paying taxes to a ffl for item from internet

[Mossyoak]

Well.... what about the dozens of dealers who don't charge tax? There is obviously some confusion as to the definition of "Agent".



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Agreed, FFL only documents transfer or ownership, has nothing to do with the sale. You pay who you bought it from and they provide you with a bill of sale not the FFL in MD. As far as comptroller is concerned, if you ask you should pay taxes on everything and anything that you buy out of state and bring back to MD.

 

[OEH]

Well.... what about the dozens of dealers who don't charge tax? There is obviously some confusion as to the definition of "Agent".



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follow me @DiscipleofJMB

There won't be any confusion if they get audited. They will be on the hook for all that tax. Lots of people cheat on taxes and hope that they won't get caught. Or, maybe they don't know that they are required to collect it and will get a rude awakening one day. "You pays your money and you takes your chances" as they say.

Agreed, FFL only documents transfer or ownership, has nothing to do with the sale. You pay who you bought it from and they provide you with a bill of sale not the FFL in MD. As far as comptroller is concerned, if you ask you should pay taxes on everything and anything that you buy out of state and bring back to MD.

Did you read the part in bold?

 

[pilotguy]

I sent an email to the Comptroller's office last Monday. This is the response I received today:

Mr. (OEH),

A firearm dealer located in Maryland that receives a legally purchased firearm from an out of state seller on behalf of a Maryland purchaser must charge the 6% Maryland sales and use tax on the selling price of the firearm to the Maryland purchaser. The instate dealer is an agent for the out of state seller and is responsible for collecting the tax on the selling price of the firearm. It is the responsibility of the instate dealer to obtain documentation of the retail purchase price from the out of state seller to correctly calculate the Maryland tax due. (Code of Maryland Regulation 03.06.01.27)

A separately stated charge to the buyer by the Maryland dealer for processing required paperwork or a background check is not subject tot he tax.

I have provided Regulation .27 below for your review.


03.06.01.27
.27 Auctioneers, Agents, Brokers and Factors.
Every factor, auctioneer, broker, or agent acting for any principal, or entrusted with possession of any bill of lading, custom house permit, or warehouse receipt for delivery of any tangible personal property or entrusted with possession of any personal property for the purpose of sale shall be responsible for the proper collection and remittance of the tax with respect to these sales, regardless of the fact that the principal or owner of the property being sold would not have been liable for collection of the tax if they had made the sale themselves.

Sincerely,
Daniel Riley
Deputy Director/Compliance Division
410-767-1556

I think that a bunch of you guys owe Mark an apology. You have basically called the man a thief without even the slightest effort to check the state mandates. I expected better.

Asking the Comptroller if tax should be collected is like asking Frosh if SB281 is constitutional. Of course they will say yes. You have asked for and received a non-legal opinion from someone who is interpreting the law as they wish. The reality is that the Comptroller's office is just like any other office--not everyone knows every law.

One of the reasons that I know specifically about the deficiencies of legal advice from the Comptroller's office is that the Comptroller's office tried to stick me with tax for interstate commerce--because my aircraft were flying from BWI to GED (in Delaware.) The Comptroller's office said that I was dropping off passengers out of state--simply because they exited the aircraft to refuel, go to the bathroom, etc. I didn't budge, and challenged them on it. A review by their legal department confirmed that I was not required to pay the tax.

As for section ".27", the crux is that an "Auctioneer, Agent, Broker, or Factor" has to have legal authority over the purchase for another--i.e. they could tell the out-of-state seller that the price is too high and return the firearm, without having to consulting the buyer. Think of it like power of attorney. You can get all of the correspondence from the Comptroller you want, but that still doesn't make it correct.

 

[smores]

There won't be any confusion if they get audited. They will be on the hook for all that tax. Lots of people cheat on taxes and hope that they won't get caught. Or, maybe they don't know that they are required to collect it and will get a rude awakening one day. "You pays your money and you takes your chances" as they say.

Did you read the part in bold?

Maybe this is a matter for a CPA or tax lawyer to weigh in on. I'm sure many dealers have consulted with such professionals in deciding their business practices.

If these dealers are doing transfers without collecting taxes, why is MSP approving their license renewals?

Having done dozens of transfers in two different states, I've only been charged tax once to my recollection (at AG&A).

So if one buys a C&R gun, does he or she need to pay tax? What about sneakers bought on eBay? What about anything purchased from another state where sales tax is not collected by the seller?

I agree that asking the Comptroller's office is about as smart as calling MSP to ask if a given gun is regulated.



Si vis pacem para bellum

follow me @DiscipleofJMB

 

[OEH]

Asking the Comptroller if tax should be collected is like asking Frosh if SB281 is constitutional. Of course they will say yes. You have asked for and received a non-legal opinion from someone who is interpreting the law as they wish. The reality is that the Comptroller's office is just like any other office--not everyone knows every law.

One of the reasons that I know specifically about the deficiencies of legal advice from the Comptroller's office is that the Comptroller's office tried to stick me with tax for interstate commerce--because my aircraft were flying from BWI to GED (in Delaware.) The Comptroller's office said that I was dropping off passengers out of state--simply because they exited the aircraft to refuel, go to the bathroom, etc. I didn't budge, and challenged them on it. A review by their legal department confirmed that I was not required to pay the tax.

