FFL's and state sales tax

leadchucker · November 27, 2012, 01:43 PM

Some local FFL's simply charge a flat fee to do a firearm transfer. Others charge a fee, and also charge state sales tax.

I'm told by some that as long as the firearm does not show up on the business inventory, no business sale has occurred, and therefore no sales tax is due on a transfer.

I'm told by others that the state revenue department could intrerpret an entry in an FFL's bound book as a sale, and therefore expect that sales tax is due on the transfer.

I guess it might depend on the state. I'm kinda suspecting that the dealers around here that do charge sales tax are just padding their fees, and are not in fact paying this money to the state revenue department.

What do ya think?

Brian Pfleuger · November 27, 2012, 01:57 PM

From one state to another, there might be a difference, in one state any differences would be most troubling to me. One dealer or the other is breaking the law.

IMO, the answer would need to come in official form from your state's Department of Taxation and Finance.

I do know that in NY state, there is no such sales tax. It's a transfer, not a sale. The transfer itself is a service, not subject to tax, as far as I know. If it is, such tax must be included in the stated price because I've never paid any different amount.

wayneinFL · November 27, 2012, 03:22 PM

In Florida I've seen both. The way I read it, they shouldn't collect sales tax on a transfer.

IMO, I wouldn't worry about it on the state level. The state of Florida won't doesn't do regular audits unless it's a business like a car dealership that does a high volume of sales tax. They figured out it cost more to enforce it than they were recovering in unpaid taxes. A gun shop isn't going to get audited unless there's a complaint.

The only way I could see it being an issue is if the ATF decided you weren't complying with state law and revoked a FFL. IMO, the dealers here who are collecting sales tax on transfers are doing it because they're overly cautious. Of course, the state isn't too concerned with people collecting more tax than they're supposed to, just concerned with people collected less tax. I see convenience stores collecting tax on over the counter drugs. It's clear cut, but try reporting it to our DOR.

In any case, there isn't a requirement for a dealer or a private party to send an invoice to your FFL. So how does he know what you paid for the gun? If you paid for the gun. What if it was a gift? Or bartered? Or inherited? He's not a party to the money changing hands.

He's not doing the sale. He's handling a transfer of title. Not even that. He's handling a transfer of possession between two parties. No sale.

throttleup · November 27, 2012, 03:31 PM

I cannot speak for other states but in North and South Carolina a transfer is a service not a sale and is not subject to sales tax. There is nothing that requires the transferring FFL to even know the sales price. If you buy out of state you are under the honor system to declare any unpaid sales taxes when you file your State Income Tax form. And of course, we all do.

ohiomossyoak · November 27, 2012, 04:42 PM

Fee around here is 25-30$ so states sales tax(7 1/2 %) isnt a big deal to me..But I am curious as to the answer as it applies to ohio

twobit · November 27, 2012, 05:58 PM

The place I use in Texas charges sales tax. It is a one horse town so I have no other store to compare it to as to whether they should or should not charge sales tax.

Onward Allusion · November 27, 2012, 06:10 PM

TX taxes services... Sales tax is another one of those crazy things that vary from State to State.

sigcurious · November 27, 2012, 06:27 PM

NC Use Tax FAQ

As with many(all?) states, the FAQ indicates its the buyers responsibility to note and pay use tax with their state income tax filings. However, in some places the state specifically mandates that FFLs collect the use tax on firearms transfers.

Either way, this is their contact page, and they'd be able to give you a definitive answer.

Xfire68 · November 27, 2012, 07:39 PM

I have seen both here in IL. I was going to do a transfer at a local gun shop until he told me he had to charge sales tax?? I called my FFL I normally go through and he said if he did not order the gun from his supplier he does not charge sales taxes. So some ARE charging sales taxes on guns that they are not "Selling" and I wonder if these funds are being sent to the state or in their pockets????

I just ordered some new handgun's from Buds this week and before I ordered them my FFL wanted to see if he could get them cheaper for me, after checking he could beat the price per gun by $10 but........ shipping fees were $10 per gun and state sales taxes knocked him out of the deal!

dogtown tom · November 27, 2012, 08:06 PM

Quote:

twobit The place I use in Texas charges sales tax. It is a one horse town so I have no other store to compare it to as to whether they should or should not charge sales tax.

You don't need to look at any other stores.........the State of Texas does NOT charge sales tax on a firearm transfer....only on the SALE of a firearm.

The State Comptroller Newsletter repeats this notice quite often:http://www.window.state.tx.us/taxinf...10.html#issue4

twobit · November 27, 2012, 08:50 PM

Dogtown Tom, I'd definitely use you if you we're not 350 miles from me. Texas is a big state. I'm gonna print that and take it to my FFL

TMD · November 27, 2012, 09:19 PM

Quote:

TX taxes services... Sales tax is another one of those crazy things that vary from State to State.

