User fee for out of state gun purchases through FFL?

My dad just went to pick up my gold cup from Marys today and on top of the FFL fee there was a "user fee" for out of state sales on guns. according to Dan it was Gregoires doing. Anybody know about this? any way it is costing me about an extra $150.....

Use Tax = Sales Tax

Washington is requiring FFL's to collect the USE tax for out of State Purchases. This is the Sales Tax that you would have paid had you purchased the gun at a local business and which you were supposed to remit to the state voluntarily (but no one does).


In an interstate transfer of firearms the Washington gun dealer is required to collect retail sales tax from the Washington resident on the purchase price of the firearm. The retail sales tax is collected from the Washington customer at the time the customer takes possession of the firearm. Sales tax is collected on the total selling price, including freight and/or delivery charges and other amounts added, such a an amount for insurance coverage.

If the selling price is not evident, it is up to the gun dealer to obtain this price by either requiring the purchaser to show the purchase price or to obtain that information from the out-of-state dealer. If, for whatever reason, the dealer is still unable to obtain the original purchase price, RCW 82.08.010 provides that the fair market value shall be used. It is the responsibility of the Washington gun dealer to determine the price in order to report and pay the sales tax due.

If the firearm is obtained by gift, the instate dealer is obligated to collect use tax on the fair market value of the firearm, unless the receiving person can document that the prior owner had paid retail sales or use tax on the firearm. RCW 82.12.020(3).

However, sales tax does not apply on the service charge for processing the required Federal and State forms and contacting the National Instant Criminal Background Check System (NICS) when the fee is stated separately from the selling price of the firearm and freight and/or delivery charges, insurance, etc.

Yep, and I watched the FFL fees at nearly every local gun dealer, AND the general prices for firearms jump up almost immediately after this was enacted.

Also a few FFLs shut down their transfer operations.

There are cheaper transfer fees, but the use tax will be the same.

WinchesterModel12 said:

There are cheaper transfer fees, but the use tax will be the same.

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This is going to close the price difference on a lot of guns, Internet vs Local purchase. Add back the "touch it, feel it, buy it, factor and local dealers are getting more back in the game. Also nice to have someone locally to deal with if there's a problem.

Only people I see "skating" on the tax going forward are those who have C&R FFL's but of course there all "upstanding citizens" and will definitely see that they pay the tax on their transactions, right?

Use tax is the same as sales tax, but is defined as not being sales tax since interstate sales tax is illegal.

In reality, though, it's sales tax by a different name, despite the 1930s opinion saying it's not.

Tax

amlevin said:

Only people I see "skating" on the tax going forward are those who have C&R FFL's but of course there all "upstanding citizens" and will definitely see that they pay the tax on their transactions, right?

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With regard to taxes, the total number of "handguns" sold in Washington in 2010 was 113,679. The Federal Excise Tax is at 10% for revolvers and pistols. !!! $$$

And Washington State collected the appropriate sales tax.

I figure the nominal price for a handgun is 500.00.

~Whitney

Tawnos said:

Use tax is the same as sales tax, but is defined as not being sales tax since interstate sales tax is illegal.

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How is it I still get charged WA sales tax any time I buy something online?

Metalhead47 said:

How is it I still get charged WA sales tax any time I buy something online?

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Because you are buying from someone that has a "brick and mortar" store in the state or an agreement with Washington to collect the tax.

There are lots of "Internet Only" companies that don't have to collect the tax. The downside is that should the State "catch" your not paying the tax they could collect what they say is due and also fine you.

amlevin said:

Because you are buying from someone that has a "brick and mortar" store in the state or an agreement with Washington to collect the tax.

There are lots of "Internet Only" companies that don't have to collect the tax. The downside is that should the State "catch" your not paying the tax they could collect what they say is due and also fine you.

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But if interstate sales tax is illegal as T says, how can they have such "agreements" with the state? Bought a video game online the other day & got charged sales tax as usual, even tho they have no B&M store and are not in washington.

Metalhead47 said:

But if interstate sales tax is illegal as T says, how can they have such "agreements" with the state? Bought a video game online the other day & got charged sales tax as usual, even tho they have no B&M store and are not in washington.

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Remember, it's not a Sales Tax, but a "Use Tax". Just because the rate happens to be the same doesn't make it a "Sales Tax". Taxing a user for bringing a product into the State, for use here, unfortunately is legal.

http://dor.wa.gov/docs/reports/2010/Tax_Reference_2010/08use.pdf

Legally, Washington residents owe use tax on items which were not subject to sales tax.
Examples include items purchased in other states and brought into Washington for use here,
purchases made via mail order and the Internet (even though the out-of-state seller cannot
be required to collect sales tax, the buyer still owes use tax), and items bought from persons
other than registered retail vendors, such as at garage sales.

