Sales Tax

[troda]

I just bought a complete lower receiver from NH. Transfered in to Mass FFL.
Do I have to pay sale tax on receiver.

 

[mikem317]

I never paid tax on my transfers.

 

[JonJ]

Some FFLs do require sales tax.

 

[sportycliff]

Ritchie at Ritchie's in Wesport recently told me it came down from above...charge all transfers MA sales tax...

 

[kevin9]

Ritchie at Ritchie's in Wesport recently told me it came down from above...charge all transfers MA sales tax...

Well that's the definitive word; "above".

Actually it wouldn't surprise me if the revenue department is searching for every source at this time.

 

[doobie]

If you don't pay MA tax at the FFL, you have to report it on your end of the year taxes. They are nice enough to provide you a box to fill in how much you spent on our of state merchandise.

 

[bostonasphalt2]

If you don't pay MA tax at the FFL, you have to report it on your end of the year taxes. They are nice enough to provide you a box to fill in how much you spent on our of state merchandise.

That number is always magically zero!

 

[Len-2A Training]

Some FFLs do require sales tax.

Paying on the transfer fee is illegal, violates MGL on sales tax as there is no sales tax (yet) on "labor". I've had a jerk in DOR once tell me to charge sales tax on labor . . . still didn't make it legal to do so.

Tax on cost of a product is valid, but the MA FFL accepting a gun for you shouldn't know what you paid for it (you paid out of state dealer/person) and thus has no legal basis to charge the sale tax. [You might have paid $300 for a gun and the dealer says "it's worth $500, so I'm charging you $25 sales tax + transfer fee".] I'd be real leery of any dealer who did this, I would suspect that they were pocketing the "tax" money as extra profit.

It is up to the buyer to pay "use tax" directly to the state for any out of state purchases.

 

[Knob Creek]

Ritchie at Ritchie's in Wesport recently told me it came down from above...charge all transfers MA sales tax...

And yet another reason to use another dealer. Ritchie also claims that the Massachusetts State Police are in Parking Lots at gun dealers in New Hampshire taking down plate numbers. Then stopping people when they return to Mass and seizing their ammunition and imposing a $2000.00 fine for illegal interstate transportation of ammunition.

 

[the_doctor]

I just bought a complete lower receiver from NH. Transfered in to Mass FFL.
Do I have to pay sale tax on receiver.

Here we go again!

Yes, you must pay 5% tax to the Commonwealth. The tax is due under MGL 64I.

You may include it on your Form 1 or file a Personal Use Tax Return.

 

[the_doctor]

Well that's the definitive word; "above".

Actually it wouldn't surprise me if the revenue department is searching for every source at this time.

For you wonderful GOAL supporters, GOAL actually checked the LAW. They published a narrative in one issue of the paper, which actually says that Ritchie's is properly collecting the sales tax.

 

[the_doctor]

Paying on the transfer fee is illegal, violates MGL on sales tax as there is no sales tax (yet) on "labor". I've had a jerk in DOR once tell me to charge sales tax on labor . . . still didn't make it legal to do so.

Tax on cost of a product is valid, but the MA FFL accepting a gun for you shouldn't know what you paid for it (you paid out of state dealer/person) and thus has no legal basis to charge the sale tax. [You might have paid $300 for a gun and the dealer says "it's worth $500, so I'm charging you $25 sales tax + transfer fee".] I'd be real leery of any dealer who did this, I would suspect that they were pocketing the "tax" money as extra profit.

It is up to the buyer to pay "use tax" directly to the state for any out of state purchases.

Len,

You are wrong as usual. Sales tax should be charged on the transfer of the item PLUS the transfer fee. Handling fees are incorporated into the price.

Read the actual statutes.

You are like the guy that I saw at the gun show. He was complaining about his tax problems. I asked him if he had an accountant. He told me that he had an EA. Whom obviously had set the guy up completely backwards.

If you take your gun to a proper gunsmith, then why would you not talk to an actual accountant such as a CPA. Why post trivial nonsense on a forum?

