How they got one over in WA State...

[Powderman]

Well, it started on July 1st, and it came so quietly that it flew under the radar.

Effective July 1st, if you have a firearm shipped to you in WA State, you will pay State sales tax. This tax varies according to local taxes, but will average around 8.5%.

What this means is illustrated by this example: If you order a firearm from a dealer out of State--or win one on Gunbroker--you will pay State tax in addition to the transfer fee the FFL charges.

"So," you say, "that means that I'll have a friend buy one, fire one round, then ship it through an FFL as a gift. Or, maybe they'll just ship it to me as a gift." Right?

Wrong.

The receiving FFL will have to STILL charge you the tax on the ESTIMATED RETAIL VALUE OF THE FIREARM.

Let me explain.

Say you have a friend in another State who wants to sell you a Barrett, in 6.8 SPC. That's about $2700 worth of rifle, without optics. It is a used gun, but your friend sells it to you for $1000, out the door--well below the book value of the rifle.

When the rifle arrives at the FFL, you will pay the tax on the estimated (Blue Book, I believe) value of the gun--not the amount you actually paid.

Two things have happened here...

One, by the stroke of a pen, Washington State has now almost stopped the importation of privately sold firearms. How so? I have found out that almost every store in my region--which includes the retailers, and the shops like the Marksman, Bullseye Shooter's Supply, Federal Way Discount Guns, Champion Arms and others have stopped accepting these transfers--because the paperwork and accounting is so difficult that the shops do NOT want to do it.

Two: This favors the big retailers, who have the buying power to keep a LOT of guns in stock--like Cabela's.

And no--I am NOT saying that Cabela's would be a party to such garbage. It's just interesting--and disheartening--to see.

If anyone knows of a shop or FFL that will still accept out of state transfers, let me know--please.

 

[44 AMP]

anyone else have any info on this?

 

[vranasaurus]

Does the tax just affect firearms or any products shipped or otherwise imported into the state? It seems to be a revnue generating move and therefore restricting it to firearms only would seem pretty dumb.

I know when I lived in Kentucky residents were supposed to report the total value of all things they bought from out of state on their state tax return and pay a 6% tax on it. I don't know how many people actually claimed the full amount if anything.

How does this kind of thing square with the interstate commerce clause? Is it ok as long as products purchased out of state aren't taxed at a higher rate?

 

[dogtown tom]

http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/firearmtransfers.aspx

Interstate transfers of firearms
Washington residents sometimes purchase firearms from out-of-state persons. Because of state and federal laws, a firearm purchased by a Washington resident must be sent from the out-of state person to a federally licensed gun store located in Washington State.

Once the Washington gun dealer has conducted the required background checks the dealer will transfer the firearm to the Washington resident.

The following information provides instructions for the taxability of such transfers.

Is the transfer of a firearm subject to tax?
In an interstate transfer of firearms the Washington gun dealer is required to collect use tax from the Washington resident on the purchase price of the firearm. Use tax is collected from the Washington customer at the time the customer takes possession of the firearm. Use 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 use 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, neither sales tax nor use tax applies 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.

How are these transactions reported on the Excise Tax Return?
When completing the Excise Tax Return the gross selling price of the firearm is reported under the use tax section of the tax return. B&O tax is not due in this case.

On a gifted firearm, the instate dealer is to report the transaction under the use tax section of the tax return. B&O tax is not due in this case.

The fee received (when separately stated on the purchase invoice) for the transfer service is reported under the service and other activities B&O tax classification. Sales tax is not collected on this transaction.

Applicable law
RCW 82.12.040(1) states:

Every person who maintains in this state a place of business or a stock of goods, or engages in business activities within this state, shall obtain from the department a certificate of registration, and shall, at the time of making sales of tangible personal property, extended warranties, or sales of any service defined as a retail sale in RCW 82.04.050 (2)(a) or (3)(a), or making transfers of either possession or title, or both, of tangible personal property for use in this state, collect from the purchasers or transferees the tax imposed under this chapter. The tax to be collected under this section shall be in an amount equal to the purchase price multiplied by the rate in effect for the retail sales tax under RCW 82.08.020. (Emphasis added).

