FFL Collect sales tax on purchase or not?

[Mreed731 5]

I seem to be finding conflicting info on here about Sales Tax on internet purchases. I spoke with an FFL the other day who told me he would be collecting sales tax on the purchase if I do a transfer with him. He was very specific about it. I don't mind paying the tax, if that is what's required, but I have seen postings here that say otherwise.

[djg0770 481]

find another ffl

[PK90 3,570]

Tax is on the transfer fee only. Some charge tax on the NICS. Others add another processing fee.

[JT Custom Guns 957]

The transferring dealer (your FFL) is NOT selling you the gun. he is only transferring

the weapon from the shipper to you.

 

Some states have resiprocity with NJ and could (if they wanted to) charge Sales Tax at time

of sale, but this is unusual and never don from a private seller.

 

Your FFL should be charging you his transfer fee + NICS + tax NOT Sales Tax on the Sale of the Weapon.

 

JT

[NYMetsFan86 9]

The rifle itself was not purchased at that FFL so he has no obligation to charge any NJ tax. It sounds like your being penalized for not buying from him. However, he can charge you tax on transfer fees. NOT NICS. So......

 

he can tax you on a $35 transfer fee (for example), but it does not seem like sound business practice to charge people tax on a rifle they did not purchase from you.

 

 

 

edit: gentlemen above type faster than me and beat me to it

[djg0770 481]

if there is a law/statute saying that rifles coming into NJ are subject to tax, i'd like to see it. if not its added profit as the state would see none of it.

 

And if it's added profit, labelled to the buyer as TAX and the state doesn't receive the TAX, I believe that's illegal, though I am not a tax attorney or accountant.

[NYMetsFan86 9]

And if it's added profit, labelled to the buyer as TAX and the state doesn't receive the TAX, I believe that's illegal, though I am not a tax attorney or accountant.

 

nor am I but that sounds accurate

[Mreed731 5]

Interesting, this is what I thought, I dont know how you could charge tax on something you didnt sell and yes, it would be illegal to call a charge sales tax when it is not. Apparently he just opened business, maybe he is misinformed, I will try to tell him he should not be collecting tax and see what he says. He is local to me and new so I would like to give him the business if it's an honest mistake.

[NYMetsFan86 9]

just politely explain that if you wanted to pay tax you would have purchased the gun in NJ, But you would be more than happy to pay tax for the wonderful FFL transfer service he is offering....then find a new FFL, plenty of stellar ones on this site that should be within range of west deptford. 

[Mreed731 5]

I sent him an email, we'll see what happens

[MidwestPX 172]

AFAIK, only two states require FFLs to collect sales tax on the purchase price of guns they receive from out of state as part of the transfer process and those would be CA and WA.

[NYMetsFan86 9]

AFAIK, only two states require FFLs to collect sales tax on the purchase price of guns they receive from out of state as part of the transfer process and those would be CA and WA.

 

CA why am I not suprised they would be douschy like that

[njJoniGuy 2,131]

I sent him an email, we'll see what happens

I sure hope this isn't the new guy in Mantua, is it?

[Polak 3]

Theft! He is not supposed to charge tax on the item...only the NICS.

[Mreed731 5]

Yea, it is the new guy in Mantua, he replied that he contacted Division of Taxation and is waiting for an answer. I will give him the benefit of the doubt for now and wait for his answer

[mikeyboyeee 66]

He's full of shit.

 

Sent from my SAMSUNG-SGH-I537 using Tapatalk 2

 

 

[pjd832 146]

I would wait to pass judgement on this until his final response....I've been to his shop several times and have talked with him at length each time....he DOES NOT strike me as the type of guy he is being painted here...as a new to the industry guy he may not have come across this yet....and is doing the right thing and contacting someone to clarify what he needs to do to stay out of trouble.....