You have just accused an individual of theft without any basis. Some of your previous posts have indicated that you DO NOT UNDERSTAND how to fill out a ST-9, either.

bill

 

[BOBKATT]

And yet another reason to use another dealer. Ritchie also claims that the Massachusetts State Police are in Parking Lots at gun dealers in New Hampshire taking down plate numbers. Then stopping people when they return to Mass and seizing their ammunition and imposing a $2000.00 fine for illegal interstate transportation of ammunition.

I've heard similar from Richie. What a guy.....

 

[Len-2A Training]

After reading "The Doctor" attack on my old post, I tried to re-read the MGL on Sales Tax to see if perhaps I was indeed wrong.

MGLs Ch. 64H and 64I both do refer to "services" as being taxable. Ch. 64I states that the "definitions" are the same as in 64H. BUT, the true answer is in the state's definition of what is "services" wrt MA Sales Tax law.

Here's the definition of "services" from Ch. 64H S. 1.

http://www.mass.gov/legis/laws/mgl/64h-1.htm

"Services'', a commodity consisting of activities engaged in by a person for another person for a consideration; provided, however, that the term "services'' shall not include activities performed by a person who is not in a regular trade or business offering his services to the public, and shall not include services rendered to a member of an affiliated group, as defined by section 1504 of the Internal Revenue Code, by another member of the same affiliated group that does not sell to the public the type of service provided to its affiliate; and provided, further, that the term services shall be limited to the following item: telecommunications services. Nothing herein shall exempt from tax sales of tangible personal property subject to tax under this chapter.

Now I'll make an assumption as to why the confusion:

- At a point in the past, MGLs were modified to include Sales Tax on ALL SERVICES (hairdresser, CPA, computer consulting, legal services, real estate agent fees, ad nauseum).

- Just before this extension of the sales tax law was to go into effect, it was repealed due to the hue and outcry of many service providers.

- Speculation on my part . . . but it appears to me that they left the wording of "services" in MGL . . . but then RESTRICTED it to "telecommunication services" only. Thus the confusion if you don't read the definition very, very carefully.

I suggest that each of us read it for themselves and see who is right here. If The Doctor is correct, then lawyers, CPAs, hairdressers, real estate agents, etc. are all breaking the law in not charging everyone sales tax.

The readers can decide for themselves.

 

[the_doctor]

After reading "The Doctor" attack on my old post, I tried to re-read the MGL on Sales Tax to see if perhaps I was indeed wrong.

MGLs Ch. 64H and 64I both do refer to "services" as being taxable. Ch. 64I states that the "definitions" are the same as in 64H. BUT, the true answer is in the state's definition of what is "services" wrt MA Sales Tax law.

Here's the definition of "services" from Ch. 64H S. 1.

http://www.mass.gov/legis/laws/mgl/64h-1.htm



Now I'll make an assumption as to why the confusion:

- At a point in the past, MGLs were modified to include Sales Tax on ALL SERVICES (hairdresser, CPA, computer consulting, legal services, real estate agent fees, ad nauseum).

- Just before this extension of the sales tax law was to go into effect, it was repealed due to the hue and outcry of many service providers.

- Speculation on my part . . . but it appears to me that they left the wording of "services" in MGL . . . but then RESTRICTED it to "telecommunication services" only. Thus the confusion if you don't read the definition very, very carefully.

I suggest that each of us read it for themselves and see who is right here. If The Doctor is correct, then lawyers, CPAs, hairdressers, real estate agents, etc. are all breaking the law in not charging everyone sales tax.

The readers can decide for themselves.

I think that you should refrain from posting on this subject. You are clearly misguided on the topic. You accused someone of theft. You are cherry picking sections and are not reading the entire thing.

Nor does it seem to matter that GOAL has stated that you are wrong in the newsletter.

It is not a service. The object of the transaction is for a legal resident of the Commonwealth to take possession and title of a piece of tangible personal property. It is a transfer of legal personal property. In fact the consumer had not taken possession prior to completing the transfer with the dealer. The consumer has not completed the federal transfer documents until he has completed the transaction with the transferring dealer. Has title really passed? It does not matter. Mere transfer of possession results in a taxable sale.