If your FFL is charging you sales tax then he's just charging you extra. In Texas services are not taxable only products. Your FFL is not selling you a product only a service. Find a different FFL.

Onward Allusion · November 28, 2012, 12:57 AM

Services (some) are taxable in TX. Here's a link:

http://www.window.state.tx.us/taxinf...s/tx96_259.pdf

It is interesting that Firearm transfers are specifically identified as non-taxable...

Doyle · November 29, 2012, 04:33 PM

Quote:

In Florida I've seen both. The way I read it, they shouldn't collect sales tax on a transfer.

In Fl, they should never charge sales tax on a transfer as services aren't taxed in FL. If they are charging, you can report them to the state Dept of Rev.

twobit · November 29, 2012, 06:20 PM

UPDATE:
I just picked up a Rossi 92 yesterday shipped from out of state at my Texas FFL (that I thought had charged me tax in the past). They did not charge tax, only the flat $30 fee.

Ajtozzi · November 29, 2012, 06:51 PM

They can't charge you sales tax since you're not buying anything from them other than their services (the transfer). If you drop shipped a set of tires to a mechanic he doesn't charge you sales tax on the tires, does he?!?!

chiefr · November 29, 2012, 08:40 PM

I guess sales taxes would be firearms related and concerns many of us enthusiasts due to the internet. When you buy a gun other than locally you can incur three costs that can really drive the price up:
1. FFL transfer fee
2. Shipping cost
3. Sales taxes

Taxes are always and interesting subject. Since we are talking sales taxes, keep in mind only states and municipalities charge sales tax. There is no federal sales tax (At least not yet) Plus some states have no sales tax at all.

In most cases. Licenced dealers must collect sales taxes if the sale is in their state. They can also collect sales taxes form a sale in another state if they have a franchise in that state; if that states law days they must collect.
Private transactions between individuals do not require collection of sales tax

November 27, 2012, 01:43 PM	#1
leadchucker Senior Member Join Date: March 5, 2011 Location: NC Posts: 252	FFL's and state sales tax Some local FFL's simply charge a flat fee to do a firearm transfer. Others charge a fee, and also charge state sales tax. I'm told by some that as long as the firearm does not show up on the business inventory, no business sale has occurred, and therefore no sales tax is due on a transfer. I'm told by others that the state revenue department could intrerpret an entry in an FFL's bound book as a sale, and therefore expect that sales tax is due on the transfer. I guess it might depend on the state. I'm kinda suspecting that the dealers around here that do charge sales tax are just padding their fees, and are not in fact paying this money to the state revenue department. What do ya think?

November 27, 2012, 01:57 PM	#2
Brian Pfleuger Moderator Emeritus Join Date: June 25, 2008 Location: Austin, CO Posts: 19,578	From one state to another, there might be a difference, in one state any differences would be most troubling to me. One dealer or the other is breaking the law. IMO, the answer would need to come in official form from your state's Department of Taxation and Finance. I do know that in NY state, there is no such sales tax. It's a transfer, not a sale. The transfer itself is a service, not subject to tax, as far as I know. If it is, such tax must be included in the stated price because I've never paid any different amount. __________________ Nobody plans to screw up their lives... ...they just don't plan not to. -Andy Stanley

November 27, 2012, 03:31 PM	#4
throttleup Member Join Date: February 12, 2011 Posts: 67	Sales Tax on Transfers I cannot speak for other states but in North and South Carolina a transfer is a service not a sale and is not subject to sales tax. There is nothing that requires the transferring FFL to even know the sales price. If you buy out of state you are under the honor system to declare any unpaid sales taxes when you file your State Income Tax form. And of course, we all do.

November 27, 2012, 04:42 PM	#5
ohiomossyoak Senior Member Join Date: December 15, 2010 Location: East Central Ohio Posts: 143	Fee around here is 25-30$ so states sales tax(7 1/2 %) isnt a big deal to me..But I am curious as to the answer as it applies to ohio __________________ First it's pretty tires, then it's pretty guns and bows...next thing you know, you're shavin' your beard and wearin' capri pants

November 27, 2012, 05:58 PM	#6
twobit Senior Member Join Date: February 25, 2010 Location: Coyote Creak, SW Texas Posts: 597	The place I use in Texas charges sales tax. It is a one horse town so I have no other store to compare it to as to whether they should or should not charge sales tax. __________________ Twobit, Strive to live up to the opinion that your dog has of you.