 

[NavyLT]

anyone else have any info on this?

Does the tax just affect firearms or any products shipped or otherwise imported into the state? It seems to be a revnue generating move and therefore restricting it to firearms only would seem pretty dumb.

http://apps.leg.wa.gov/rcw/default.aspx?cite=82.12.020

RCW 82.12.020
Use tax imposed.


*** CHANGE IN 2010 *** (SEE 6143-S.SL) ***

(1) There is hereby levied and there shall be collected from every person in this state a tax or excise for the privilege of using within this state as a consumer any:

(a) Article of tangible personal property purchased at retail, or acquired by lease, gift, repossession, or bailment, or extracted or produced or manufactured by the person so using the same, or otherwise furnished to a person engaged in any business taxable under RCW 82.04.280 (2) or (7), including tangible personal property acquired at a casual or isolated sale, and including by-products used by the manufacturer thereof, except as otherwise provided in this chapter, irrespective of whether the article or similar articles are manufactured or are available for purchase within this state;

It is a use tax supposed to be collected on ANY tangible personal property brought into the state and is completely NOT specifically firearms related.

I love the wording - a tax on the "privilege" of using my own property! Somebody should take this one to the Supreme Court.

The tax does not apply to those items purchased upon which regular WA sales tax has already been paid:

(b) The tax imposed by this chapter does not apply:

(i) If the sale to, or the use by, the present user or his or her bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by his or her bailor or donor;

However, if you sell something at a yard sale, the new "user" is supposed to pay the tax for the "privilege" of using that item in this state.

 

[Sefner]

Sooo... what happened to the Commerce Clause? Doesn't only the Federal government have the power to regulate interstate commerce?

Also, what if I want to move to WA, do I have to pay taxes on all of the furniture for my house that I bring in? My DVD collection? Who is going to want to move to WA if this is true?

Since when do states grant you privileges to use things (like computers, tools, cars, etc) that you already own? When is the next WA election?

 

[ScottRiqui]

Also, what if I want to move to WA, do I have to pay taxes on all of the furniture for my house that I bring in? My DVD collection? Who is going to want to move to WA if this is true?

The tax doesn't apply to items you already owned before moving to Washington. It just applies to items you purchase while you're a Washington resident. Basically, the law is intended to address the issue of buyers avoiding state sales tax when buying online or ordering by mail. I don't think Washington is the only state to do this, either.

 

[NavyLT]

And... the law has been on the books for decades. It is rarely enforced at the individual person level. Most states actually have use tax laws.

 

[44 AMP]

Thanks dogtown for the info and the link.

However, it seems there is something in the interpretation that is not being clearly communicated. One dealer I spoke with about this has said they have not recieved any change to their operating guidelines, and they are doing business apparently completely opposite of the information guidelines posted on the link.

After looking at the referenced law, I think there is a good case for the way they are conducting business, and the "instructions" given may be in error, or be misleading. OF course, that would be for a court to determine, when a case finally gets there.

The dealer I spoke with explained that they charge sales tax on the $35 transfer fee. Not on the retail cost of the firearm. You buy the gun out of state, all they do is perform an instate service, for which tax is charged. If you buy from Cabelas, (for ex.) you pay sales tax on the purchase price, because they have a business outlet in WA, even if the firearm is shipped in from another state on Cabelas FFL. IF you buy from Joe Smith in KY (who does not have a business outlet in WA), and he has his local FFL ship to yours (following Fed law), you do not pay sales tax on the purchase price, only on the price of the FFL transfer fee.

It could be that the dealer I talked to has not yet been made aware of the change to the law, or it could be they are correct under the law as it currently stands. I don't know, but this has the potential to be quite a can of worms.

