Does the new 11% "sin tax" apply to private sales?

[treelogger]

If Alice sells a gun to Bob in a PPT (with the transfer happening at an FFL), does the 11% "sin tax" need to be paid? How about the ~9% sales tax? I know that California FFLs are supposed to collect sales tax on guns shipped from out of state (with some exceptions and offsets), how about on private sales?

Same question also applies to ammo sales. Here there is another little twist: While usually private ammo sales have to be performed at an FFL (for the background check), that is not needed if the buyer has CoE and 03FFL. In that case, I'm sure neither sales tax nor 11% sin tax will be collected ... but should it be? I sort of know the rules for a private party selling things (for example at yard sales and flea markets), and in many cases the sellers are supposed to collect sales tax and send it to the state (few do though).

 

[acuracing]

For PPT's there are no taxes involved. Heck, FFL's don't even know (or shouldn't care) how much was spent as it's not requested or required. The sale amount is simply between the buyer and seller.

Sorry I can't answer the ammo piece as I've never done an ammo transfer between private parties.

 

[Sharpe]

While you don't have to pay a "sin tax" nor sales tax to facilitate a PPT, expect a mild inflation to off-roster handgun prices. The "sin tax" is trickle down economics: Bob won't remit the "sin tax" to the FFL at the time of the PPT, but Alice (and most likely other buyers) will include the +11% amount in her sales price.

This so-called "sin tax" disproportionately favors those with disposable income. That $4,000 Staccato C2 today is $4,440 on July 1. This is another attempt by the CA legislature to relegate you to the roster while litigation continues.

I've conducted several ammo transfers at various FFLs; most assess a $10-20 fee, and the buyer is responsible for the $1 background check. As far as I know, the enacted statute does not impose further taxation here.

 

[jjsmillie89]

The FFL who process the PPT won't know the transaction price, nor do they care or want to know, that is between buyer/seller. However, the new bulletin from the Tax Collecting Agency today says FFL "transfer fee" is subject to 11% new tax, does the PPT fee fall under this category?

 

[Sharpe]

The FFL who process the PPT won't know the transaction price, nor do they care or want to know, that is between buyer/seller. However, the new bulletin from the Tax Collecting Agency today says FFL "transfer fee" is subject to 11% new tax, does the PPT fee fall under this category?

Can you share the bulletin here or PM?

 

[jjsmillie89]

Can you share the bulletin here or PM?

https://i.redd.it/ygoqp8vz5z9d1.jpeg

 

[pikachu]

PPTs have no taxes involved; it’s just whatever cash you hand the seller. This makes buying used way cheaper than buying new, doubly so now that AB28 is in effect.

Off roster PPT premiums don’t seem so bad if you save ~20% on tax lol. You have to pay the additional 11% tax on consignment though, which makes off roster consignment extra inaccessible.

 

[cal.bar]

PPTs have no taxes involved; it’s just whatever cash you hand the seller. This makes buying used way cheaper than buying new, doubly so now that AB28 is in effect.

Off roster PPT premiums don’t seem so bad if you save ~20% on tax lol. You have to pay the additional 11% tax on consignment though, which makes off roster consignment extra inaccessible.

Ah yes, but... it is important to distinguish the " in person" PPT where two people walk into the store to do the deal and one returns 10 days later and "consignment" sales wherein the FFL puts the firearm on his books and then acts as the seller of the firearm at some point down the line to an as of yet unknown buyer. THAT is not a PPT and not exempt from the sales tax.

 

[Sal0327]

I was told once long ago, "as longest the cash transaction is not inside the store, no taxes apply". Not sure how much of that is true. I always paid discreetly in the parking lot either before or after dros.

 

[Radman64]

Strange question to ask as there has never been a tax on PPT's, I have no clue about anything off register. The ammo issue is a pure joke imo and just a way for the State to gain revenue is all, criminals are not coming here looking for good deals.

 

[SomeOne]

I was told once long ago, "as longest the cash transaction is not inside the store, no taxes apply". Not sure how much of that is true. I always paid discreetly in the parking lot either before or after dros.

It's not accurate. Even if the cash transaction is conducted inside the store by two individuals, it's not taxable. The tax only comes into play, if it's a sale by the business. Other situations apply for interstate transfer, etc. However face to face PPT is not taxable.

 

[Dvrjon]

https://i.redd.it/ygoqp8vz5z9d1.jpeg

The bulletin answers the basic question:

…11 percent of the gross receipts from the retail sale (sales to consumers)…including transfer fees…

A PPT is not a retail sale and there are no gross receipts from it. Since it isn’t a retail sale, the transfer fee shouldn’t be taxed.

The tax guide differentiates between PPT and Consignment:

Consignment Sales​

(https://www.cdtfa.ca.gov/industry/s...quently-asked-questions.htm#Consignment-Sales)​

• No. When a private party seller (consignor) brings a firearm to a CFD and requests that the CFD find a buyer, the CFD is considered the retailer (consignee) of the firearm and is liable for sales tax and the CFET on the sale of the firearm.
• For more information on consignment sales, view our publication 114, Consignment Sales.

 

[Dvrjon]

To the specific issue of PPTs: (https://www.cdtfa.ca.gov/industry/s...ucts/industry-topics.htm#Private-Party-Seller)

Registering a Firearm from a California Private Party Seller​

When a California private party seller brings a firearm to a CFD and requests that they find a buyer, the CFD is considered the consignee and retailer of the firearm and is liable for the sales tax and the CFET on the subsequent sale of the firearm.

However, when a CFD completes the registration paperwork for a California private party who is selling a firearm to a California purchaser and the seller and purchaser have negotiated the terms of sale in advance, and then bring the firearm to the CFD to meet the statutory requirements for the documentation and registration of the transfer, the CFD is not considered to be the retailer of the firearm and will not be responsible for the sales and use tax or the CFET, provided the CFD does not take title of the firearm at any time during the transaction. The private party seller would be liable for the sales tax unless the transaction qualifies for an exemption. For example, the sale of a firearm between California private parties may be exempt from sales tax if the sale meets the provisions of an exempt occasional sale as provided in Regulation 1595, Occasional Sales–Sale of a Business–Business Reorganization.

 

[Pew!]

It's just a private party TRANSACTION, not necessarily a sale. A PPT sometimes is even swap for goods not involving any exchange of funds, or perhaps even a gift.

 

[Tere_Hanges]

PPT, no. Consignment, yes. Dealer transfer, yes.

 

[The Gleam]

Instead of calling it a 'sin tax', as that plays into how the NeoSocialists see firearms and the 2nd Amendment, I prefer to call it a 'Spite Tax'.

Because that's all it was. It has no merit. It was a hostile, biased, spiteful attack on our civil rights because the tyrants are against the very thing that keeps them in check. Funds were not needed for their quiver of supposed pet causes and they already enjoyed a significant surplus of funds taken in from DROS fees for the past 20 years, as former Governor Brown revealed. The pet cause for this 'Spite Tax' was the elitists looking to discourage gun ownership by the groundlings.

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[JamMan1213]

I was told once long ago, "as longest the cash transaction is not inside the store, no taxes apply". Not sure how much of that is true. I always paid discreetly in the parking lot either before or after dros.

I’ve done four of these PPT’s recently and paid or exchanged cash while in the FFL and no one at the FFL cared or even took notice
No mention of taxes at all of any kind