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Gun Trade-ins Handled Like Cars?

Discussion in 'Shooting Related Threads' started by JD Jake, Mar 23, 2010.

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  1. JD Jake

    JD Jake Member

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    In New York state, if you trade in a car when purchasing a new one, for sales tax purposes the amount the dealer gives toward the trade-in is subtracted from the cost of the new car. In other words, you are only taxed on the cost of the new car minus what you get for your trade-in.

    Does it work the same in New York when you trade a used gun toward the purchase price of a new gun?

    Thanks,

    JD
     
  2. oldgahchamp

    oldgahchamp Active Member

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    It should. Did you make a deal with trade and pay full sales tax? Larry
     
  3. Savage99Stan

    Savage99Stan Active Member

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    In IL, we take the retail price, subtract the trade-in and only tax the difference.
     
  4. AveragEd

    AveragEd Well-Known Member

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    That's how it should be done but I know why he's asking the question. I've had gun dealers attempt to charge me sales tax on the price of the new gun without regard for the trade several times. It must be an industry practice to bump up the gross profit on the sale.

    Ed
     
  5. 221

    221 Banned User Banned TS Supporters

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    I think a little research would be more appropriate than bashing gun dealers erroneously. If it's the law, it is not the gun industries fault......

    <em>"Industry practice to bump up gross profit"</em>......what a childish thing to say

    <em>"That's how it should be done but I know why he's asking the question. I've had gun dealers attempt to charge me sales tax on the price of the new gun without regard for the trade several times. It must be an industry practice to bump up the gross profit on the sale.

    Ed"</em>
     
  6. grnberetcj

    grnberetcj Active Member

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    Ah...Sales Taxes....

    Delaware = No Sales Tax.

    Priceless.

    Curt
     
  7. AveragEd

    AveragEd Well-Known Member

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    221, this happened in Pennsylvania, where it is determined by LAW that consumers pay sales tax on the out-of-pocket amount. So much for your first sentence.

    Next, the ONLY times I have experienced that practice has been during a transaction with a firearms dealer. Given that, what would you propose that a consumer should think?

    By the way, on every occasion, it was a Pennsylvania dealer selling guns in Pennsylvania, so an excuse of a lack of familiarity with our state laws doesn't hold water. And in some cases, I'm not talking about a couple of dollars. I still remember the first time I encountered the practice - I was interested in buying a $7,600 gun, had a trade for which I was being allowed $5,500 and the dealer wanted sales tax on $7,600 instead of $2,100. That $330 in extra tax feels as good in my pocket as it would have in his.

    Hey, how's that release trigger workin' for ya?

    Ed
     
  8. eightbore

    eightbore Well-Known Member

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    I think we know what the real story is. If you want the fellow to go by the book, ask him for an itemized invoice on his letterhead. In my experience, no letterhead, no invoice, means no tax paid.
     
  9. XP100

    XP100 Well-Known Member

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    I have customers that want to leave a gun on consignment that I did not take in trade and want the sales tax deducted on the gun they bought. I tell them No. Only a couple have gotten Pissed the others understand.
    If I take a gun in on trade I only charge tax on the difference in price of trade in and the new gun they bought. . The buyer of the trade-in pays tax on the selling price of that gun. I am in NY State
     
  10. AveragEd

    AveragEd Well-Known Member

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    That's how it is here, too. Except if the buyer of the new item brings a buyer along for his trade. Then it is legal for the dealer to charge sales tax on the difference between the two sale prices, "buy the trade" and resell it to the new owner, charging him sales tax on what he paid for the item - less, of course, any trade that HE might have.

    People do that instead of selling the car or gun to the buyer themselves to save some of the sales tax on the new item.

    Ed
     
  11. 221

    221 Banned User Banned TS Supporters

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    ed....

    This took me a total of about 30 seconds to find.....

    <em>"7. Does a trade-in reduce the price when calculating sales or use tax?

    Yes – when a motor vehicle is traded for a new motor vehicle, all-purpose vehicle or off-highway motorcycle.

    No – when a motor vehicle is traded for a used motor vehicle, all-purpose vehicle or off-highway motorcycle.

    No – when a watercraft, outboard motor or personal watercraft is traded for a new or used motor vehicle, all-purpose vehicle or off-highway motorcycle.