I do know that WA tried to do something similar with cars, and part of that law got shot down (the part about them charging tax on "book" value, when a bill of sale said the price was something else). However, WA requires registration of cars (for use on public roads), but does not require registration of guns.

This deserves further investigation.

 

[NavyLT]

You will find that several state agencies in Washington are know to overstep their bounds. This does not surprise me by the Department of Revenue. Another one is the Department of Licensing. The DOL was forcing dealers to complete a Pistol Transfer Form for cap and ball revolvers, thus imposing the waiting period and local background check requirements on those sales (and registering those replicas like they do handguns). Even though the statute (RCW 9.41.090) says:
(7) This section does not apply to sales to licensed dealers for resale or to the sale of antique firearms.

and RCW 9.41.010:
(1) "Antique firearm" means a firearm or replica of a firearm not designed or redesigned for using rim fire or conventional center fire ignition with fixed ammunition....

I wrote to state senators and reps and asked them why the DOL was wasting resources with the required forms (and, BTW, this is why you can't mail order replicas to be sent to you in WA) for items that were exempt. They came down on the DOL and the DOL sent me a memo that they "sent to all WA FFLs" which stated the form and waiting period were not required. And yet, when I talked to multiple FFLs after that, none had received the memo!

Some of the state agencies are out of control in WA.

 

[alienbogey]

I found out about this craptastick law when I recently took delivery of a pistol shipped from out of state to my FFL. Yes, the WA revenuers had been after him and, yes, he was forced to collect sales tax from me on the pistol. It happened to a friend of mine five days ago at a different FFL.

Regardless of whether its legal or not they're doing it to us.

 

[gc70]

Although it has been tried, a state does not have the authority to force businesses or individuals in other states to collect sales taxes on out-of-state sales. Frustrated by the loss of that revenue, many states have "use" taxes on items that are acquired outside the state and not subject to the state's sales tax.

The insidious thing about the use tax and firearms is that there is a convenient point (the transferring FFL) for both identifying the imported product and collecting the tax. The same holds true for vehicles; many states collect use taxes on vehicles when they are first registered and licensed in a state.

 

[Gary L. Griffiths]

I do know that WA tried to do something similar with cars, and part of that law got shot down (the part about them charging tax on "book" value, when a bill of sale said the price was something else).

WA state does love it's taxes. Reminds me of the time back in '77 when I traded my Volvo for a Ford Granada in Washington. Because I was military, and an Iowa resident, I registered it in Iowa, so paid sales tax on the $560 difference I paid for the new car. THEN Iowa started collecting income tax for service members, so I transferred my residence to Washington. When I registered the car, they tried for a couple of hours to figure out how they could charge me tax, not on the difference I paid, but on the original sticker price of the car! :barf: Since I had paid tax in another state on the purchase, they couldn't do it, but their panties were definitely in a wad when they finally issued me my registration!

 

[WeedWacker]

However, WA requires registration of cars (for use on public roads), but does not require registration of guns.

I seem to remember having to fill out a pistol registration permit for each handgun I bought as a WA resident. I can buy a long gun in Lewiston, ID and no FFL is required if I use certain retailers and I don't pay the WA sales tax. But if it's a handgun it has to be shipped to an FFL on WA side and I fill out a form 4473 and the pistol license form and show my CHL so I don't have to wait 5 days.

 

[44 AMP]

While I do recall filling out a WA state form several years ago (in addition to the Fed 4473), i have bought several handguns from FFL dealers in recent years and filled out nothing but the Fed 4473.

I think the WA state form has been dropped.

 

[NavyLT]

I think the WA state form has been dropped.

The WA state pistol form is still required when buying pistols from FFLs AND the Department of Licensing uses them to register the owner's of said pistols tying the pistol's serial number to the name of the owner, the DL number of the owner, AND the CPL number of the owner (if the owner has a CPL). The form is required by law to be completed at the time of purchase - before the 5 day wait for non-CPL holders and is also the basis for the state police background check.

