Gun Broker and Sales Taxes?

U

USAF Ret

New member
Those using Gun Broker for private sales, please help.

I just received a sales tax bill for $106 for a private sale of two firearms in which I am the seller. This makes no sense to me whatsoever. I am not a business person, so if I am just ignorant on this please let me know.

Thank you.
 
USAF Ret said:
I am not sure if this is the correct place to post. So, those using Gun Broker for private sales, please help.

I just received a sales tax bill for $106 for a private sale of two firearms in which I am the seller. This makes no sense to me whatsoever. I am not a business person, so if I am just ignorant on this please let me know.

Thank you.
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Eastbank isn't wrong, a buyer may pay the sales tax, but vendors may be liable for collecting it.

My state has or had a line on state income tax returns for any out of state purchases one had made but not paid Ohio sales tax. I've seen vehicle transfers within families in which the state sends a tax bill to the transferee because the state doesn't believe the recorded purchase price and wants the difference.

I'm guessing this bill is from GB itself? You probably agreed to this charge in the GB user agreement, amongst all sorts of other awful things.
 
buyer pays the tax./
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But the seller is responsible for remitting the tax to the state. I have no idea what GB's terms are; but I'm guessing they are functioning as a "proxy" retail vendor in your place and therefore legally are obligated to your state to collect and remit sales tax if you are not doing it yourself.
 
zukiphile said:
Eastbank isn't wrong, a buyer may pay the sales tax, but vendors may be liable for collecting it.

My state has or had a line on state income tax returns for any out of state purchases one had made but not paid Ohio sales tax. I've seen vehicle transfers within families in which the state sends a tax bill to the transferee because the state doesn't believe the recorded purchase price and wants the difference.

I'm guessing this bill is from GB itself? You probably agreed to this charge in the GB user agreement, amongst all sorts of other awful things.
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Yeah, I took a whipping but still probably came out better than doing a trade. Luckily, I only have one more firearm to sell and it should be an easy one. Selling to my LGS.
 
As a buyer, I have always wondered how this worked. If I win the item, gunbroker sends me an invoice for the sales price+ fees?+ state sales tax and shipping. I send that total to the seller. The tax doesn’t come out of the sellers price, it is added to it. So you aren’t making less than the sales price. I was then assuming gunbroker bills the seller for their fee and the sales tax, that I paid, and they, GB, remits the taxes to the state. Other than GB’s fee (commission) you aren’t getting anything deducted from your sales price.
USAF Ret: the buyer paid the sales tax and sent it to you, along with the shipping cost and GB fees. You didn’t get less than your sales price for the gun. You should have an itemized invoice from the sale that shows this, and your GB billing should be itemized to reflect that too. But I do wonder if GB is really paying the taxes or just keeping the money. I’m suspicious about this from all online companies collecting sales tax.
 
I bought a few in the past. The FFL on my end was my friend (he passed away). He collected sale tax if the seller was a business. No tax for private sales.

-TL

Sent from my SM-N960U using Tapatalk
 
The seller is generally responsible for collecting the sales tax from the buyer. The buyer is always responsible for paying the sales tax.

States frequently have a rule about what is called "use tax" which is just another term for "sales tax." What that means is that if the seller doesn't collect the sales tax from the buyer, then the buyer is responsible for remitting the sales tax directly to the state taxing agency.

Of course, very few (if any) people actually do this.

--Wag--
 
“I bought a few in the past.”
GB policies have changed since then, their current policies are what I described above. Amazon and other internet marketplaces have started charging state sales tax because the state treasuries started to realize how much money they were losing from online purchases, and started making leagal threats.
 
44caliberkid said:
“I bought a few in the past.”
GB policies have changed since then, their current policies are what I described above. Amazon and other internet marketplaces have started charging state sales tax because the state treasuries started to realize how much money they were losing from online purchases, and started making leagal threats.
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The FFL collected sale tax for the state. He just didn't need to do that for private sales. Perhaps new rules apply now.