MGL 6H Sec 1
"Sales price'', the total amount paid by a purchaser to a vendor as consideration for a retail sale, valued in money or otherwise. In determining the sales price, the following shall apply: (a) no deduction shall be taken on account of (i) the cost of property sold; (ii) the cost of materials used, labor or service cost, interest charges, losses or other expenses; (iii) the cost of transportation of the property prior to its sale at retail; (b) there shall be included (i) any amount paid for any services that are a part of the sale; and (ii) any amount for which credit is given to the purchaser by the vendor; and (c) there shall be excluded (i) cash discounts allowed and taken on sales; (ii) the amount charged for property returned by purchasers to vendors upon rescission of contracts of sale when the entire amounts charged therefor, less the vendors' established handling fees, if any, for such return of property, are refunded either in cash or credit, and when the property is returned within ninety days from the date of sale, and the entire sales tax paid is returned to the purchaser; provided, however, that where a motor vehicle is returned pursuant to a rescission of contract such motor vehicle must be returned within one hundred and eighty days of the date of sale; (iii) the amount charged for labor or services rendered in installing or applying the property sold; (iv) the amount of reimbursement of tax paid by the purchaser to the vendor under this chapter; (v) transportation charges separately stated, if the transportation occurs after the sale of the property is made; (vi) the amount of the manufacturers' excise tax levied upon motor vehicles under section 4061(a) of the Internal Revenue Code of 1954 of the United States, as amended ; and (vii) a "service charge'' or "tip'' that is distributed by a vendor to service employees, wait staff employees or service bartenders as provided in section 152A of chapter 149.

If you think that sales tax does not apply then USE tax surely does.

MGL 64I sec 4
Every vendor engaged in business in the commonwealth and making sales of tangible personal property or services for storage, use or other consumption in the commonwealth not exempted under this chapter, shall at the time of making the sales, or, if the storage, use or other consumption of the tangible personal property or services is not then taxable hereunder, at the time the storage, use or other consumption becomes taxable, collect the tax from the purchaser and give the purchaser a receipt therefor in the manner and form prescribed by the commissioner. The tax required to be collected by the vendor shall constitute a debt owed by the vendor to the commonwealth. Such vendor shall collect from the purchaser the full amount of the tax imposed by this chapter, or an amount equal as nearly as possible or practicable to the average equivalent thereof; and such tax shall be a debt from the purchaser to the vendor, when so added to the sales price, and shall be recoverable at law in the same manner as other debts.

You can ignore the realty that this has been the law since the late 1960's.

 

[SemiAutoSam]

Anyone have a link to MGL 64I sec 4 as to where the terms are defined ?

IMO Without definitions one cannot in reality figure out if the section applies to them.

The problem here lies in this mentality.

They define the statutes in a law dictionary but you fine ma**h***s define the words they use in the "Law" in your Websters dictionary.

Apples and Oranges people.

 

[bostonasphalt2]

It is not a service. It is a transfer of legal property. In fact the consumer had not taken possession. The consumer has not completed the federal transfer documents. Has title really passed? It does not matter. Mere transfer of possession results in a taxable sale.

But the store doing the transfer didnt sell it to anyone.

 

[kevin9]

Anyone have a link to MGL 64I sec 4 as to where the terms are defined ?

Front page to all MGLs on line.
Chapter 64I Section 4.
Definitions that apply to 64I-4 are actually in 64I-1.

IMO Without definitions one cannot in reality figure out if the section applies to them.

The problem here lies in this mentality.

They define the statutes in a law dictionary but you fine ma**h***s define the words they use in the "Law" in your Websters dictionary.

Apples and Oranges people.

Exactly. When it comes to law, words only mean what the law says they mean.

 

[namedpipes]

I think that you should refrain from posting on this subject. You are clearly misguided on the topic. You accused someone of theft. You are cherry picking sections and are not reading the entire thing.

Nor does it seem to matter that GOAL has stated that you are wrong in the newsletter.

