Gunbroker 1% Compliance Fee and Sales Tax

AlongCameJones · December 2, 2021, 05:21 PM

Is it customary for the seller to charge this "compliance fee" on to the buyer? Gunbroker hits sellers with this fee.

I'm a PRIVATE seller. Why does Gunbroker.com compute sales tax on PRIVATE sales? Is the buyer required to pay sales tax on a PRIVATE sale gun purchase online?

**Aguila Blanca** · December 2, 2021, 06:24 PM

Your first question was answered in post #10 of your other thread about GunBroker:

https://thefiringline.com/forums/sho...d.php?t=613278

The answer to your second question is that Internet merchants have to collect sales taxes because the states require them to do so. GunBroker technically isn't a merchant, but in all likelihood the sale is subject to state sales tax, and the reason it doesn't happen with face-to-face private sales is just that the two participants don't report the sale or pay the tax. When a sale goes through GunBroker, the tax collectors now have an entity through which they can track the sales and collect the taxes.

AlongCameJones · December 2, 2021, 06:51 PM

I just sold a gun on GB auction. I did not charge my buyer with sales tax. I'm awaiting for his personal check to arrive in the mail still from CA to OK. GB billed me for the compliance fee. I did not charge this on to my buyer.

I will not ship the gun until the personal check clears. The buyer did not want the inconvenince of going to the post office to buy a money order.

I've sold stuff on eBay and amazon for years and there was never any issue of taxes or compliance fees. I'm a greenhorn at online gun selling. This stuff is a lot more complicated than I thought. It's a firearm, not a book or used TV set. The other thing that is a pain is that PayPal cannot be used for gun transactions.

**Aguila Blanca** · December 2, 2021, 07:12 PM

Quote:

Originally Posted by AlongCameJones

I've sold stuff on eBay and amazon for years and there was never any issue of taxes or compliance fees.

Things change. What you did years ago may not apply today.

https://www.nolo.com/legal-encyclope...-tax-laws.html

https://www.usatoday.com/story/money...rs/2387450002/

laytonj1 · December 2, 2021, 08:38 PM

My understanding is when the auction ends the buyer receives an itemized bill (item won + sales tax + compliance fee) from GB. That is what the buyer is supposed to send to you. GB then sends you a bill for the Sellers final value fee + sales tax + compliance fee.
So, he pays the sales tax and compliance fee to you and then GB collects it from you.

The last gun I sold on GB was to a FFL, so he was tax exempt (he had to register this with GB). He was not billed and I did not have to collect it.

This whole thing would be much simpler if GB would collect the sales tax/compliance fee directly from the buyer.

Jim

AlongCameJones · December 2, 2021, 09:40 PM

My BUYER also pays me the shipping cost.

As a private GB seller in Oklahoma selling to a private buyer in California via his FFL for transfer, will I still get billed by "somebody" for the sales tax I did not collect from my buyer? I already did not charge my buyer tax assuming I was exempt as a private seller selling USED merchandise. Is it too late for me to contact my buyer now and demand additional payment for sales tax?

GB DID in fact bill me for the compliance fee but I did not charge that on to my buyer either.

Gunbroker is kind of a mess.

dogtown tom · December 2, 2021, 10:18 PM

Quote:

AlongCameJones: .....Gunbroker is kind of a mess.

No, it isn't.
I have a feeling you jumped into Gunbroker without doing one bit of research into anything about GunBroker.

If you did you would have found this:
https://support.gunbroker.com/hc/en-...Tax-Collection

Quote:

How will the sales tax process flow?
GunBroker.com will calculate and add the applicable sales tax to each order being shipped to a GunBroker.com MPF State. The buyer will pay the seller the Order Total Payable, which includes the sales tax. The seller will be notified of the sales tax to remit via a sales tax statement. The tax amount will be remitted to GunBroker.com via a remittance process that is very similar to the one we use to collect fees which uses your payment method(s) on file. GunBroker.com will then remit the sales tax to the appropriate state.