November 27, 2012, 03:22 PM	#3
wayneinFL Senior Member Join Date: December 18, 2004 Posts: 1,944	In Florida I've seen both. The way I read it, they shouldn't collect sales tax on a transfer. IMO, I wouldn't worry about it on the state level. The state of Florida won't doesn't do regular audits unless it's a business like a car dealership that does a high volume of sales tax. They figured out it cost more to enforce it than they were recovering in unpaid taxes. A gun shop isn't going to get audited unless there's a complaint. The only way I could see it being an issue is if the ATF decided you weren't complying with state law and revoked a FFL. IMO, the dealers here who are collecting sales tax on transfers are doing it because they're overly cautious. Of course, the state isn't too concerned with people collecting more tax than they're supposed to, just concerned with people collected less tax. I see convenience stores collecting tax on over the counter drugs. It's clear cut, but try reporting it to our DOR. In any case, there isn't a requirement for a dealer or a private party to send an invoice to your FFL. So how does he know what you paid for the gun? If you paid for the gun. What if it was a gift? Or bartered? Or inherited? He's not a party to the money changing hands. He's not doing the sale. He's handling a transfer of title. Not even that. He's handling a transfer of possession between two parties. No sale.

November 27, 2012, 06:10 PM	#7
Onward Allusion Senior Member Join Date: November 17, 2009 Location: Back in a Non-Free State Posts: 3,133	TX taxes services... Sales tax is another one of those crazy things that vary from State to State. __________________ Simple as ABC . . . Always Be Carrying

November 27, 2012, 06:27 PM	#8
sigcurious Senior Member Join Date: May 25, 2011 Posts: 1,755	NC Use Tax FAQ As with many(all?) states, the FAQ indicates its the buyers responsibility to note and pay use tax with their state income tax filings. However, in some places the state specifically mandates that FFLs collect the use tax on firearms transfers. Either way, this is their contact page, and they'd be able to give you a definitive answer.

November 27, 2012, 07:39 PM	#9
Xfire68 Senior Member Join Date: March 31, 2010 Location: Communist State of IL. Posts: 1,562	I have seen both here in IL. I was going to do a transfer at a local gun shop until he told me he had to charge sales tax?? I called my FFL I normally go through and he said if he did not order the gun from his supplier he does not charge sales taxes. So some ARE charging sales taxes on guns that they are not "Selling" and I wonder if these funds are being sent to the state or in their pockets???? I just ordered some new handgun's from Buds this week and before I ordered them my FFL wanted to see if he could get them cheaper for me, after checking he could beat the price per gun by $10 but........ shipping fees were $10 per gun and state sales taxes knocked him out of the deal! __________________ NRA Life Member, SAF Member

November 27, 2012, 08:50 PM	#11
twobit Senior Member Join Date: February 25, 2010 Location: Coyote Creak, SW Texas Posts: 597	Dogtown Tom, I'd definitely use you if you we're not 350 miles from me. Texas is a big state. I'm gonna print that and take it to my FFL __________________ Twobit, Strive to live up to the opinion that your dog has of you.

November 28, 2012, 12:57 AM	#13
Onward Allusion Senior Member Join Date: November 17, 2009 Location: Back in a Non-Free State Posts: 3,133	Services (some) are taxable in TX. Here's a link: http://www.window.state.tx.us/taxinf...s/tx96_259.pdf It is interesting that Firearm transfers are specifically identified as non-taxable... __________________ Simple as ABC . . . Always Be Carrying

November 29, 2012, 06:20 PM	#15
twobit Senior Member Join Date: February 25, 2010 Location: Coyote Creak, SW Texas Posts: 597	UPDATE: I just picked up a Rossi 92 yesterday shipped from out of state at my Texas FFL (that I thought had charged me tax in the past). They did not charge tax, only the flat $30 fee. __________________ Twobit, Strive to live up to the opinion that your dog has of you.

November 29, 2012, 06:51 PM	#16
Ajtozzi Member Join Date: September 14, 2011 Location: NJ Posts: 87	They can't charge you sales tax since you're not buying anything from them other than their services (the transfer). If you drop shipped a set of tires to a mechanic he doesn't charge you sales tax on the tires, does he?!?!

November 29, 2012, 08:40 PM	#17
chiefr Senior Member Join Date: January 27, 2010 Location: AR Posts: 1,401	I guess sales taxes would be firearms related and concerns many of us enthusiasts due to the internet. When you buy a gun other than locally you can incur three costs that can really drive the price up: 1. FFL transfer fee 2. Shipping cost 3. Sales taxes Taxes are always and interesting subject. Since we are talking sales taxes, keep in mind only states and municipalities charge sales tax. There is no federal sales tax (At least not yet) Plus some states have no sales tax at all. In most cases. Licenced dealers must collect sales taxes if the sale is in their state. They can also collect sales taxes form a sale in another state if they have a franchise in that state; if that states law days they must collect. Private transactions between individuals do not require collection of sales tax