State sales tax legal???????

Discussion in 'General Firearms & Ammo' started by leftseat, Dec 12, 2008.

  1. leftseat

    leftseat New Member

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    Sep 24, 2008
    Cedar Hill,Tx
    Is it legal for a FFL dealer to charge sales tax on a pistol purchased from an out of state individual?
    I have never bought this way before so I don't know how it works. Does the pistol ever belong to the dealer or is he just a middle man in the transaction?
     


  2. Texas1911

    Texas1911 TGT Addict

    May 29, 2017
    Austin, TX
    The dealer takes possession of any firearm before they can transfer it to you in the 4473.

    Tax should only be applied to goods purchased at the store. If they are charging you tax for an item purchased outside of Texas, then this is not kosher business practice. You can address questions regarding sales tax to the State Comptroller's Office.
     
  3. Shorts

    Shorts TGT Addict TGT Supporter

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    Mar 28, 2008
    Texas
    Sounds like they are (over)charging a "use tax". The maximum they should be charging is 2%.


    If they are charging a full 8.25% they are charging a sales tax and use tax on an item they did not sell :mad0025:

    Some extra reading: http://www.window.state.tx.us/taxinfo/taxpubs/tx94_105.pdf
     
  4. chevydeerhunter

    chevydeerhunter Well-Known

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    Feb 23, 2008
    San Antonio
    I've never had a gun transferred so this is good information to know!
     
  5. juwaba98

    juwaba98 Well-Known

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    May 9, 2008
    North Zulch, TX
    If you have paid for the gun in full to an out of state dealer or individual then all the shop can charge is a transfer fee. This falls into "services" for tax purposes and is non-taxable. If you paid a deposit to an out of state company and owe a balance at the gunshop then you will pay tax on the balance due only (this is the way gungenie works). The shop can charge you any "fee" or "charge" or both or whatever they want for the transfer, but they cannot charge "tax" unless they are selling you something tangible.
     
  6. nalioth

    nalioth Active Member

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    . . . and you guys don't forget about Texas based distributors.

    I had a (former) FFL charge me tax on a gun I purchased in full from CDNN (out of West Texas). Since CDNN is already in Texas, they had already charged me 8.25% on the purchase.

    My (former) FFL told me "the revenuers told him to do it on every transfer".

    If they didn't stock it, they can't legally charge tax on it.
    * How do they know what you paid (or even if it was a trade)?

    They can charge tax on their transfer service, but most FFLs I know roll the tax into their 'fee' (for instance, my current FFL has a $20 fee, of which $18.48 is actually 'service charge' and $1.52 is the tax on that charge).

    My bottom line: If you pay in full from an out of state source, your FFL should only charge you a transfer fee / tax on the transfer fee.

    Anything else is most likely illegal - Find another dealer who is honest.
     
  7. JKTex

    JKTex Well-Known

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    DFW, North Texas
    If you haven't already had the gun transferred, find another FFL. And contact the Comptroller office.
     
  8. mac79912

    mac79912 Well-Known

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    +1 I order from the internet a lot and I have never been charged tax.Report this guy immediately.
     
  9. QBToo

    QBToo New Member

    Texas sales and use tax.....confusing at best but below is some excellent information.

    http://www.window.state.tx.us/taxinfo/taxforms/01-156.pdf

    Of particular note is that persons or businesses that are "permitted" for Texas sales and use tax do NOT use the Occasional Use Tax Return but rather they report the "use" income/sale on their normal sales tax return. Therefore the FFL "can" collect use tax as long as he reports and pays it to the State of Texas on his sales and use tax return.

    If the FFL collects the "use" tax (which is the same as the state + local tax where the merchandise is delivered or used) then the individual does not have to file the Occasional Use Tax Return. The problem arises in that the FFL does NOT normally know what you paid unless you tell him. So either you tell him and let him collect and REPORT the "use tax" or you file the Occasional Use Tax Report and pay it directly to the state of Texas.

    What "purchases" are subject to use tax? One of the categories on the Texas sales tax website is:
    You used property purchased from an out-of-state retailer. In general, if you purchase a taxable item from an out-of-state retailer without paying Texas tax and use the property in Texas the purchase is subject to use tax and must be reported. If you paid Texas use tax to such a retailer, you are not required to report the tax. That retailer must provide you with a receipt showing, among other things, the amount of use tax collected. You should retain a copy of the receipt showing you paid Texas tax.
    The tax rate for sales tax and for use tax is the same. The Texas state sales and use tax is 6.25%, but local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) may also impose sales and use tax up to 2% for a total maximum combined rate of 8.25%. If you purchase a taxable item, you will have to pay state and local use taxes.

    Before you "report" someone, you'd better make sure that you can back up your claim that he collected "use tax" from you and did NOT report it on his Sales and Use Tax Return. Also, if he didn't report it then you are liable for it.......so beware of any "audits" you may stir up.

    As far as the dealer charging sales tax that you ALREADY paid to the State of Texas, that is WRONG. You already paid and are having the gun shipped to him for pickup and no further sales tax is due!!!!!

    MANY SERVICES are also taxable: http://window.state.tx.us/taxinfo/taxpubs/tx96_259.html
     
  10. lunchbox

    lunchbox Member

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    Apr 12, 2008
    they charge tax on the transfer fee
    that is a service provided by the FFL you pick the gun up from there must be tax on that fee whatever it is
     

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