Does FFL collect CA sale tax on PPT?

[ghost58]

Probably a stupid question, but I honestly do not know answer. The DROS fee ($25) and transfer fee ($35) plus handgun safety test ($25??) also apply. Just trying to calculate what to add to the OTD price on a PPT.

Any help is greatly appreciated.

[domokun]

A face to face private party transfer between two CA residents at a licensed dealer in CA is exactly $35 (25 dros + 10 transfer fee), no more than $35 and no less than $25. Dealer does not collect tax as the sale is between two private individuals. The money for the sale never passes through the dealers hands with the exception of the $35 PPT fee.

In short, your cost is the sale price of the gun you purchased from the individual + $35 PPT + $25 HSC test (if needed).

[ZirconJohn]

Originally Posted by domokun

A face to face private party transfer between two CA residents at a licensed dealer in CA is exactly $35 (25 dros + 10 transfer fee), no more than $35 and no less than $25. Dealer does not collect tax as the sale is between two private individuals. The money for the sale never passes through the dealers hands with the exception of the $35 PPT fee.

In short, your cost is the sale price of the gun you purchased from the individual + $35 PPT + $25 HSC test (if needed).

I concur

[ghost58]

Thanks very much. You guys are great.

[kemasa]

Except there is sales tax on the FFL transfer fee. See CA Sales Tax Firearms Information (495.0843 & 495.0848).

[halifax]

Originally Posted by kemasa

Except there is sales tax on the FFL transfer fee. See CA Sales Tax Firearms Information (495.0843 & 495.0848).

I believe both of those annotations pertain to retail sales. PPTs are not retail sales as long as the FFL did not act as a participant in the sale other than processing the state mandated paperwork. In this case, the $10 service charge is labor/service and is not taxable. A transfer fee on anything other than a PPT, however, is unless the dealer always and consistently charges a separate fee for the paperwork on every retail firearm sale.

The charge for a PPT cannot exceed $35 except as otherwise allowed under FD 2001-01 (3/26/2001)Requirement for Firearms Dealers to Conduct Private Party Transfers / Allowable Fees.


At least that is my take on a very confusing statutory/bureaucratic nightmare.

[kemasa]

I talked to the CA BOE and asked for the response in writing, for obvious reasons. What I was told on the phone was that if the firearm is taxable, then the FFL fee would be taxable. If not, then it is not.

That would mean, if they hold to that, that a PPT would not be taxable nor would a firearm coming from private sale, as long as it is an occasional sale and the person does not have a business (need letter to document that).

While the FFL is a labor fee by common sense, that is not how the BOE views it. It actually depends on whether the item is taxable or not rather than being one way or the other all the time.

[tenpercentfirearms]

No, it is an occasional sale and not a retail sale. The FFL should not collect tax on it. However if they are collecting the 83 cents on the $10, I would just let them know they shouldn't and I certainly wouldn't sweat it.

[the_tunaman]

Realizing that this is a stale thread, just wanted to offer this clarification in case others run across it as I did.

Originally Posted by kemasa

Except there is sales tax on the FFL transfer fee. See CA Sales Tax Firearms Information (495.0843 & 495.0848).

According to the DOJ, this is not true:

Does sales tax apply to the DROS fees?
No. The DROS fees are not subject to sales tax. Questions regarding firearms transfer fees can be directed to the DOJ through this website or by calling (916) 227-7527 .

http://oag.ca.gov/firearms/pubfaqs#30

I'm getting ready to do an in-state PPT myself and was told that the FFL was planning to collect sales tax on the gun, so I've been doing my homework.

No sales tax for in-state PPT, no sales tax for the DROS fees.

[kemasa]

Originally Posted by the_tunaman

Realizing that this is a stale thread, just wanted to offer this clarification in case others run across it as I did.

Actually, that is NOT a clarification, but instead FALSE information because you don't seem to understand the difference between the DROS fee and the FFL fee.

There is no sales tax on the DROS fee, which is $25, but the fee that the FFL charges, which is called the FFL fee, is subject to sales tax if the firearm is subject to sales tax.

According to the DOJ, this is not true:

http://oag.ca.gov/firearms/pubfaqs#30

As I said, two different things. You get a F on your homework.

I'm getting ready to do an in-state PPT myself and was told that the FFL was planning to collect sales tax on the gun, so I've been doing my homework.

No sales tax for in-state PPT, no sales tax for the DROS fees.

Again, your statements are not accurate as a PPT can be subject to sales tax.

There is NEVER sales tax on the DROS fee, but there can be sales tax on the FFL fee.

In order for the firearm to be exempt from sales tax it has to from a CA resident or be from a private party out of state where the firearm is a C&R handgun and the buyer has a C&R FFL, and in both cases it has to be an occasional sale and not from a business.

If the FFL gets involved in finding the buyer or seller or gets involved in the price, even if it is a PPT, the firearm is subject to sales tax.