-TL

Sent from my SM-N960U using Tapatalk
 
A few years ago the laws were changed for internet sales because the states were complaining that on-line purchasing was decimating their sales tax base. This is why pretty much all internet sites now change sales tax, based on the location of the buyer.

I don't remember how Gunbroker does it but the way 4caliberkid described it is the way it should work. The sales tax should not come out of the bid price, it should be added onto that -- as a tax.
 
At the end of the auction the buyer would have received an invoice for the winning bid amount plus the 1% compliance fee plus sales tax for his local address plus the shipping cost. This total is what the buyer sends to the seller.

Gunbroker then invoices the seller for the final value fee plus the sales tax and 1% compliance fee the seller collected from the buyer. This total is what the seller pays Gunbroker.

Jim
 
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In Washington state, the receiving FFL collects the tax; at least, that's the way it worked the last time I bought on gunbroker.
The FFL is an uncompensated state employee; is that even legal?
 
RickB said:
In Washington state, the receiving FFL collects the tax; at least, that's the way it worked the last time I bought on gunbroker.
The FFL is an uncompensated state employee; is that even legal?
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If it's required by a law, it is by definition legal -- unless and until a court of competent jurisdiction rules that it's NOT legal. That doesn't make the FFL an "uncompensated state employee."

If gun shops collect sales tax in Washington state, I assume stores such as Walmart and Cabelas also collect state sales tax. Are you arguing that the cashiers in those stores are uncompensated state employees? It's just part of the cost of doing business, and an FFL can recoup the value of his time as part of his transfer fee.
 
OK, this is a good question. When I (a licensed dealer in WA) ship a firearm to someone in another state, I include an invoice that shows I did not collect sales taxes because I am not an agent of the receiving state's department of revenue. The receiving/transferring dealer in the other state is responsible for collecting the tax from the buyer according to that state's laws.
 
Generally speaking, if you process the payment yourself, i.e. receive check/money order, process a credit card, etc. and the money does not go to an intermediary, then you are supposed to remit sales tax to the state where the item went. Ebay and Amazon process payments for the seller, and thus collect sales tax from the buyer separately and no longer directly involve the seller in the process.

Larger businesses will have a built-in system to remit sales tax. As a small time seller, you're SUPPOSED TO remit sales tax, but I doubt many do since it becomes a big PITA. For trouble to happen, the state the item was sent to would have to A) know about the transaction and B) care enough to enforce tax compliance.

This is the biggest reason the whole internet sales tax is a whole mess. Nothing is uniform and you almost have to become an accountant to follow all the differing laws. A uniform flat tax would have solved many of these issues.
 
Gunbroker is a 'Marketplace Facilitator', or, under some states' definitions, a "Nexus". Except for a few outlying states, THEY are responsible for collecting and remitting sales tax to the state.
However, if you use a form of payment outside of Gunbroker, they cannot directly collect and remit that tax. So they will send you a bill, because YOU are responsible for collecting the tax on Gunbroker's behalf and paying them so that they may remit it to the state.


The only people that have problems with GB and tax collection/payment are generally people that only accept certified checks and/or money orders for payment.
Sellers accepting credit cards "offline" are generally doing enough business to know that they have to collect and forward the sales tax to GB.
 
The big takeaway here is that if Gunbroker handles your money, they will likely handle the sales tax stuff. If you collect money yourself without Gunbroker getting involved, you have to deal with it.
 
Scorch OK, this is a good question. When I (a licensed dealer in WA) ship a firearm to someone in another state, I include an invoice that shows I did not collect sales taxes because I am not an agent of the receiving state's department of revenue. The receiving/transferring dealer in the other state is responsible for collecting the tax from the buyer according to that state's laws.
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Uh, no.
You are making an erroneous assumption.

You need to read each states sales tax policy to see if you are responsible for collecting and remitting that sales tax to the buyers state.

In Texas, its required that the out of state seller collect the sales tax and remit to the state comptroller.
See: https://comptroller.texas.gov/taxes/sales/remote-sellers.php
 
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