As for section ".27", the crux is that an "Auctioneer, Agent, Broker, or Factor" has to have legal authority over the purchase for another--i.e. they could tell the out-of-state seller that the price is too high and return the firearm, without having to consulting the buyer. Think of it like power of attorney. You can get all of the correspondence from the Comptroller you want, but that still doesn't make it correct.

So I actually did some research, posted it, but it's still wrong because you say so... Gotcha. What about the part that said :"or entrusted with possession of any personal property for the purpose of sale shall be responsible for the proper collection and remittance of the tax"? Does that sound like what the receiving FFL does?

Maybe this is a matter for a CPA or tax lawyer to weigh in on. I'm sure many dealers have consulted with such professionals in deciding their business practices.

If these dealers are doing transfers without collecting taxes, why is MSP approving their license renewals?

Having done dozens of transfers in two different states, I've only been charged tax once to my recollection (at AG&A).

So if one buys a C&R gun, does he or she need to pay tax? What about sneakers bought on eBay? What about anything purchased from another state where sales tax is not collected by the seller?

I agree that asking the Comptroller's office is about as smart as calling MSP to ask if a given gun is regulated.



Si vis pacem para bellum

follow me @DiscipleofJMB

I doubt MSP cares about taxes until/unless a dealer is convicted of tax fraud. Not their job. As for the 'What abouts"... Look up "Casual Sale" in the MD tax code. They recently had a FAQ section that deals with out of state purchases and the "Sales and Use Tax" (the bold is a hint).

Re: asking the Comptroller about taxes - I own a business and have called to ask about what is and isn't taxable several times. Surprisingly I have been told that some things that appeared taxable were not. So, no, they don't always say that xyz is taxable.
Bottom line - If you think that the Comptroller is wrong put your money where your mouth is and file a lawsuit. The inferences that Mark is making stuff up and pocketing the sales tax are bull$hit and those that made them owe him an apology.

 

[ericoak]

"entrusted with possession of any personal property for the purpose of sale shall be responsible for the proper collection and remittance of the tax with respect to these sales"

Certainly sounds like what UPS does when I buy something online.

 

[Gunny1998]

Really?

Certainly sounds like what UPS does when I buy something online.

Except that UPS has no clue what's in the box or that you purchased what's in the box. Want them do tax you on your next birthday card from dear 'ol Mom?

Look guys, it's simple. AG&A has clearly stated their transfer fees and policy in the store and on their web site - as well as when a transfer is negotiated there. Hell, the owner even stated it here in this thread.

Don't like it? Don't agree with it? Then don't do transfers there.

Lastly, if you were charged tax and feel it was illegal to do so - contact a lawyer and get the issue settled with the State (and good luck with that).

Anything short of that is just internet chest thumping (who's right, who's wrong, what's right, what's wrong) and accomplishes nothing.

PS: for SMORES : I challenge you to call the MSP and ask them if an AR-10 (or copy) or Sig 716 is a regulated firearm. I think you'll be pleasantly surprised at the answer.
(here's a hint: M14, M1A and M21 are the only regulated .308 semi autos)

 

[ericoak]

Has nothing to do with what I want. If the controller is claiming that I want to know why UPS doesn't have to do the same. I don't see any exception for them.

Except that UPS has no clue what's in the box or that you purchased what's in the box. Want them do tax you on your next birthday card from dear 'ol Mom?

Look guys, it's simple. AG&A has clearly stated their transfer fees and policy in the store and on their web site - as well as when a transfer is negotiated there. Hell, the owner even stated it here in this thread.

Don't like it? Don't agree with it? Then don't do transfers there.

Lastly, if you were charged tax and feel it was illegal to do so - contact a lawyer and get the issue settled with the State (and good luck with that).

Anything short of that is just internet chest thumping (who's right, who's wrong, what's right, what's wrong) and accomplishes nothing.

PS: for SMORES : I challenge you to call the MSP and ask them if an AR-10 (or copy) or Sig 716 is a regulated firearm. I think you'll be pleasantly surprised at the answer.
(here's a hint: M14, M1A and M21 are the only regulated .308 semi autos)

 

[ericoak]

Wrong. FALs and HK-91/Cetme. There are also .308 caliber AKs.

Except that UPS has no clue what's in the box or that you purchased what's in the box. Want them do tax you on your next birthday card from dear 'ol Mom?

Look guys, it's simple. AG&A has clearly stated their transfer fees and policy in the store and on their web site - as well as when a transfer is negotiated there. Hell, the owner even stated it here in this thread.

Don't like it? Don't agree with it? Then don't do transfers there.

Lastly, if you were charged tax and feel it was illegal to do so - contact a lawyer and get the issue settled with the State (and good luck with that).

Anything short of that is just internet chest thumping (who's right, who's wrong, what's right, what's wrong) and accomplishes nothing.

