View Full Version : Online firearms purchases and state sales tax
Been buying from Bud's for a few years now and they often (but not always) have the best prices on guns I'm interested in. Was going to order a handgun from them today and noticed that they now charge state sales taxes. Did an Internet search out of curiosity and found a retailer that sold the same gun without sales tax (and just $2 more than Bud's) so I ended up ordering from them.
I know that this was inevitable, and it does give a boost to the local gun shop because online ordering is now not such a deal that it was in the past. I guess I'm curious though - why some online retailers are charging tax and some aren't? Is there a deadline for this to be implemented?
June 2018 SCOTUS ruled that States can force online retailers to collect sales tax. Some States do, some don't. Not all business, it would seem, comply with the new regulations.
This may be it:
https://smallbiztrends.com/2019/01/list-of-states-with-internet-sales-tax.html
SomeOtherGuy
10-04-19, 13:01
June 2018 SCOTUS ruled that States can force online retailers to collect sales tax. Some States do, some don't. Not all business, it would seem, comply with the new regulations.
This. Wayfair v. South Dakota. Not all states apply their tax this way, and the ones that do may exempt other-state retailers with sales below a threshold.
The vast majority of online retailers, even smaller ones, now collect sales tax.
FYI, in most states with sales tax, you were supposed to be paying "use tax" on mail order sales anyway. Few people did, but most states had it.
Grand58742
10-04-19, 13:29
Oklahoma taxes the hell out of Amazon purchases.
Taxing internet purchases is the correct thing to do.
Taxing internet purchases is the correct thing to do.
Hush you.
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Hush you.
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Agreed
Diamondback
10-04-19, 23:33
This is another reason why I only buy stripped lowers rather than complete guns, minimize my tax liability. (Dear Ambulance Chaser Inslee: if you can read this, apply oral suction to my anal region.)
I spoke to the FFL that does my transfers about this just a week ago. I checked in to be sure he was still doing transfers and for how much. He gave me the fees and said ... and also sales tax. So I asked with all the online businesses collecting sales tax now, what do I do if they want to collect tax as well.
His answer...... They are not going to charge you tax. That actually seems right me on the firearms because the local dealer is doing the final exchange. The FLLs should just let the guy at the end of the line collect the tax. They both can't collect it.
I didn't order the gun I was looking at so not sure how it would have gone.
I spoke to the FFL that does my transfers about this just a week ago. I checked in to be sure he was still doing transfers and for how much. He gave me the fees and said ... and also sales tax. So I asked with all the online businesses collecting sales tax now, what do I do if they want to collect tax as well.
His answer...... They are not going to charge you tax. That actually seems right me on the firearms because the local dealer is doing the final exchange. The FLLs should just let the guy at the end of the line collect the tax. They both can't collect it.
I didn't order the gun I was looking at so not sure how it would have gone.
If he was just doing a transfer I'd bet the FFL was going to pocket the "sales tax" money you pay him. Slick move right there. Sales tax is *supposed* to be collected by the seller, be it in-state or out-of-state. The FFL merely doing a transfer isn't responsible for collecting sales tax. Now if he ordered you the gun and you paid him for it then yes, he can collect sales tax. But if you paid Joe's Gun Shack in another state for the gun and the FFL is just going to transfer it to you he should only be charging whatever his license-use fee is and the cost of a background check. He has no business, in that particular transaction, collecting sales tax.
If he was just doing a transfer I'd bet the FFL was going to pocket the "sales tax" money you pay him. Slick move right there. Sales tax is *supposed* to be collected by the seller, be it in-state or out-of-state. The FFL merely doing a transfer isn't responsible for collecting sales tax. Now if he ordered you the gun and you paid him for it then yes, he can collect sales tax. But if you paid Joe's Gun Shack in another state for the gun and the FFL is just going to transfer it to you he should only be charging whatever his license-use fee is and the cost of a background check. He has no business, in that particular transaction, collecting sales tax.
^^^ This.
Firearms transfers are a service, the FFL doing the transfer isn't selling you any physical goods. If a dealer even mentioned trying to collect sales tax on the purchase price of an item that I didn't purchase directly from him I'd be done with that business for good, and would probably warn my buddies as well.
Actually that makes sense... I need to look up some of my old receipts. I don't seem to recall him charging tax. I do seem to recall another FFL charging tax though.
I doubt he is pocketing the money. He only charges $10 for a transfer. Why would he risk stealing from the State in writing. Honestly, I don't care who gets the tax as long as I only get charged once.
I -think- that is why some VA FFLs would charge tax in the past. Product would come through their company that had had no tax paid on it, so they charged it. That seems ok to me except the out of state FFL probably paid sales and use tax on it to their state. So now it's been taxed twice.... and that was before all this new Internet tax stuff.
I guess my theory was something on the order of... Part is made and sold to FLL-1 in State A. FFL-1 pays sales and use tax on it. Prices it accordingly. I buy it, but it's effectively being sold to live in VA so VA tax is collected. It just seems easier to think of it as an inventory transfer from FF-1 to FFL-2. My $500 pays FFL-1 for his cost, tax, profit, etc. .. Then my $25 tax is paid locally to go to VA through the VA FFL-2 as a transfer / collection agent. FFL-2 then charges me $10 for his services and $2 for a NICS. So I'm out $537 and everyone is happy. Nothing shady. The dollars stay the same regardless of who takes my $25 in taxes.
Not sure of other states but in VA we call it sales and use tax with respect to businesses. Consumers pay sales tax. Businesses pay sales and use tax. As I recall, I -think- the sales and use tax may be a shade less than sales tax. So yes a filer could pick up a tiny percentage of all collected tax if it's still done that way. But again, it would not change what I pay as a consumer.
I just don't want FFL-1 and FFL-2 trying to charge me tax and I agree with you... if FFL-1 is selling me goods, he's now supposed to collect VA state tax.
He was so adamant about FFL-1 not charging me tax that I just assumed the .gov had maybe instructed FFLs to have the local guy do the collections. I think I'll email the vendor and see what they say.
ETA: Well I just contacted the vendor. They listed every State by name. So they will collect tax. I sent my FFL a screen shot with Virginia listed and his Company on the map as a FLL associated with the Vendor. Will be interesting to see what he says now.
Agreed
Taxation is theft
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There is a Minecraft mod that lets you violently rob the ghettos in a purge style scenario to get back your tax money.
The NPCs offer armed resistance but are easily defeated with sheer violence of action.
Many are wearing chains and carrying bills.
It’s the best MMORPG that needs more players
Actually that makes sense... I need to look up some of my old receipts. I don't seem to recall him charging tax. I do seem to recall another FFL charging tax though.
I doubt he is pocketing the money. He only charges $10 for a transfer. Why would he risk stealing from the State in writing. Honestly, I don't care who gets the tax as long as I only get charged once.
I -think- that is why some VA FFLs would charge tax in the past. Product would come through their company that had had no tax paid on it, so they charged it. That seems ok to me except the out of state FFL probably paid sales and use tax on it to their state. So now it's been taxed twice.... and that was before all this new Internet tax stuff.
I guess my theory was something on the order of... Part is made and sold to FLL-1 in State A. FFL-1 pays sales and use tax on it. Prices it accordingly. I buy it, but it's effectively being sold to live in VA so VA tax is collected. It just seems easier to think of it as an inventory transfer from FF-1 to FFL-2. My $500 pays FFL-1 for his cost, tax, profit, etc. .. Then my $25 tax is paid locally to go to VA through the VA FFL-2 as a transfer / collection agent. FFL-2 then charges me $10 for his services and $2 for a NICS. So I'm out $537 and everyone is happy. Nothing shady. The dollars stay the same regardless of who takes my $25 in taxes.
Not sure of other states but in VA we call it sales and use tax with respect to businesses. Consumers pay sales tax. Businesses pay sales and use tax. As I recall, I -think- the sales and use tax may be a shade less than sales tax. So yes a filer could pick up a tiny percentage of all collected tax if it's still done that way. But again, it would not change what I pay as a consumer.
I just don't want FFL-1 and FFL-2 trying to charge me tax and I agree with you... if FFL-1 is selling me goods, he's now supposed to collect VA state tax.
He was so adamant about FFL-1 not charging me tax that I just assumed the .gov had maybe instructed FFLs to have the local guy do the collections. I think I'll email the vendor and see what they say.
ETA: Well I just contacted the vendor. They listed every State by name. So they will collect tax. I sent my FFL a screen shot with Virginia listed and his Company on the map as a FLL associated with the Vendor. Will be interesting to see what he says now.
I managed an LGS in VA for a few years and we charged transfers as a non-taxable service. Sales tax was only applied to goods purchased from the store.
If he's charging you sales tax on an item that he did not purchase I'd say there's a possibility he's just pocketing the money to help bump his transfer fee. I can't see the state expecting him to collect sales tax on an item that he did not buy/resell/etc.
Also, why is it any of his business what you paid the online vendor for the item? Is he requiring you to disclose that when you pick up your transfer, or is he determining the price he uses to calculate the tax he charges in some other way?
Just heard back from him. If tax shows up on the invoice, he will not double tax me.
As to your last question... I have always just assumed he was sent a copy of the invoice. I have never cared that he sees an invoice. He's running a business the way he wants. I'm buying guns the way I want. He knows where the stuff is coming from and has never said... 'you should let me order it for you next time" or "I could have given you a better price" or even "how the hell do they sell you that for that price?". So I don't care if he knows what I paid for it.
