Sales tax !!! ?

[fireball168]

The transaction as described above is not a drop shipment though.

From your link:


The FFL didn't buy the gun.

Again, I'm not arguing, merely repeating was has been explained to me - by folks that do this for a living.

The transaction in question has been explained as the "three party" sale as mentioned in the bulletin early in the bulletin.


Drop shipments involve the sale of goods by a seller who delivers the goods directly to the purchaser’s customer. However, this is generally not a three-party transaction, but two two-party transactions.

This is also the one that may cause problems for the "group buy" folks.

 

[Keepingmine]

I'd report him to the state.

You might also tell him you are going to let 23000 of your closest friends know what his business practices are.

That said, are you going to let us know who it is so none of us run into the same issue with the same person?

I wasn't sure of the rules appling to buisnesses on the forum.

But if it's ok to list him I have no prob telling you, I just don't want to get into any trouble on the forum.

And thanks for all the info guy's, I really don't have to extra money to pay the other $30 but like I said I told him I would pay him and I try to honor my word.

But I am going to confront him on this to see what he say's.

 

[DeadeyeChrista'sdad]

Methinks I smell a rat.

 

[BoilerWes]

Interestingly, a few years ago I was inquiring about a transfer to a gun shop owner in the Parker City area and was told I would have to be charged state sales tax for the transfer. I sort of just left it at that, so I am not sure if it was sales tax on the transfer itself or the actual purchase price? At the time, I was told that this had to be done because the IRS had been reviewing the books and that it was a violation/penalty to not. Turns out there were more problems than just the books...!!!

 

[hooky]

Again, I'm not arguing, merely repeating was has been explained to me - by folks that do this for a living.

The transaction in question has been explained as the "three party" sale as mentioned in the bulletin early in the bulletin.


Drop shipments involve the sale of goods by a seller who delivers the goods directly to the purchaser’s customer. However, this is generally not a three-party transaction, but two two-party transactions.

This is also the one that may cause problems for the "group buy" folks.

I'm not arguing either and hope you didn't take it that way. I was just pointing out that the FFL had no purchase of product, or sale of a product.

 

[MrsGungho]

I'm not arguing either and hope you didn't take it that way. I was just pointing out that the FFL had no purchase of product, or sale of a product.

correct

the only "income" the FFL is going to show on his books is the transfer fee. Transfer fees are a labor, therefore NON TAXABLE!!
He is not going to put $300 for the firearm on his books for taxes as his sale, he doesn't collect the $21 sales tax on it. He doesn't want to pay the federal and state tax on it at the end of his business year.
Records are kept on how much is brought into the shop. Sales tax is paid on taxable items only. You didn't pay him for the gun, he doesn't collect the sales tax. However as previously stated, it should be reflected on your own tax return that you need to pay the sales tax

 

[indybuell]

I'd call the Attorney General's office. He is illegally collecting sales tax.

 

[SMiller]

What a crook! I have done tons of FFL's, never this BS...

 

[marcweid]

As a small business owner (not gun related at all) we file a monthly sales tax report to the Indiana Dept. of Revenue and then pay accordingly. The only thing I could see him doing is actually reporting these sales, paying the sales taxes he collected from you and taking the cost of the guns which he never actually purchased out of of his cost of goods so his profits look much lower. There for his income tax would be way less. This would be really really stupid being that not only is it several types of fraud but I am sure since he is selling guns he is already under a more watchfull eye.

I know this is a common scam in the construction trades. Guys will actually buy a receipt off of other people so they can claim it as an expense. Quick example "Bob" makes $100,000.00 in profit roofing houses in a year. He then comes up with an extra $15,000.00 in receipts from "Bill". He then rights them off also and now only made $85,000.00 in profit. "Bob" may pay "Bill" $100.00 for reciepts but his income tax savings is thousands. Illegal as hell but really hard to prove. This is why my industry (I am not in roofing) is so corrupt and it is very hard to be honest when you compete against people like this. This is why I am all for a flat sales tax rate and no income, property, etc. taxes. There would be no way to scam and who cares if people want to try to work or hire under the table everything they buy would still get taxes paid on.

Sorry went way off subject but tax fraud really upsets me. Don't get me wrong I REALLY hate paying taxes but I do. I personally would ask him about how he reports these sales to the IN Dept of Rev and see if he get nervous.

 

[Win52C]

He's as crooked as a snakes hind end....IMHO...bet your $42 bought his dinner

 

[Keepingmine]

I'd report him to the state.

You might also tell him you are going to let 23000 of your closest friends know what his business practices are.

That said, are you going to let us know who it is so none of us run into the same issue with the same person?

Like I said I didn't know the rules but if it's ok to tell,

Its Flint Gun Shop up here by Angola, he made a big hoodoo about not making any money on the transfers becouse he had to keep records.

I won't be back.

Thanks alot ya'all for the info and advice, I really appreceate it.

 

[ryknoll3]

Thanks for warning us fellow INGO'ers so we don't end up in their trap. Blythe's in Griffith runs a similar scam, though their's supposedly covers "insurance", not sales tax.

 

[JTinIN]

By the letter of the law, does not really matter as either you pay the sale tax to the dealer doing the transfer or you ad the taxes to your Indiana State Income tax at the end of the year.

Third option is not paying taxes you legally owe. If one does not wish to pay taxes they owe, that is between them, the state and in theory everyone else who has to pick up the burden of missed taxes. Just because one can get away with it does not make it correct (i.e. one can also steal the from blind retire person ... but most don't as is more personal).

Will leave to a different thread the discussion on the state and feds taking too much in taxes, not using money wisely etc. etc. etc.

 

[CarmelHP]

Problem is that it's doubtful the dealer is paying that money to the state. He's most likely just pocketing it.

Correct. It's a scam. The tax is imposed on his gross sales. Your purchase was not part of his gross sales so he won't be paying tax, he was just beating you out of some cash.