The form is not required for private sales, but is available for use voluntarily so that the DOL may also register pistols sold in private sales.

http://apps.leg.wa.gov/rcw/default.aspx?cite=9.41.090

RCW 9.41.090
Dealer deliveries regulated — Hold on delivery.


(1) In addition to the other requirements of this chapter, no dealer may deliver a pistol to the purchaser thereof until:

(a) The purchaser produces a valid concealed pistol license and the dealer has recorded the purchaser's name, license number, and issuing agency, such record to be made in triplicate and processed as provided in subsection (5) of this section. For purposes of this subsection (1)(a), a "valid concealed pistol license" does not include a temporary emergency license, and does not include any license issued before July 1, 1996, unless the issuing agency conducted a records search for disqualifying crimes under RCW 9.41.070 at the time of issuance;

(b) The dealer is notified in writing by the chief of police or the sheriff of the jurisdiction in which the purchaser resides that the purchaser is eligible to possess a pistol under RCW 9.41.040 and that the application to purchase is approved by the chief of police or sheriff; or

(c) Five business days, meaning days on which state offices are open, have elapsed from the time of receipt of the application for the purchase thereof as provided herein by the chief of police or sheriff designated in subsection (5) of this section, and, when delivered, the pistol shall be securely wrapped and shall be unloaded. However, if the purchaser does not have a valid permanent Washington driver's license or state identification card or has not been a resident of the state for the previous consecutive ninety days, the waiting period under this subsection (1)(c) shall be up to sixty days.

(2)(a) Except as provided in (b) of this subsection, in determining whether the purchaser meets the requirements of RCW 9.41.040, the chief of police or sheriff, or the designee of either, shall check with the national crime information center, the Washington state patrol electronic database, the department of social and health services electronic database, and with other agencies or resources as appropriate, to determine whether the applicant is ineligible under RCW 9.41.040 to possess a firearm.

(b) Once the system is established, a dealer shall use the state system and national instant criminal background check system, provided for by the Brady Handgun Violence Prevention Act (18 U.S.C. Sec. 921 et seq.), to make criminal background checks of applicants to purchase firearms. However, a chief of police or sheriff, or a designee of either, shall continue to check the department of social and health services' electronic database and with other agencies or resources as appropriate, to determine whether applicants are ineligible under RCW 9.41.040 to possess a firearm.


(5) At the time of applying for the purchase of a pistol, the purchaser shall sign in triplicate and deliver to the dealer an application containing his or her full name, residential address, date and place of birth, race, and gender; the date and hour of the application; the applicant's driver's license number or state identification card number; a description of the pistol including the make, model, caliber and manufacturer's number if available at the time of applying for the purchase of a pistol. If the manufacturer's number is not available, the application may be processed, but delivery of the pistol to the purchaser may not occur unless the manufacturer's number is recorded on the application by the dealer and transmitted to the chief of police of the municipality or the sheriff of the county in which the purchaser resides; and a statement that the purchaser is eligible to possess a pistol under RCW 9.41.040.

and this is the Department of Licensing's registration:

http://apps.leg.wa.gov/rcw/default.aspx?cite=9.41.129

RCW 9.41.129
Recordkeeping requirements.

The department of licensing may keep copies or records of applications for concealed pistol licenses provided for in RCW 9.41.070, copies or records of applications for alien firearm licenses, copies or records of applications to purchase pistols provided for in RCW 9.41.090, and copies or records of pistol transfers provided for in RCW 9.41.110. The copies and records shall not be disclosed except as provided in RCW 42.56.240(4).

Here is the voluntary registration form:

http://www.dol.wa.gov/forms/652004.pdf

With all the whining about the state budget shortfalls and deficit, it makes me :barf: to think about the money and resources they are wasting on the this crap. I'll bet they cannot point to one single crime that has been solved with it.