It is not a service. It is a transfer of legal property. In fact the consumer had not taken possession. The consumer has not completed the federal transfer documents. Has title really passed? It does not matter. Mere transfer of possession results in a taxable sale.

If you think that sales tax does not apply then USE tax surely does.

You can ignore the realty that this has been the law since the late 1960's.

I'm happy to post about something I know nothing about.

Sales tax on a transfer fee? Thats just silly. The product being sold is the firearm. THAT's what garners the sales tax. The FFL may never even have OWNED the product being sold.

I have no doubt that in this god forsaken hell hole of disgustingly and openly dishonest/criminal/murderous politicians, what you say is legally correct.

It is NOT ethical, moral, probably not even consitutional. But HERE, sure, I'll believe it.

Why would it bother their collective braincell to tax that. It is probably the least harmful of the despicable acts the violate us with each day.

SOMEBODY GET ME ANOTHER DAMNED COFFEE

 

[lewis]

If you don't pay MA tax at the FFL, you have to report it on your end of the year taxes. They are nice enough to provide you a box to fill in how much you spent on our of state merchandise.

so if i went to NH and decided while i was there to buy an ipod. theres no freakin way in hell MA can touch that. just because im a MA resident doesnt mean my mass tax laws follow me everywhere i go. if i took a vacation to FL and paid their state tax, that means i need to come home and get TAXED again on things i already PAID TAX on!! give me a break. Unconstitutional. kiss my ass massachusetts.

 

[kevin9]

so if i went to NH and decided while i was there to buy an ipod. theres no freakin way in hell MA can touch that. just because im a MA resident doesnt mean my mass tax laws follow me everywhere i go. if i took a vacation to FL and paid their state tax, that means i need to come home and get TAXED again on things i already PAID TAX on!! give me a break. Unconstitutional. kiss my ass massachusetts.

Yep. It's called a use tax, which coincidentally is the same rate as the sales tax.

 

[EC1]

.

 

[lewis]

Yep. It's called a use tax, which coincidentally is the same rate as the sales tax.

yea cool.


thats how i feel about it. just so Governor Patrick can buy another cadillac or hire more of his shitbag friends to be "assistant to the assistants assistant" for 150k a year.

 

[the_doctor]

But the store doing the transfer didnt sell it to anyone.

No.

The store has transferred title and possession of the gun to the final customer.

It is very clear. There are no UCC shipping documents which indicate that the gun has been delivered to the final customer independent of the dealer. The issue of title is trickier, but you really do not get a title to the gun until you complete those transfer documents. A separate Bill of Sale from the original dealer really does not mean much. Regardless of title not passing at the time of transfer, if you wanted to argue as so much...Whereas the possession has taken place at the transfer point, then it is taxable.

Sec 4 of 64I has already been quoted

 

[the_doctor]

I'm happy to post about something I know nothing about.

Sales tax on a transfer fee? Thats just silly. The product being sold is the firearm. THAT's what garners the sales tax. The FFL may never even have OWNED the product being sold.

I have no doubt that in this god forsaken hell hole of disgustingly and openly dishonest/criminal/murderous politicians, what you say is legally correct.

It is NOT ethical, moral, probably not even consitutional. But HERE, sure, I'll believe it.

Why would it bother their collective braincell to tax that. It is probably the least harmful of the despicable acts the violate us with each day.

SOMEBODY GET ME ANOTHER DAMNED COFFEE

I wanted to address this in a separate post in order to maintain some clarity to the distinguishment of different points.

Yes, you may not appreciate the equity in the mechanisms as applied.

However, the reality is that all sales to a final consumer within the Commonwealth are to be taxed in order to prevent a privilege developing to sellers located outside of the Commonwealth. There was a sense of equity involved when writing 64I. I think that you can manifest this as the intent of the General Court at time.

However, I still maintain that the sale is actually taxable under 64H.

 

[the_doctor]

so if i went to NH and decided while i was there to buy an ipod. theres no freakin way in hell MA can touch that. just because im a MA resident doesnt mean my mass tax laws follow me everywhere i go. if i took a vacation to FL and paid their state tax, that means i need to come home and get TAXED again on things i already PAID TAX on!! give me a break. Unconstitutional. kiss my ass massachusetts.