    No – when a vehicle is under a valid lease and the lessee is attempting to trade-in the vehicle that is titled in the name of the leasing company. Under the terms of most lease agreements, the leasing company (during the life of the lease) can only sell (transfer title for consideration) the leased vehicle to the lessee or to a dealer. If the leasing company sells the vehicle to a dealer, it is no longer available to be used as a trade-in by the lessee. Note: The answer would be yes if the lessee first purchased the leased vehicle (paying sales tax on the purchase price paid to the leasing company), had title issued in the lessee’s name, and then used the vehicle as a trade-in on the purchase of a new motor vehicle.

    Yes – when a watercraft, outboard motor or personal watercraft is traded for a new/used watercraft, outboard motor, and/or personal watercraft and the seller (located in-state or out-of-state) is, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division. License format is OH NNNN ZZ.

    No – when a watercraft, outboard motor, or personal watercraft is traded for a new/used watercraft, outboard motor or personal watercraft and the seller (located in-state or out-of-state) is not, at the time of sale, licensed as a watercraft dealer through the Ohio Department of Natural Resources, Watercraft Division.

    No – when a motor vehicle is traded for a watercraft, outboard motor or personal watercraft."</em>

    ed why don't you try the same, instead of spewing your BS

    BTW.....ed.......hows the oil analyzer on your vehicle working.
     
  12. 221

    221 Banned User Banned TS Supporters

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    Heres another state......

    <em>"9.Are trade-ins taxable?
    Yes. The value of a trade-in is considered taxable. For example, if you sold a car for $20,000 and accepted a trade-in valued at $4,000 as partial payment, tax would be based on the $20,000 selling price (that is, you would not deduct the value of the trade-in from the sales price of the car being sold when computing sales tax)."</em>


    ed..... you owe the "INDUSTRY" an apology......That should make for a good article in some gun rag......Remember the story writer that took a shot at Black Guns........what you said is no better.
     
  13. AveragEd

    AveragEd Well-Known Member

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    My friend, I don't know where you got that information but according to it, EVERY car dealer in Pennsylvania has been breaking the law, some a hundred times a month, for the 38 years I was in the business. Obviously, that hasn't been happening as a few dealers I know very well are also attorneys. And I can tell you that the Commonwealth of Pennsylvania's Department of Revenue wouldn't have allowed that much tax income to slip through their fingers.

    I honestly believe you got information for another state because in my years of buying and selling taxable items in this state, I have never charged or been charged tax on anything but the out-of-pocket amount (with a few exceptions that started this debate). If you live in Pennsylvania, you know that is true or you've been being ripped off your entire life.

    I have several business licenses, some of which required me to pass a test on business practices. One of those licenses is for collecting sales tax and forwarding it to the state every three months. The form I complete asks for the total amount of my quarterly sales less any items taken in trade for wholesale or retail resale. The amount of sales tax I owe is 6% of that net figure less a 1% "commission" for collecting it.

    Ed
     
  14. 221

    221 Banned User Banned TS Supporters

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    A knowledgeable person would know that the rest of the US does not operate under Pa rules........you said "Industry practice"........not local rules......You need to get out more or curb your BS statements........

    ed .....just read what you said......your words......you never limited your response to PA, and your limited exposure to the rest of the country........This is the WWW.....whether you realize it or not.
     
  15. 870

    870 Well-Known Member

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    To address the original post:

    In NY, if a vendor accepts property as a trade-in, and the property traded-in is intended for resale by the vendor, taxable receipts do not include the amount credited for the trade-in. In other words, the tax is calculated on the net.
     
  16. AveragEd

    AveragEd Well-Known Member

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    221, regarding my inferring that the entire country followed the laws of Pennsylvania in my first post, you are probably correct. But I believe I did later mention "Pennsylvania" several times in subsequent posts and actually thought you were quoting what you believed to be Pennsylvania law. As I've told you, that would not be correct and as 870 pointed out, it wouldn't be in New York, either.

    Regardless, let's drop the subject and agree that we misunderstood each other.

    Ed
     
  17. cementman

    cementman Member

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    In Michigan you pay sales tax on the sale price not including any deduction for trade-in value, if any on the item.
     
  18. Shooting Jack

    Shooting Jack Active Member

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    In Georgia you pay taxes on what you pay for the item be it guns, cars or whatever. I take trade ins all the time and the customer only pays taxes on his final cost not the original price. Jackie B.
     
  19. kraiza

    kraiza Active Member

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    I live in N.Y.. When I traded in a gun I only paid the tax on the different.
     
  20. phirel

    phirel TS Member

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    Ed- I I traded in a gun worth $3000 for a gun that sells for $2,000 and get $1,000 from the dealer, would the dealer owe me sales tax on the $1,000?

    Pat Ireland
     
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