PS: for SMORES : I challenge you to call the MSP and ask them if an AR-10 (or copy) or Sig 716 is a regulated firearm. I think you'll be pleasantly surprised at the answer.
(here's a hint: M14, M1A and M21 are the only regulated .308 semi autos)

 

[Mossyoak]

MD's tax is not exclusively "sales" it is "sales AND use"
Try buying a piece of heavy machinery out of state and using it in MD ... the Comptroller's Office WILL be there looking for their cut ... it is both "opinion" and LAW. Boaters know this by heart; everyone knows it doesn't work to buy a boat in DE or PA, register it there and use it in MD ... 190 days later, you will be getting the letter



You are correct, as of this year, tax is not collected on services. Wait until 2015 ... then it will be on everything except law & real estate ... and I'll be relocating.

If the FFL charged tax on the service ... I'd be at the Comptroller's Office the next day and the Comptroller's Office would be at the FFL the following day, and I'd look like this:

Actually I know a lot of folks who register their boats in DE an it works till you get stopped by DNR or they decide to check the marina where you keep you boat. Year back my one buddy got caught on this and had to pay. it was my understanding that Even if you live out of state but keep you boat in a marina in MD you are suppose to register it in MD

 

[iggy]

Has nothing to do with what I want. If the controller is claiming that I want to know why UPS doesn't have to do the same. I don't see any exception for them.

UPS and FEDEX dont act as your agent, they make deliveries. The FFL accepts your purchase, files paperwork for you, and collects a fee, then he holds your purchase until the MSP says you are allowed to have it. Thats a little more involved than dropping a package at your door.


As others have said, if you dont like AG&A's policy there are plenty of other places to go.

 

[kohburn]

entrusted with possession of any personal property for the purpose of sale shall be responsible for the proper collection and remittance of the tax with respect to these sales

little sticking point here

its one thing if the ffl shops around and finds a firearm from out of state for a customer

its another if a customer purchases a firearm out of state and has it mailed to the FFL to have them do transfer paperwork... the ffl is not a vender in this case and only storing the firearm while fascilitating paperwork.

I don't think that the comptroller would win in court - can't really fault anybody wanting to CYA though

 

[ericoak]

UPS and FEDEX dont act as your agent, they make deliveries. The FFL accepts your purchase, files paperwork for you, and collects a fee, then he holds your purchase until the MSP says you are allowed to have it. Thats a little more involved than dropping a package at your door.


As others have said, if you dont like AG&A's policy there are plenty of other places to go.

Really, I get charged a separate fee for shipping right on the receipt?

I don't see a single thing in there that specifies how involved they have to be. Clearly they were a paid agent acting on my behalf to deliver me my product from another state.

And I sign paperwork after they deliver the product completing the transcaction.

And I can do more than just go somewhere else, I can convince other people to do that also.

 

[CSS]

As others have said, if you dont like AG&A's policy there are plenty of other places to go.

Many people already have.

 

[Pushrod]

little sticking point here

its one thing if the ffl shops around and finds a firearm from out of state for a customer

its another if a customer purchases a firearm out of state and has it mailed to the FFL to have them do transfer paperwork... the ffl is not a vender in this case and only storing the firearm while fascilitating paperwork.

I don't think that the comptroller would win in court - can't really fault anybody wanting to CYA though

I was going to post the same thing. The tranferring FFL is not acting as an agent of sale. The purchase was done between the seller and the buyer only, the FFL had nothing to do with that. The comptroller is legally in the wrong, but Mark is correct in covering his @ss on this.

 

[swinokur]

The Comptroller wants your money. Did anyone expect him to rule otherwise? I would think a ruling from the AG is in order since they would be enforcing MD law. Maybe someone could ask their representative to request the AG for a legal opinion. I understand the AG will not issue an opinion requested by a private citizen. I'd expect the AG to rule the same way. MD wants your money. period.

 

[Gunny1998]

Wrong. FALs and HK-91/Cetme. There are also .308 caliber AKs.

OK .. I stand corrected - you're right, but only partially since the comment in parens wasn't the point.

Since you're obviously the type that has to be right - there, you have it.

 

[Gunny1998]

Has nothing to do with what I want. If the controller is claiming that I want to know why UPS doesn't have to do the same. I don't see any exception for them.

Wits. Unarmed person. Battle fruitless.

 

[Gunny1998]

And I can do more than just go somewhere else, I can convince other people to do that also.

... and that gets you what? The "Look How Cool and Powerful I Am In A Forum" badge?

You really can't just state your disagreement with a policy and leave it to other adults to make up their own minds? You have to convince them?

It worries me that mentality owns guns.

 

[iggy]

Really, I get charged a separate fee for shipping right on the receipt?

I don't see a single thing in there that specifies how involved they have to be. Clearly they were a paid agent acting on my behalf to deliver me my product from another state.

And I sign paperwork after they deliver the product completing the transcaction.

And I can do more than just go somewhere else, I can convince other people to do that also.

you dont pay ANYTHING directly to UPS or to FEDEX and other than delivery they dont do anything for you. An FFL does a lot, he charges you an additional fee you pay directly to him, and you cant do that kind of buisiness with out one. Its different.