Since GunBroker.com is not part of the financial transaction between the buyer and the seller, GunBroker.com cannot directly collect the sales tax from the buyer. The buyer's tax payment goes form the buyer, to the seller, to GunBroker.com and then finally to the state.

AlongCameJones · December 3, 2021, 12:13 AM

i just emailed my buyer asking to mail another check for the sales tax less a discount of $7.32 for "my bad". I told him I was a greenhorn on GB. I hope he understands.

AlongCameJones · December 3, 2021, 10:26 AM

Now the buyer is claiming that he doesn't have to pay the sales tax. I'm now disputing this issue with Gunbroker. I might have to cancel this order.

**Aguila Blanca** · December 3, 2021, 02:31 PM

Quote:

Originally Posted by AlongCameJones

Now the buyer is claiming that he doesn't have to pay the sales tax. I'm now disputing this issue with Gunbroker. I might have to cancel this order.

Apparently the buyer doesn't know how GunBroker works, either.

FrankenMauser · December 3, 2021, 04:25 PM

Quote:

As a private GB seller in Oklahoma selling to a private buyer in California via his FFL for transfer, will I still get billed by "somebody" for the sales tax I did not collect from my buyer?

Sales tax applies to all transactions. Always has.
People just didn't care and didn't want to collect in the past.

That has changed, with mandatory compliance now.
Get used to it, or stop selling online.

Your personal opinion of whether or not it should be collected is irrelevant unless you change the law.
Get used to it, or stop selling online.

cjwils · December 3, 2021, 04:45 PM

ACJones said: "As a private GB seller in Oklahoma selling to a private buyer in California via his FFL for transfer, will I still get billed by "somebody" for the sales tax I did not collect from my buyer? I already did not charge my buyer tax assuming I was exempt as a private seller selling USED merchandise. Is it too late for me to contact my buyer now and demand additional payment for sales tax?"

If your buyer in California cannot show his FFL an invoice showing that he already paid Calif sales tax, then the FFL is probably required by Calif law to collect the sales tax then. Anyway, that is how it works in Washington State.

AlongCameJones · December 3, 2021, 05:26 PM

My buyer is now refusing to send me the sales tax money. What is my recourse?

**Aguila Blanca** · December 3, 2021, 06:17 PM

Quote:

Originally Posted by AlongCameJones

My buyer is now refusing to send me the sales tax money. What is my recourse?

Frankly, IMHO this is a question that requires a lawyer to answer, after having read all the pertinent provisions of GunBroker's terms of service, Oklahoma state law, California state law, and the federal laws pertaining to taxation of on-line sales.

laytonj1 · December 3, 2021, 10:47 PM

Quote:

Originally Posted by AlongCameJones

My buyer is now refusing to send me the sales tax money. What is my recourse?

Unless the sales tax is a small enough amount that you would be willing to eat, your only option is probably to file a “non-paying bidder” with GB. That way you can get all your fees credited back to you.
Also, since you sold to a California resident, hopefully the gun you sold him is on the California approved firearm roster. You’ll also have to go thru an FFL on your end to ship it to a Cali. FFL.

Jim

Crankylove · December 4, 2021, 12:16 PM

Quote:

My buyer is now refusing to send me the sales tax money. What is my recourse?

Quote:

I did not charge my buyer with sales tax.

Pay the tax yourself, charge the buyer tax next time?

December 2, 2021, 06:24 PM	#2
Aguila Blanca Staff Join Date: September 25, 2008 Location: CONUS Posts: 18,459	Your first question was answered in post #10 of your other thread about GunBroker: https://thefiringline.com/forums/sho...d.php?t=613278 The answer to your second question is that Internet merchants have to collect sales taxes because the states require them to do so. GunBroker technically isn't a merchant, but in all likelihood the sale is subject to state sales tax, and the reason it doesn't happen with face-to-face private sales is just that the two participants don't report the sale or pay the tax. When a sale goes through GunBroker, the tax collectors now have an entity through which they can track the sales and collect the taxes. __________________ NRA Life Member / Certified Instructor NRA Chief RSO / CMP RSO 1911 Certified Armorer Jeepaholic