 

On a side note though...just because "xyz shop does/doesn't do......" Doesn't make it right or legal.. A certain recent thread on here comes to mind ...a nj ffl selling a tavor with factory flash hider(not pinned) installed and sent buyer on his way assuring him he was good to go....imagine what COULD have happened during an interaction with njsp/Leo/ATF/ etc and the buyer had he not done his due diligence .....just saying

[AS350Driver 56]

CA why am I not suprised they would be douschy like that

 

Happens in CA, then it won't be long until they try it here.

[Oakridgefirearms 224]

Happens in CA, then it won't be long until they try it here.

THIS^^^

 

Don't be surprised if the state seeks to start to doing this......but for now, it hasn't been addressed by the division of taxation in NJ.

 

 

I was reading on another forum about how WA started making FFL's collect tax on transfers a few years ago.

[HBecwithFn7 296]

THIS^^^

 

Don't be surprised if the state seeks to start to doing this......but for now, it hasn't been addressed by the division of taxation in NJ.

 

 

I was reading on another forum about how WA started making FFL's collect tax on transfers a few years ago.

 

I look at it this way... it's owed, whether the FFL collects it or not. Either they (FFL) do it, or the buyer *should* report it on their NJ 1040 as "use tax," as they should for any Internet or other "out of state" purchase. Do they always? Of course not. But, if the NJ Div. of Taxation were ever to audit, the buyer could be in some trouble.

 

Fortunately, for most buyers, it would cost the state way too much money to enforce the payment of use tax via the "individual audit" method for very little reward per each tax payer (unless that payer is being audited for other reasons). So they (NJ) resort to other means. Witness the recent "enticement" of Amazon to build two big warehouses in NJ in order to create "tax nexus" and, thus, require Amazon to collect tax for anything they "sell" to NJ residents. That was a major coup for the state. Now, watch for NJ to try and force Amazon to collect tax on "partner" sales (i.e. where the item is "sold" by the partner but "fulfilled" from an Amazon fulfillment center). Currently, if the partner doesn't have tax nexus, Amazon doesn't collect it. 

 

As for firearms and FFLs,  given NJ's Anti-gun mentality, I could see the Div of Taxation focusing audit efforts on the NJ FFLs, (i.e. the bigger NJ gun dealers) and requiring them to report all transfers where they didn't collect NJ tax. The state would then simply "audit" those buyers for "use tax" reporting.  I'm not sure the Div. of Taxation would even have to change any laws/policies.  Still not much revenue generated, but it would be a way to enforce the "anti-gun" mentality.

[ChrisJM981 924]

Purchaser is to pay the tax at the end of the year. Above poster is spot on with the NJ 1040. There is a specific question on there that asks about out of state purchases. If you only paid 6% in another state, NJ wants you to pay them the additional 1%. Iirc the only time you're going to pay the tax at the point of purchase is with an automobile. I'm sure someone (Ahem Troy )

[ChrisJM981 924]

Purchaser is to pay the tax at the end of the year. Above poster is spot on with the NJ 1040. There is a specific question on there that asks about out of state purchases. If you only paid 6% in another state, NJ wants you to pay them the additional 1%. Iirc the only time you're going to pay the tax at the point of purchase is with an automobile. I'm sure someone (Ahem Troy ) can clarify the car tax.

[NYMetsFan86 9]

Then let the customer claim the 1040 themselves at the end of the year. 

[raz-0 1,259]

Just an FYI. Ffls get told some pretty ambiguous stuff. They ask a tax question, and the tax folks don't grasp that they aren't actually selling the customer something because they don't know about gun laws. Ask the firearms guys questions and they don't know how taxes for a small business work.

 

When one if the FFLs I frequent was getting set up, we had a conversation about this very thing.

 

The guy in question can very likely simply be misinformed, attempting to double check things can lead to further confusion. The answer as of recent is that they do not collect sales tax and it should be reported on the 1040.

[Mreed731 5]

I spoke with him again on Friday and he said he was waiting for his accountant to get back to him. I agree with you and I don't believe that he is trying to get over on anyone. Unfortunately I had to go ahead and use someone else as I couldn't wait any longer.