Gun shows and sales tax

R

Roland Thunder

New member
I was trying to make a deal at a gun show today and the dealer and I were going back and forth. I wanted to give him my gun and $200 for the gun I wanted and he asked me if I could give him $250 and my gun to help defray the tax. Don't gun shows add tax to the cost of the gun? I didn't want to agree to give him $250 and then when I paid him find out there was tax added in in addition to me giving him $250.
 
In those states where sales tax is collected, it is collectible at gun shows. Some add it in, others do not - similar to gun sellers and gas stations where the price is "discounted for cash" or you pay an extra 3% for using a credit card. He wants to show a lower price than his competitor.
 
The state sales tax in Georgia is 4%, and counties may add to that. In some parts of the state, the total tax can be as high as 8%.

I'm sure the state bases the sales tax on the full sales price of the item. You didn't say what gun you were bargaining for, but let's say that without a trade-in it would retail for $800. That's the price the tax is based on. If there's no county tax, then the tax would be 4% of $800, or $32. If there's a county tax that brings the total tax to 6%, then the tax would be $48.

Basically, it sounds like the vendor is willing to give you $200 for your gun toward the one you want to buy, but he doesn't want to both give you that deal AND absorb the sales tax. I can understand that. The sales tax doesn't help him -- he is just an unwilling agent of the state in collecting it and passing it through to the revenuers. You need to understand that if the full sales price of the gun is $800, the vendor owes the state the full tax on $800, whether you pay it on top of the sales price, or he swallows it (thereby reducing his income by the amount of the tax), or the two of you agree to split the tax somehow.

Ask him what his best deal is if you agree to pay the tax. That's the way all deals are negotiated where I live -- everyone understands that the deal is the deal, and then the state sticks its hand into somebody's pocket for another bite.
 
It used to be common for dealers to "eat the tax" on sales if they buyer paid cash. Part of it was to defray credit card fees, and part of it was due to some dealers simply never recording the income.

It took awhile for me to realize that was what some seasoned buyers meant when they asked if they could pay a certain amount cash "out the door." Sorry. No can do.

Note to sellers: do not mess around on sales tax. I know one dealer who did so. He ended up with a $27,000 fine following an audit. He didn't have the money to pay it and ended up having to sell his business.
 
Back when I used to do gun shows about a hundred years or so ago, most of the "dealers" were just people buying and trading with no record keeping and no connection to any government agency. Some of them added sales tax onto their sales just to make another 8% or so on the sale. A legitimate dealer with an FFL or connections to buy wholesale and sell retail will have to pay the tax himself or pass it on to the consumer.
If the gov't gets interested and can establish a person is doing the shows on a regular basis buying and selling they can have a case to go after them to collect past sales tax that never got claimed.
In California I know of cases where they wanted to flex their muscle and set up people to establish that they were in a regular business as the law only allowed "occasional" sales to be tax exempt. Even garage sales fell into the same problems if conducted on a regular basis.
ATF cooperated with the state boys by setting up dealers. They would have a person sell the dealer a firearm and if it went back on the table for sale, they would have one of their people buy it back.....you were immediately marked as a dealer by legal standards if you were buying and selling. Once you were marked as a dealer, then the state comes in and goes after you for sales tax owed them.
 
The only dealers the consumer can generally haggle with are the smaller type. OTD (out the door) means just that, OTD. Talk of tax/fees is just a way of upping the amount. Todays registers/PCs can recalculate based on the dynamic OTD pricing.
 
If it's a dealer and you're filling out a 4473, you can expect to pay sales tax. If it's 'private sales' and no 4473, don't fall for the line, 'I need to add the tax', because he probably isn't paying it unless there is a state official standing there watching him collect your money. Ask to see a state business license or his EIN, something like that, first. And cash or not, demand a receipt with business name and address on it.
 
Gun shows and flea markets are the same,,,

Gun shows and flea markets are the same,,,
By law the seller is "supposed to" charge and report sales tax.

When my Pop and I were making driftwood furniture,,,
We sold at flea markets and craft fairs.

Most of them would supply us with a sales tax envelope,,,
We were supposed to fill it out and pay tax on our sales.

Rather than deal with adding sales tax to a price,,,
We simply had a sign that said,,,
Prices include sales tax.

If I sold a bench for $100.00 and the sales tax was 8.75%,,,
I recorded the sale as $91.95 and reported $8.05 tax.

People who shopped flea markets didn't like the extra tax amount,,,
They (like gun show customers) just want a total price quote.

To defer this when we went to a show,,,
Where the city enforced the collection of sales tax,,,
We just hiked our retail prices about 10% to cover our loss.

It's six of one and a half-dozen of the other,,,
But it kept our sales up and satisfied the tax man.

My LGS owner does this exact same thing,,,
His listed prices are all "out the door",,,
He breaks it down on the receipt.

A customer says, "Can you come down on that price a bit?",,,
His replay is, "That price includes sales tax."

Most of the time the customer is satisfied with that "discount",,,
It's a retail tactic that I've seen work in many venues.

Aarond

.
 
In Ohio you are not required to collect sales tax for a private sale. If you want to rent a table at the gun show, and sell your personal stuff you don't collect tax in the same way as if the buyer came to your home. Sales tax is collected and paid to the state via your vender's license. If you are a licensed vender, you are also a tax collector. States vary as to what point you are dealer and require a vender's license.

Licensed venders are typically tax exempt when purchasing inventory, which is why taxes are collected at point of sale.
 
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