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Again, the State has entered into voluntary agreements with many companies based in other states to collect this tax. None of the "biggies" like Cheaper Than Dirt, Brownells, Midway-USA, do so yet.

Metalhead47 said:

How is it I still get charged WA sales tax any time I buy something online?

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Are you sure? Can you list the retailers, and show me that none have an in-state presence?

Tawnos said:

Are you sure? Can you list the retailers, and show me that none have an in-state presence?

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Here is a link to WA's "rules":

http://dor.wa.gov/content/doingbusiness/businesstypes/industry/onlinesalesofgooods/default.aspx

As you read, they don't necessarily have to have a "presence" in WA to be required to collect Sales Tax, and also pay B&O tax as well.

An example might be if a "representative" of a business such as Midway-USA were to visit Gun Shows and promote their business. Midway doesn't have any location, payroll, or product in the State but by having a representative visit the state to promote their business they have established a "Nexus".

Another example would be a company like Optics Planet that sells from their vendors stock. If one of those vendors had product in Washington, and shipped it to a Washington Customer, tax is due even though the customer bought it from a Company that was located only in another state.

Moral is, never bend over because the State might be behind you waiting to pick your pocket.

Tawnos said:

Are you sure? Can you list the retailers, and show me that none have an in-state presence?

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direct2drive.com, off the top o me head. Charged me sales tax on 3 of my last 4 purchases. Part of IGN, which is based in (ugh) san fran, no offices listed in WA:

http://corp.ign.com/contact/

amlevin said:

Here is a link to WA's "rules":

http://dor.wa.gov/content/doingbusiness/businesstypes/industry/onlinesalesofgooods/default.aspx

As you read, they don't necessarily have to have a "presence" in WA to be required to collect Sales Tax, and also pay B&O tax as well.

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Yes, they have to have a presence, though that may simply be via sales representatives. That's the whole point of the definition of "a nexus" within WA.

That's a presence, a physical presence, of the company. Note that a retailer that sells over the internet but sends no representatives here would not be deemed as having created a nexus, though all of their products would have use tax due.

Metalhead47 said:

direct2drive.com, off the top o me head. Charged me sales tax on 3 of my last 4 purchases. Part of IGN, which is based in (ugh) san fran, no offices listed in WA:

http://corp.ign.com/contact/

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My guess, though I would have to go verify, is that they have a server farm located here.

It's going to get harder to avoid Sales Tax in WA

Here's some more on the subject:

http://dor.wa.gov/content/findtaxes...destinationbased/departmentstreamlinefaq.aspx

What are "remote sellers"?
Remote sellers are businesses that sell products to customers in a state, using the Internet, mail order, or telephone, without having a physical presence in that state. These sellers currently cannot be required to collect and remit sales tax as brick-and-mortar stores must do. The U.S. Supreme Court ruled in 1992 (Quill vs. North Dakota) that the burden of collection was too high given the number of taxing districts in the country and variations among states as to what was taxable and at what rate.

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At least the Court recognized that there would be a burden on the seller with the thousands of taxing districts allover the US.

Washington's petition for membership has been granted, enabling the state to become a member of the SSUTA on July 1, 2008, the effective date of the legislation. Washington will then have a seat on the Governing Board of the Agreement and will be able to vote on amendments to and interpretations of the SSUTA. From that point on, it will begin receiving sales taxes voluntarily collected by remote sellers.

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The collection of Sales Tax is "Voluntary". In some cases it may be not so voluntary as it would depend on what pressure is applied by the State where the remote seller is located. They may collect sales records and make them available to "member States" in the SSUTA. I certainly wouldn't put it past California to be doing so.

sempercarry said:

My dad just went to pick up my gold cup from Marys today and on top of the FFL fee there was a "user fee" for out of state sales on guns. according to Dan it was Gregoires doing. Anybody know about this? any way it is costing me about an extra $150.....

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Yup, they're slapping sales tax on out of state gun transfers.

This guy ended up paying an extra $40 on a gun just because I bought it from a guy who lived in Oregon. Thanks Gregoire, hope that latte you bought with my money tasted good.

killchain said:

Yup, they're slapping sales tax on out of state gun transfers.

This guy ended up paying an extra $40 on a gun just because I bought it from a guy who lived in Oregon. Thanks Gregoire, hope that latte you bought with my money tasted good.

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$40 for a Latte? Must have been this big: