Home Forums Hunting & Shooting Ask The Gunwriters FFL transfer costs

I just bought a savage 99 from Florida. I paid the private party directly, My FFL in CA charged me sales tax on top of his agent fee and the DRO fee. IS that correct? I questioned it and he said it was required. Was I taken?

May be requied in your state, but I've never paid tax on any rifle from out of state, and I've bought a lot of em.

No tax for me either, for several dealers I've used.

He did say California, all laws are different there.

In Texas, the FFL holder will charge sales tax on the transfer fee, not on the gun (e.g., on a gun with a $20 transfer fee, the tax would be less than $2).

I don't know of any state that charges sales taxes on "used" consumer products, however, if the gun is new, then there might be state laws requiring the transfer agent to collect sales tax at the point of transfer. In that case, you would want to make sure that the gun you are buying is a "used" gun regardless of whether the gun in question had ever been fired (might have just had the bolt put in the rifle and the action worked once so it was pre-owned/"used"). One thing I'll add, though, is that I think the exemption for "used" products is related to sales tax already being collected for that product.

Here's a link to a State of California website that probably contains the answer to your question from an official source:
CA sales tax regs

ram1z,

The California Department of Justice has commanded firearms dealers in California to collect sales tax of firearms being shipped into the state for transfer, so your dealer told you how it is.

jim

HunterJim,

Is that for all firearms, or just "new" ones?

RR,

Covers all sales, new and used.

jim

So KA DOJ gets to make tax laws?

Guess if you live in Kaliforniastan and get a transfer, you need to remember to disclose to the receiving FFL that you paid $25 for that Sako.

Sitka,

Yes, probably under the guise of a general "use tax" statute. For example in South Dakota:

"An excise tax is hereby imposed on the privilege of the use, storage, and consumption in this state of tangible personal property purchased for use in this state at the same rate of percent of the purchase price of said property as is imposed pursuant to chapter 10-45." (sales tax rate)

Here sales tax extends generally to services too.

This all drives the tax people nuts on sales via Internet. SD has no authority to require sellers in other states to collect sales tax (yet) so they have to rely on the buyers voluntarily sending their due to Pierre. Yeah, right!!

I could be wrong, but I think KA would apply the same rule to any item (not just firearms) purchased from out of state - that sales tax is due. Also, I think most states apply that same principle, though maybe that doesn't apply, due to federal legislation, to internet sales (?).

Of course, the "system" relies on buyers to go to the state and offer to pay up sales tax due, which nobody in real life does. With a firearm transfer, the state actually has a way of tracking the sale and enforcing payment.

I could be wrong, this is just off the top of my head.

The AG interprets the laws the legislature passes and the governor signs, just like other places. In this case someone figured out that the tax laws on sales and for equivalent use taxes could easily be collected by having the FFL involved do the collection. Same o, same o for car dealers.

To date no one has sued to point out that use taxes are properly declared by the taxpayer and paid with the income tax filing.

jim

People bitch and moan about the fees that FFLs charge to transfer, but I flat out refuse to even do them as they are such a PITA. Aside from the hassle, if you are going to get popped by the ATF for paperwork errors, it is probably going to be on transfers.

If I did decide to do transfers, I'd charge about $500 plus the transfer fees just to ensure that I didn't have any takers.

As for the taxes, this is just the tip of the iceberg. California is leading the way in figuring out how to collect sales or use taxes on everything purchased out of state. there is already legislation requiring citizens to report and pay taxes on all internet and catalog purchases, but there is no enforcement mechanism yet.

They are getting tough on tobacco taxes as well. An acquaintance used to buy his cigarettes from an Indian Reservation, but recently got a bill for something like $1500 in back taxes for all of the purchases he had made over the previous couple of years.

CAS,

I have read many of your posts in the past and mostly respected your input on various subjects. Unfortunately, you have crossed the line with me and ruined that goodwill. Your attitude about not doing FFL transfers makes my blood boil. If I put in words how I really feel about this, I would get thrown off this board.

California law MANDATES that FFL licencees process private party transfers within the state. Many California FFL dealers have come up with creative games for denying, delaying, or otherwise manipulating well intentioned people who want to comply with this states crappy restrictive laws. It is a shame that FFL Dealers are tacitly supporting the liberal agenda in this state.

California law does not mandate that you process out-of-state transfers. You are free to deny them or charge the outrageous fees you stated above. www.calguns.net members regularly discuss who the "good" FFL's are versus the wimps who support undermining our limited rights in this state. You have shown me which category you are in. You and I will never do business together, and that obviously suits is both. I will not shed a tear when your shop closes for lack of business or the DOJ yanks your FFL for not complying with state law.

Adios,
Phil

Phil,

Feel as you please, but California law does not mandate that I make bad business decisions, and spending an hour to make $10, while placing my business, family, and home at risk is a bad business decision.

Boy, tough crowd.

I live in NY state and my guy charges $20. only $15 for regular customers. If you ship or recieve a bunch of guns, he does them for $10 each. of course actual shipping costs are additional. He is cheaper than some. Quite common to see $30 to $40 around here.

I've had guys want $75 plus the state fee of $25 for transfers. I had guys want $75 + Tax + $25 for the transfer. Then I ran into my new friend who wants $5 + $25. I asked him why he charges only $5. He said he wants to encourage Californians to buy guns, not discourage them. He gets a lot of hate mail from other FFL's here in town because he charges so little, some quite threatening. He's just doing what he feels is right, and I appreciate it.

As to the tax issue, he doesn't charge tax on transfers. As far as he knows, this is just a transfer. If a fellow buys something FROM him, he is obligated to charge sales tax and report it.

I've only paid a transfer fee on purchases, no sales tax. This is the same (in Virginia) as if you order a new shirt from LL Bean in Maine and have it shipped interstate. Many states want to tax out-of-state purchases (they are loosing reveue from internet sales), maybe California is just ahead of the others.