1. Attention: We have put together a thread with tips and a tutorial video to help with using the new software. Please take a moment to check out the thread here: Trapshooters.com Tutorial & Help Video.
    Dismiss Notice

New out-of-state gun - Taxex?

Discussion in 'Shooting Related Threads' started by shootsatem, Dec 19, 2009.

Thread Status:
Not open for further replies.
  1. shootsatem

    shootsatem TS Member

    Joined:
    Jan 29, 1998
    Messages:
    28
    If a new gun is purchased from a dealer in another state, and that dealer does not have any store/shop in the state where the purchaser resides, and the deal is handled by a FFL licensee in the purchasers state, does the person who bought the gun need to pay state sales tax in the state in which he resides???
     
  2. slugbug1

    slugbug1 Member

    Joined:
    Jan 29, 1998
    Messages:
    803
    No. GaryL.
     
  3. banker

    banker Member

    Joined:
    Jan 29, 1998
    Messages:
    64
    Is the receiving FFL holder required to collect the sales tax? Does he pay sales tax on the transfer fee only?
     
  4. 635 G

    635 G Well-Known Member

    Joined:
    Jun 30, 2008
    Messages:
    6,220
    I've bought several guns from out of state. Only one person with a FFL wanted to collect sales tax. When I said I would only pay sales tax if I could make out a check payable to my states dept of revenue & taxation, he refused. I think this guy was pocketing the tax money.

    Phil Berkowitz
     
  5. Mike Battista

    Mike Battista Well-Known Member Supporting Vendor

    Joined:
    Jan 29, 1998
    Messages:
    3,956
    Here in Florida the buyer is responsible for the Use (sales) tax on a gun that is shipped in from another state. See Florida form DR-15MO. If you paid 3% tax to the state where the item was purchased and the tax rate is 7% in Florida county where you reside then you are responsible for 4% tax to Florida. Other states have similar laws. All of the people who are having guns shipped in to Florida and think they are avoiding the tax, think again. The Florida Department of Revenue sooner or later is going to come in to the gun dealers and examine the records and if the buyer paid any tax. It will be a simple matter to get the name and address of the buyers and it will be their (buyers) responsibility to show that they paid the correct amount of tax. If not you will be subject to penalties and interest on the unpaid tax. Just like the IRS. Food for thought.
    Mike Battista
     
  6. XP100

    XP100 Well-Known Member

    Joined:
    Jan 29, 1998
    Messages:
    1,719
    In NY the State Tax Form has a line for purchases made outside of the state. In NY it is a sales and USE tax. I don't collect sales tax. I just write Transfer on receipt.
     
  7. shootsatem

    shootsatem TS Member

    Joined:
    Jan 29, 1998
    Messages:
    28
    This was a PA shooter buying from another state...
     
  8. phirel

    phirel TS Member

    Joined:
    Jan 29, 1998
    Messages:
    9,556
    The purchaser is required to pay sales tax to the State where he lives on a gun, or anything else, purchased out of state. This includes purchases made on E-Bay. I suspect not everyone does this and few, if any, States have a way to enforce the regulation.

    Pat Ireland
     
  9. Leo

    Leo Well-Known Member

    Joined:
    Jan 29, 1998
    Messages:
    3,047
    I had a guy on gunbroker (not a retail merchant) try to collect sales tax. I said no problem, all I need is a copy of your retail merchants certificate. He backed up in a hurry. I knew he was just trying to get an additional 8.25 percent in his pocket.

    The FFL handling the transfer is not making the sale, they are providing a legal service, so they cannot collect the state sales tax. If the firearm gets sent to their shop COD, that gets into a gray area. On the other hand, most states do legally have a use tax, that is a sales tax on out of state purchases. You are supposed to keep track and declare them on your state income tax forms. If you get audited, they will ding you on that also.

    It is too bad people try to make up tax stories to take advantage of customers.
     
  10. Ted K.

    Ted K. Member

    Joined:
    Feb 8, 2009
    Messages:
    507
    Location:
    Tiburon, CA
    OK, here's the reality:

    1. It is an unconstitutional burden on interstate commerce for a state to collect sales tax on a transaction where the seller is in a different state (unless the seller -like Sears- is also in the taxing state).

    2. It is not unconstitutional for a state to collect a "compensating use tax" on the use by a resident of an article purchased in another state. Credit must be given for sales tax, if any, paid in the other state. Most, if not all, states that assess a sales tax also have a use tax provision.

    3. Actual collection of use tax is problematic, and is relatively rare, because the state has no way to require the out-of-state seller to report the sale. But where the state has a lever to assess the tax, it usually does. A good example is a motor vehicle purchased out of state - the vehicle registration process gives the state an opportunity to collect the use tax, and it usually does.

    4. Note that the absence of a reporting/collection mechanism does not create an exemption for the use tax - it's just that the state doesn't have a real handle on collecting it. If a transaction created a lot of publicity - say the purchase of a famous painting - the the state might very well go after the buyer for the use tax. All it would take is a letter from the state tax authority to the buyer to start the tax ball rolling. And it is a hard ball to stop - the failure to pay the use tax within a very short period of time after the goods come into the state can give rise to fines and possibly imprisonment. So anyone who gets such a letter already has a big problem, which the state will use as a lever to compel a fairly prompt payment of the tax.

    5. Some (but not all) states exempt "casual sales" from their sales tax, a casual sale being one where the seller is not in the retail business, or some such effort to except occasional sales where the seller is not really a retailer. Not all states have this exemption, it may apply to some classes of goods but not all (e.g., used vs. new, less that $100, clothing), and the definition of casual sale varies. If a state exempts casual sales from its sales tax, it must also exempt casual sales from its use tax.

    6. Most states exclude from the use tax goods purchased well in advance of the date on which they came into the state. This avoids the problem of someone moving into the state and suddenly owing use tax on all their household goods. But these periods are usually measured in months and are fairly hard to utilize when you are buying a gun.

    I understand (but I am not sure) that California is now trying to require California FFLs to collect the California use tax on guns delivered in California. Other states may try to get on this bandwagon.

    The bottom line is that the fact that no one you know has paid sales tax on a gun brought in from out of state doesn't necessarily mean that you have no exposure. It may just mean that you are benefiting from the indolence of your state taxing authority and its minions.

    Ted K.
     
Thread Status:
Not open for further replies.