This is not some fly by night guy with an agenda. His style of business fits my style of purchasing. I expect that his mentioning sales tax was to put me on alert that if I thought I was going to transfer something in without paying tax it was not going to happen. Maybe that had happened in the past, I honestly don't know. I do know that over the past year everything I buy, Amazon, eBay, China ( yes I buy little pieces parts of electronics there to experiment with. No more electronics shop on the corner ) everywhere I get charged tax.
Speaking of LGS.... so I live where there is a huge LGS. If I go shop there I expect to help them keep the lights on. Now the time it takes them to do a transfer is minimal. So instead of charging $25 to $35 for a transfer, why can't they do a "earn points" system. so maybe I see a gun here on EE and want to transfer it in and have earned enough points to get a free transfer. They charge premium prices on new guns, buy used at a huge discount and have rapid turnover. It seems like to me if they did affordable transfers they would make it up full out retail sales. I get the shops and individual FFLs charging full rate but why to top dogs that are true 'dealers' in new and used guns. Why not absorb the service fee through a customer loyalty program? It seems like a no-brainer to me.
Taxation is theft
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agree 1000%, hence agreeing with you telling him to hush
I'm happy you like your dealer, and have no skin in whether or not you choose to continue using him. I'm merely saying that having been on his side of things in VA I find the idea that he's collecting sales tax for the state when you buy a gun from an online retailer puzzling at best.
In my experience, VA Dept of Tax did not expect us to collect sales tax on transfer guns, and so we did not, as they were not inventory that we purchased for the purpose of reselling. I don't know of a mechanism for a business in VA to collect and report sales tax on items they did not actually sell.
One caveat, if the purchase is through something like Gallery of Guns then he is actually selling you the firearm, and so it would make sense for you to pay tax (but not a transfer fee).
If you're happy with the arrangement, drive on.
I'd be shopping somewhere else.
I looked up a receipt from 2015. Had the receipt from the Internet Vendor and the Local FFL.
Internet Invoice included in shipment with serial number. $70 + $6 shipping $76 Total.
FFL invoice to me
Column 1 Row 1 Item and serial number no dollar amount.
Row 2 Tax $4
Row 3 Check $2
Row 4 Transfer Fee $10
Total Due $16
Also not sure if you are aware but VA has added to yearly income tax a question of unpaid taxes from Online or mail order purchases.
How he reports it... I don't know. Line 2 maybe for Personal Use. His business used the item for those 10 minutes to log it in.
I'm not sure what other FFLs are doing because I used to have people that would do free transfers or I bought local.
I'd be shopping somewhere else.
Well, I could certainly do that. Then instead of paying $16 and having written proof that I paid my State tax if the State of VA ever question me. I could just go to another FLL and pay $35, get no proof that I paid Tax and have to deal with that on my State Taxes every year.
Like I say. What he does with the money is none of my business. I have written proof that I have done right. I got it for $60 per hour rate by your estimation. that seems like a fair fee for a licensed professional. Or I can pay $180 an hour and possibly be liable to the government when I walk out the door.
A quick search of FFLs around here does not mention tax on their fee schedule. The rates range from $150/hr to $600/hr . Colonial Shooting Academy... largest facility on east coast... $300/hr unless you are member then it's only $150/hr
So yeah, I'm happy with the arrangement. I get a great deal and he does my Virginia Consumer Use Tax for me if the seller didn't.
Even if the guy was unscrupulous and rang you up for sales tax if it was only a few bucks that's one thing. In TN we have a 9+% sales tax (depending on county, highest being 9.75%) so buying a $1500 higher-end AR would amount to almost $150. Something like that I could not just blow off without questioning.
Diamondback
10-06-19, 20:47
Even if the guy was unscrupulous and rang you up for sales tax if it was only a few bucks that's one thing. In TN we have a 9+% sales tax (depending on county, highest being 9.75%) so buying a $1500 higher-end AR would amount to almost $150. Something like that I could not just blow off without questioning.
Here in Seattle, we're up to at if not OVER ten percent.
The_War_Wagon
10-06-19, 20:54
Gunbroker + "Seller does not collect sales tax" =
https://www.bing.com/th?id=OIP.O82yUkkEtsig_9LYs2QpFAHaKd&w=146&h=195&c=7&o=5&dpr=2&pid=1.7
Sales tax on services in some states too.
https://www.avalara.com/us/en/learn/whitepapers/charging-sales-tax-on-services.html
I've read horror stories on the forums where people did not ask up front and the FFL charged them amounts like that. Then they say... well if you don't want to pay it you still have to pay my transfer fee and shipping back to the FLL it came from!
Now that would be rough.
I ask up front every time before I order anything. Are you still doing transfers? and What's my out the door costs?