Again, I am keeping subjects separate in order to eliminate confusion.

64I does indeed tax your purchase. You also receive a credit for tax properly paid to affiliated jurisdictions which had charged a sales tax against your liability.

You might not be aware of this...The Commonwealth's sales tax rate is the next to lowest in the whole country. Basically, it means that in general you owe no tax if you paid sales tax in another state. Only if you went to West Virginia would you have to fork an additional 1 percent to the Commonwealth.

I should also mention that in some cases Maine has taxed residents of the Commonwealth under the Maine Use Tax statutes due to the use of such items and as some items such as gun safes are exempt from taxation in the Commonwealth.

I suggest not voting for things and complaining as the subjects of the Commonwealth voted for the rate hike and permanent taxation before the 1980's.

 

[lewis]

Again, I am keeping subjects separate in order to eliminate confusion.

64I does indeed tax your purchase. You also receive a credit for tax properly paid to affiliated jurisdictions which had charged a sales tax against your liability.

You might not be aware of this...The Commonwealth's sales tax rate is the next to lowest in the whole country. Basically, it means that in general you owe no tax if you paid sales tax in another state. Only if you went to West Virginia would you have to fork an additional 1 percent to the Commonwealth.

I should also mention that in some cases Maine has taxed residents of the Commonwealth under the Maine Use Tax statutes due to the use of such items and as some items such as gun safes are exempt from taxation in the Commonwealth.

I suggest not voting for things and complaining as the subjects of the Commonwealth voted for the rate hike and permanent taxation before the 1980's.

i do vote. and i believe all voting is FIXED. its a sad thing to say, but i mean really, what IDIOT voted to keep income tax in the last election?? peoples excuses were "well if they get rid of income tax they will raise everything else" NEWS FLASH! theyre raising EVERYTHING else regardless.

and who gives a crap if we have next to the lowest sales tax? we have the highest tax on EVERYTHING else. and thats besides the point. you cant put SALES tax on something that wasnt bought here. if they really want to charge USE tax, then i should be reimbursed for the cost of fuel it took for me to go to NH and buy a T.V.

 

[namedpipes]

. . . However, the reality is that all sales to a final consumer within the Commonwealth are to be taxed in order to prevent a privilege developing to sellers located outside of the Commonwealth. There was a sense of equity involved when writing 64I. I think that you can manifest this as the intent of the General Court at time. . . .

Well I can tell you the reality is certain NH retailers are enjoying the privilege of doing business with many Mass residents and honestly, in reaction to the explosion of new and creative ways to demean us, I mean tax us, I hope it is enough to hurt the state.

 

[kevin9]

OK doc, here's a typical situation. I buy a handgun via Gunbroker from a dealer in NH for $300. I pay the NH dealer $300, have the firearm sent to a dealer in MA who transfers it to me for a transfer fee of $25. How much tax do I owe and to/through whom?

As I understand it the sale took place in NH between me and the NH dealer and therefore is not subject to the sales tax in 64H-2 because the transaction did not take place "at retail in the commonwealth".

The sale is subject to the use tax of 5% ($15) per 64I-2. This use tax is commonly expected to be paid by me directly to the state via my state income tax filing.

As I understand it the transfer fee is a charge for services rendered, not a purchase, otherwise the MA dealer would have to collect the 5% sales tax on the cost of the item. The MA dealer did not pay the NH dealer anything for the gun, nor did I pay the MA dealer the price of the gun; that was sent directly to the dealer in NH. Furthermore if I do not pick up the firearm from the MA dealer I believe they have to send it back to the NH dealer because they don't own it.

The question then becomes whether the transfer service fee is subject to tax as a service. Per the definition of "Services" in 64H-1 it is not a service as it is not a telecommunications service. Per 64I-1 this definition applies to 64I. Therefore the taxes listed in 65I and 64H do not apply to the transfer fee.

Questions?