December 2, 2021, 09:40 PM	#6
AlongCameJones member Join Date: May 25, 2021 Location: Lawton, OK Posts: 203	My BUYER also pays me the shipping cost. As a private GB seller in Oklahoma selling to a private buyer in California via his FFL for transfer, will I still get billed by "somebody" for the sales tax I did not collect from my buyer? I already did not charge my buyer tax assuming I was exempt as a private seller selling USED merchandise. Is it too late for me to contact my buyer now and demand additional payment for sales tax? GB DID in fact bill me for the compliance fee but I did not charge that on to my buyer either. Gunbroker is kind of a mess. Last edited by AlongCameJones; December 2, 2021 at 09:58 PM.

December 2, 2021, 05:21 PM	#1
AlongCameJones member Join Date: May 25, 2021 Location: Lawton, OK Posts: 203	Gunbroker 1% Compliance Fee and Sales Tax Is it customary for the seller to charge this "compliance fee" on to the buyer? Gunbroker hits sellers with this fee. I'm a PRIVATE seller. Why does Gunbroker.com compute sales tax on PRIVATE sales? Is the buyer required to pay sales tax on a PRIVATE sale gun purchase online?

December 2, 2021, 06:51 PM	#3
AlongCameJones member Join Date: May 25, 2021 Location: Lawton, OK Posts: 203	I just sold a gun on GB auction. I did not charge my buyer with sales tax. I'm awaiting for his personal check to arrive in the mail still from CA to OK. GB billed me for the compliance fee. I did not charge this on to my buyer. I will not ship the gun until the personal check clears. The buyer did not want the inconvenince of going to the post office to buy a money order. I've sold stuff on eBay and amazon for years and there was never any issue of taxes or compliance fees. I'm a greenhorn at online gun selling. This stuff is a lot more complicated than I thought. It's a firearm, not a book or used TV set. The other thing that is a pain is that PayPal cannot be used for gun transactions.

December 2, 2021, 08:38 PM	#5
laytonj1 Senior Member Join Date: June 1, 2005 Posts: 4,443	My understanding is when the auction ends the buyer receives an itemized bill (item won + sales tax + compliance fee) from GB. That is what the buyer is supposed to send to you. GB then sends you a bill for the Sellers final value fee + sales tax + compliance fee. So, he pays the sales tax and compliance fee to you and then GB collects it from you. The last gun I sold on GB was to a FFL, so he was tax exempt (he had to register this with GB). He was not billed and I did not have to collect it. This whole thing would be much simpler if GB would collect the sales tax/compliance fee directly from the buyer. Jim

December 3, 2021, 12:13 AM	#8
AlongCameJones member Join Date: May 25, 2021 Location: Lawton, OK Posts: 203	i just emailed my buyer asking to mail another check for the sales tax less a discount of $7.32 for "my bad". I told him I was a greenhorn on GB. I hope he understands.

December 3, 2021, 10:26 AM	#9
AlongCameJones member Join Date: May 25, 2021 Location: Lawton, OK Posts: 203	Now the buyer is claiming that he doesn't have to pay the sales tax. I'm now disputing this issue with Gunbroker. I might have to cancel this order.

December 3, 2021, 04:45 PM	#12
cjwils Senior Member Join Date: November 28, 2010 Location: Washington state Posts: 401	ACJones said: "As a private GB seller in Oklahoma selling to a private buyer in California via his FFL for transfer, will I still get billed by "somebody" for the sales tax I did not collect from my buyer? I already did not charge my buyer tax assuming I was exempt as a private seller selling USED merchandise. Is it too late for me to contact my buyer now and demand additional payment for sales tax?" If your buyer in California cannot show his FFL an invoice showing that he already paid Calif sales tax, then the FFL is probably required by Calif law to collect the sales tax then. Anyway, that is how it works in Washington State.

December 3, 2021, 05:26 PM	#13
AlongCameJones member Join Date: May 25, 2021 Location: Lawton, OK Posts: 203	My buyer is now refusing to send me the sales tax money. What is my recourse?