I've read horror stories on the forums where people did not ask up front and the FFL charged them amounts like that. Then they say... well if you don't want to pay it you still have to pay my transfer fee and shipping back to the FLL it came from!
Now that would be rough.
I ask up front every time before I order anything. Are you still doing transfers? and What's my out the door coats?
Honestly, that’s on the buyer for not doing due diligence prior to transfer.
I agree but if you go online and then pull up an FFL in your area from the web site you are buying from they will tell you their fees but somehow leave out that sales tax bit.
While it's on the buyer at the end of the day, in my opinion, that is not professional behavior from the federally licensed "trusted" helpers across the country. I don't care if they charge 10 cents or $600 for a transfer, they at least should disclose up front what they will be doing. After all they are charging for that "service". I look at the posted data in a similar manner to getting an estimate for known work. You can't give someone a $10 estimate and then charge them $300 when nothing unforeseen happened. As has been mentioned here, there is generally no expectation to pay tax on a service.
Taxing internet purchases is the correct thing to do.
How much was the Stamp Tax, Tea Tax etc... that the Founders shot people in the face over? Because, I think we're over that threshold....
Taxing internet purchases is the correct thing to do.
I would really like to hear the logic behind this one. Please share.
I would really like to hear the logic behind this one. Please share.
Someone correct me if I am wrong. It is my understanding that the buyer is responsible for paying sales tax if it isn't collected by the seller. That is why online retailers get away with not collecting it.
Someone correct me if I am wrong. It is my understanding that the buyer is responsible for paying sales tax if it isn't collected by the seller. That is why online retailers get away with not collecting it.
Gonna go out on a limb and guess it isn't about the subtleties of law, but why anyone would indicate support for a tax of any sort.
Like many other things, it may be part of life, but unusual to effectively get a thumbs up.
Someone correct me if I am wrong. It is my understanding that the buyer is responsible for paying sales tax if it isn't collected by the seller. That is why online retailers get away with not collecting it.
That would be correct. But it is a state thing and not a FED thing. The states didn't have the authority to collect across state lines. Now they do...... so stores in California will be sending taxs to the government in North Dakota........ know what is goi going to happen next? California will get pissed tjat they are not getting all.of their taxes to support their communist programs. And the store there will end up paying both states........ and then guess who will pay for that? ..... the fine people of North Dakota will be forced to pay taxes to the communist in California to support their nefarious agenda....... and might I say they will.end up paying taxes without any form of representation...... heard that before.
There will be an issue and guess who will come in and "fix" it..... like they did healthcare.....
.gov needs YOU to pauy YOUR taxes so they can finally perfect their ATF/IRS hybrid day walker super beast who will be checking in with you about all your online firearms purchases and tax arrangements...lmao....guten tag mein herr...papers pleeez?
The founding fathers would be so ashamed
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Gonna go out on a limb and guess it isn't about the subtleties of law, but why anyone would indicate support for a tax of any sort.
Like many other things, it may be part of life, but unusual to effectively get a thumbs up.
Maybe some of our tax $$$ aren't spent properly and or are collected unfairly but being taxed is necessary. I am all for lowering taxes but not eliminating them.
This chart list what states require online venders to charge sales tax and under what circumstances. https://www.salestaxinstitute.com/resources/remote-seller-nexus-chart
Just put a SIG P226 (LE version with night sights and three mags) on layaway with Bud's. Last month it would have been $812 shipped. This month they're starting with state sales tax, so it's $881. Definitely noticeable.
Maybe some of our tax $$$ aren't spent properly and or are collected unfairly but being taxed is necessary. I am all for lowering taxes but not eliminating them.
True and sales taxes are much more legit than property taxes and infinitely more legit than taxes on being employed. The catch is rarely if ever are any repealed.
Arms related stuff should not have any special taxes (FET, NFA, and so on) just like special taxes on paper are repugnant to the first amendment.
Maybe some of our tax $$$ aren't spent properly and or are collected unfairly but being taxed is necessary. I am all for lowering taxes but not eliminating them.
Feel free to pay in extra to make up for the rest of us who don’t want to be.
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Feel free to pay in extra to make up for the rest of us who don’t want to be.
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I have no desire to pay extra but I do enjoy driving on paved roads.
I have no desire to pay extra but I do enjoy driving on paved roads.
Primarily tax on fuel.
https://www.taxpolicycenter.org/briefing-book/what-highway-trust-fund-and-how-it-financed#targetText=Most%20spending%20from%20the%20Highway,by%20state%20and%20local%20governments.
What's confusing (to me, anyway) is that different states seem to have different dollar thresholds per seller, that, once exceeded, tax is charged.
What's confusing (to me, anyway) is that different states seem to have different dollar thresholds per seller, that, once exceeded, tax is charged.
My guess would be protecting certain industries.
Just ordered a couple handgun mags from CDNN - no tax. Go figure.
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