Tax on FFL fee for CCW handgun? - Page 3

jakemccoy · #31 (**permalink**) 07-24-2007, 07:40 PM

Quote:

Originally Posted by X-ffdo

I HAVE A HEADACHE!!!!!! LUCYYYY!!!!!!!. Next time, I'll just pay and shut up!!!

LOL...I feel the same. It's just a few bucks, but I just went off the deep end when I saw my simple $250 gun turn into a $380 transaction. All the fees and then taxation of fees just really irks me.

**X-ffdo** · #32 (**permalink**) 07-24-2007, 08:25 PM

Let's face it. A lot of the smaller FFL businesses can not get the volume price that some internet outfit can get for a weapon, so they have to sell the goods at a higher price, that way they can get a decent return so that they can stay in business. A brick and mortatr FFL retailer has a lot more overhead. They can not sell you something at a loss. Basic business sense, or they won't survive.
It irks them when their inability to compete causes them to lose retail sales to an internet outfit. That is business, supply and demand.
My point is, if you say you are going to charge x amount, that's it. do not, after the fact try to jack fees up using some arcane excuse. Be up front.
It is well known that people do not pay taxes on internet sales. It simply is. "Common practices and procedures", may not be by the book, or what it was intended to be. But it simply is.
It will happen until somebody is made an example of. And it is going to have to be a darn big example!.
End of story.

**CCWInstructor** · #33 (**permalink**) 07-24-2007, 11:03 PM

Most retailers deal on a 30% market up, that's bare bones. Volume like B&B worked on 6%

**X-ffdo** · #34 (**permalink**) 07-25-2007, 01:39 AM

Well, there you go...they went under!

**Admin** · #35 (**permalink**) 07-25-2007, 04:40 AM

Quote:

Originally Posted by jakemccoy

The FFL dealer's FFL fee is taxable if California is treating that FFL dealer as the retailer.

The local FFL dealer is NOT always considered the retailer. Example, I (in northern California) call a gun retailer in southern California who sells me a gun I saw on the Internet. The southern California dealer does not charge an FFL fee but does charge sales tax on the gun price. That gun is then shipped to my local FFL dealer. My local FFL dealer is not treated as the retailer in this transaction. The southern California dealer handled the gun sale, including the state tax. My local FFL dealer charges an FFL fee but does not apply a tax to that FFL fee. At no point in these transactions is any FFL fee taxed, and correctly so.

I researched this a few months back to settle an argument with someone over taxation of out of state purchases, and IIRC this is dead on with my findings. It was discussed in detail on CalGuns. Very dry reading.

Unsurprisingly tax always needs to be paid whether in-state or out of state purchases, but there is a big difference for the FFL to figure out if it's an in-state purchase (bought from a dealer and shipped to a local FFL all within CA).

**IAmASensFan** · #36 (**permalink**) 07-25-2007, 09:29 AM

Notice Taxman is keeping silent on this?

I think this thread is "Taxing" everyone.

**CCWInstructor** · #37 (**permalink**) 07-25-2007, 11:35 AM

Quote:

Originally Posted by IAmASensFan

Notice Taxman is keeping silent on this?

I think this thread is "Taxing" everyone.

Read the whole post, he posted several times. Stop watching hockey re-runs and read completely.

**TaxMan** · #38 (**permalink**) 07-25-2007, 12:28 PM

Quote:

Originally Posted by CCWInstructor

Read the whole post, he posted several times. Stop watching hockey re-runs and read completely.

Now THAT's funny right there!!

**TaxMan** · #39 (**permalink**) 07-25-2007, 12:38 PM

Quote:

Originally Posted by jakemccoy

I think we're not all talking about the same thing, but that sounds cool for what you're talking about.

I think we are in essence. My post covered the reasoning. If the fee is included in the purchase (whether or not it should have been), then sales tax is due. The issue is really, whether or not the dealer is properly invoicing.

#1. If no fee is listed as part of the actual purchase price, no sales tax is due on the fee (since it doesn't exist).
or
#2. If the fee is listed as a part of the actual purchase price, sales tax is due on the entire purchase (fee included).

Once again, it depends on how the purchase is being reported, right or wrong it's the dealers responsibility to report his/her sales correctly.

**X-ffdo** · #40 (**permalink**) 07-25-2007, 01:50 PM

Can someone lock this?.........

**TaxMan** · #41 (**permalink**) 07-25-2007, 02:18 PM

Is it locked yet???

BexSoCal · #42 (**permalink**) 07-25-2007, 05:32 PM

i am now so very confused

**sealbeach** · #43 (**permalink**) 07-25-2007, 06:16 PM

Ah, but the FFL can add a labor charge for his "handling" the transaction, (and in truth, it is only labor, no product physically changes hands), and that labor charge would be exempt from sales tax, correct?

Lets do a hypothetical example:

gun purchase $100
sales tax 8% $8
handling (labor only) $10
DROS fee $25

total $143

The state board of equalization gets the $8
the FFL gets the $10
The state DOJ gets the $25

the handling fee should not be taxed as it is labor only, right?
And the DROS fee should not be taxed
so the only part that really can be taxed is the PURCHASE price of the gun itself.

You may wish to argue that you bought the gun out of state, but CA would argue that you really bought the gun from the local FFL, NOT the out of state FFL.

Those deals on GunBroker end up being not such great deals after all.