to pay excise tax on them.

I am an 07 MFG and I have checked this 8 way from sunday so I don't get any surprises.

 





 
Link Posted: 4/29/2011 8:04:13 PM EDT
[#38]



Quoted:


Palmetto is wrong. The FET is only applied to COMPLETED firearms. A lower, even with a LPK, is not a complete firearm. (Now I'll wait for the inevitable [and also wrong] "the Lower is the Firearm" refrain).


CORRECT



 
Link Posted: 4/29/2011 8:05:30 PM EDT
[#39]
I'd bet they got a letter from a lawyer or the ATF. I'm not really surprised this hasn't happened sooner.
Link Posted: 4/29/2011 8:06:19 PM EDT
[#40]



Quoted:





Quoted:


 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:



 
 (1) Pistols;



 
 (2) Revolvers;



 
 (3) Firearms (other than pistols and revolvers); and



 
 (4) Shells and cartridges.



 
 (b) Parts or accessories —(1) In general. No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.











Not a lawyer, but that sounds like Palmetto is right?





No

FET only attaches to a completed firearm.

They (excise tax folks) have said ths a few times, when asked for anything to back it up they always back down.

RRA and Colt and a whole bunch more MFG sell completed lowers with stocks and all and they do not have to pay excise tax on them.

I am an 07 MFG and I have checked this 8 way from sunday so I don't get any surprises.

 



 
That statute sure doesn't sound like what you're saying.





 
Link Posted: 4/29/2011 8:06:56 PM EDT
[#41]
Quoted:

Quoted:
 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:

 
 (1) Pistols;

 
 (2) Revolvers;

 
 (3) Firearms (other than pistols and revolvers); and

 
 (4) Shells and cartridges.

 
 (b) Parts or accessories —(1) In general. No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.




Not a lawyer, but that sounds like Palmetto is right?


No
FET only attaches to a completed firearm.
They (excise tax folks) have said ths a few times, when asked for anything to back it up they always back down.
RRA and Colt and a whole bunch more MFG sell completed lowers with stocks and all and they do not have to pay excise tax on them.
I am an 07 MFG and I have checked this 8 way from sunday so I don't get any surprises.
 

 


So your saying that PSA should not be collecting FET on Lowers, LPK's and/or any combination thereof?



.
Link Posted: 4/29/2011 8:06:57 PM EDT
[#42]



Quoted:


why the blue fucka re firearms being taxes 11 percent in the first place and how is it possible I dd not know this?  Isn't this like a poll tax?
You think you're mad now?

I dug up the excise tax list, the govt excise taxes everything that is made just about, tooth brush?

Yes

Fishing reel?

Yep

The list is a mile long



 
Link Posted: 4/29/2011 8:08:08 PM EDT
[#43]



Quoted:



Quoted:

why the blue fucka re firearms being taxes 11 percent in the first place and how is it possible I dd not know this?  Isn't this like a poll tax?




Pretty sure this came about as part of the NFA.




Quoted:




Quoted:

You realize that this can be avoided by placing two separate orders.


Makes us wonder why Palmetto posts this in an online store and/or lets this stir up like this?  

 




Maybe they got some scrutiny from someone and are CYA.
I pay no excise tax on the NFA weapons I MFG

As long as he $5 or $200 NFA tax is paid





 
Link Posted: 4/29/2011 8:10:22 PM EDT
[#44]
Quoted:

Quoted:
LPK and lower isn't a complete gun. That is the loophole being used. Even an upper included wouldn't be complete, without a bolt and carrier. Palmetto can be paranoid for screwing up before, so who knows. Either way, they are illegally collecting a tax for something that is not taxable. The better question is are they reporting the items as being taxed and turning that money over?

I'd argue that yes, indeed it is a "complete gun" by the ATF's definition I posted above.

Lower is the firearm in the case of the AR family.  A complete firearm, I'd argue, is a completed lower receiver.  Upper is tertiary at this point - logically anyways.
 


We can't mix up serialized parts and an actual complete firearm. That may be what is being done, but that should not be.
Link Posted: 4/29/2011 8:12:10 PM EDT
[#45]
It wouldn't chap me so bad paying that $200.00 tax stamp every time if I knew the Feds were using the money to provide criminal control instead of gun control.
Link Posted: 4/29/2011 8:12:31 PM EDT
[#46]
Quoted:
I pay no excise tax on the NFA weapons I MFG
As long as he $5 or $200 NFA tax is paid

 


Gotcha, makes sense NFA stuff would be exempt since it's already taxed once.
Link Posted: 4/29/2011 8:12:56 PM EDT
[#47]



Quoted:



Quoted:




Quoted:


 (a) Imposition of tax. Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:



 
 (1) Pistols;



 
 (2) Revolvers;



 
 (3) Firearms (other than pistols and revolvers); and



 
 (4) Shells and cartridges.



 
 (b) Parts or accessories —(1) In general. No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.











Not a lawyer, but that sounds like Palmetto is right?





No

FET only attaches to a completed firearm.

They (excise tax folks) have said ths a few times, when asked for anything to back it up they always back down.

RRA and Colt and a whole bunch more MFG sell completed lowers with stocks and all and they do not have to pay excise tax on them.

I am an 07 MFG and I have checked this 8 way from sunday so I don't get any surprises.

 



 




So your saying that PSA should not be collecting FET on Lowers, LPK's and/or any combination thereof?
.
Thats right, FET only applies to a 100 % completed rifle or pistol.

PERIOD!

What if I order a complete lower for my 16" upper I already have and then in the same order I add a complete 24 varmint upper for my lower I already have?







 
Link Posted: 4/29/2011 8:16:44 PM EDT
[#48]
Quoted:

It would be "Industry WIDE" if that were the case.
 


What about a year or two ago when YHM was catching grief from BATF over multiple detachable mounts for their cans?  That wasn't industry wide.  Anyways, my point is, i can't imagine PSA would try to pull some under handed BS, and there's surely a logical reason for it.
Link Posted: 4/29/2011 8:23:40 PM EDT
[#49]



Quoted:



Quoted:



It would be "Industry WIDE" if that were the case.

 




What about a year or two ago when YHM was catching grief from BATF over multiple detachable mounts for their cans?  That wasn't industry wide.  Anyways, my point is, i can't imagine PSA would try to pull some under handed BS, and there's surely a logical reason for it.


I deal with them all the time, they are straight shooters there for sure.

I will call them tomorrow and see if I can get them to fix this.





 
Link Posted: 4/29/2011 8:23:48 PM EDT
[#50]
Quoted:
Quoted:

It would be "Industry WIDE" if that were the case.
 


What about a year or two ago when YHM was catching grief from BATF over multiple detachable mounts for their cans?  That wasn't industry wide.  Anyways, my point is, i can't imagine PSA would try to pull some under handed BS, and there's surely a logical reason for it.


Well... as witnessed by this thread, there seems to be a wide variety of interpretation.

...and to sale of such articles that, although in knockdown condition, are complete as to all component parts. A stripped lower is not complete and has no component parts. How could this staute possibly be twisted to make one think an FET was due??


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