WA State Department of Revenue Making the Rounds

[rodell]

The WA DOR has been making the rounds. Under RCW 82.12.040 (1), they demand taxes be collected on transfers. In the event of a private sale, the blue book value is used.

Ouch.

The relevant statute, RCW 82.12.040:

(1) 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, digital goods, digital codes, digital automated services, extended warranties, or sales of any service defined as a retail sale in RCW 82.04.050 (2) (a) or (g), (3)(a), or (6)(b), 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 must 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. For the purposes of this chapter, the phrase "maintains in this state a place of business" shall include the solicitation of sales and/or taking of orders by sales agents or traveling representatives. For the purposes of this chapter, "engages in business activity within this state" includes every activity which is sufficient under the Constitution of the United States for this state to require collection of tax under this chapter. The department must in rules specify activities which constitute engaging in business activity within this state, and must keep the rules current with future court interpretations of the Constitution of the United States.

My favorite shop was not happy about it, but felt compelled to comply. Their lawyers agreed. I think non-stocking FFLs who only provide a service are not required to comply, based on the definitions here and in RCW 82.08.010. I'll be looking for just such a FFL in the Seattle area!

Bob

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[deen_ad]

It doesn't matter if the dealer is stocking or not, they are still obligated to collect the sales tax as it's considered a transaction by a business. It doesn't matter if the dealer runs his business out of his bedroom either (although I don't think you can get a license to do that). If you have a business license you must collect the tax and remit it to the state. If you're a "casual seller" of your own guns then you don't need to charge the tax.

BTW: this is NOT something new, the law has been in effect for several years (the DOR webpage has a 2007 copyright date), most dealers simply ignored it because they didn't know or thought it didn't apply to them. Some ignored it and got caught which has cost them as the dealer is required to pay the tax whether he collected it or not. Cost Mike at Brightwater Ventures here in Vancouver some $$ out of his own pocket. Mike then asked his customers to reimburse him, most did, some did not. This may be why he doesn't do many (if any) transfers now.

The WAC is concerned about it as it may come down to requiring even casual sellers at their shows to collect the tax, but it's still in limbo.


Deen
NRA Benefactor/Recruiter

 

[rodell]

I realize the it isn't anything new. The DOR agents have been visiting some of the local shops here in Seattle to "remind" them of the rules. I can't believe this is a significant source of revenue.

I suppose some of the shops don't mind, as it will drive their business.

 

[Celtic Armory]

The f*ed up thing about this tax is that it's NOT a tax on the SERVICE but on the firearm. It doesn't matter how the firearm comes into the state, it must be taxed. So lets say you inherit your great great great granddaddy's mint condition Kentucky rifle that was used in the War of Northern Aggression that's valued at $10,000 and the transfer service is $25. The tax is on the $10,000, not the$25.

The communists in our government that have spent our state into the red for the past decade felt they had to tax us as much as possible. This amounts to an interstate tax. they are taxing us for commerce conducted in other states. You could also look at it as an interstate import tax. This is the sort of tax that the interstate commerce clause was created to prevent. But since they aren't taxing the other state they'll just tax the resident.

It also doesn't matter what the product is. It could be your grandma's '65 Corvette. It doesn't matter if you buy it, it's a gift or you inherit it, you still get taxed on it's value.

 

[Blitzkrieg]

The f*ed up thing about this tax is that it's NOT a tax on the SERVICE but on the firearm. It doesn't matter how the firearm comes into the state, it must be taxed. So lets say you inherit your great great great granddaddy's mint condition Kentucky rifle that was used in the War of Northern Aggression that's valued at $10,000 and the transfer service is $25. The tax is on the $10,000, not the$25.

The communists in our government that have spent our state into the red for the past decade felt they had to tax us as much as possible. This amounts to an interstate tax. they are taxing us for commerce conducted in other states. You could also look at it as an interstate import tax. This is the sort of tax that the interstate commerce clause was created to prevent. But since they aren't taxing the other state they'll just tax the resident.

It also doesn't matter what the product is. It could be your grandma's '65 Corvette. It doesn't matter if you buy it, it's a gift or you inherit it, you still get taxed on it's value.

It's well past time for a serious housecleaning in Olympia. Get out the vote, folks!

 

[Whitedragon]

The f*ed up thing about this tax is that it's NOT a tax on the SERVICE but on the firearm. It doesn't matter how the firearm comes into the state, it must be taxed. So lets say you inherit your great great great granddaddy's mint condition Kentucky rifle that was used in the War of Northern Aggression that's valued at $10,000 and the transfer service is $25. The tax is on the $10,000, not the$25.

The communists in our government that have spent our state into the red for the past decade felt they had to tax us as much as possible. This amounts to an interstate tax. they are taxing us for commerce conducted in other states. You could also look at it as an interstate import tax. This is the sort of tax that the interstate commerce clause was created to prevent. But since they aren't taxing the other state they'll just tax the resident.

It also doesn't matter what the product is. It could be your grandma's '65 Corvette. It doesn't matter if you buy it, it's a gift or you inherit it, you still get taxed on it's value.

As I read it, the law says "purchase price", thus, an inheritance is not liable for the tax as it is not sold across state lines but simply transferred. This is not a rare thing. Similar laws in other states, and only purchases across state lines are taxed, not simple transfers. (At least so far)

 

[Blitzkrieg]

As I read it, the law says "purchase price", thus, an inheritance is not liable for the tax as it is not sold across state lines but simply transferred. This is not a rare thing. Similar laws in other states, and only purchases across state lines are taxed, not simple transfers. (At least so far)

How does a transfer dealer know whether it has been sold, inherited, given as a gift or won in a contest?

 

[deen_ad]

As I read it, the law says "purchase price", thus, an inheritance is not liable for the tax as it is not sold across state lines but simply transferred. This is not a rare thing. Similar laws in other states, and only purchases across state lines are taxed, not simple transfers. (At least so far)

"value" of the weapon and gives instructions on how the dealer is to determine that. So it really doesn't matter, you get to pay no matter what.

 

[Blitzkrieg]

FTF is going to be very popular in the future

 

[Buddymack]

I think Montana is headed in the right direction, sure wish we were...but what empowers the powers to be here is the blue koolaid ...

 

[Benkei]

We can legally buy long-guns in OR from an OR FFL. I don't think we can buy handguns outside of our own state. So at least for any long-gun transfers you can find a friendly OR FFL close to the border to do the transfer for you and not have to pay any sales tax.

 

[8ball]

I think Montana is headed in the right direction, sure wish we were...but what empowers the powers to be here is the blue koolaid ...

Can you really compare Montana to WA? The WA economy is ten times the size of Montana, and generates far more high paying jobs than Montana. If you added Kitsap County and Snohomish County you'd have a state with more people than Montana.

Montana may not have a sales or use tax, but the property taxes are close to WA levels, plus they have a state income tax (up to 6.9%) and they tax retirement income and they have property taxes on automobiles and business equipment which WA does not.

 

[Blitzkrieg]

Can you really compare Montana to WA? The WA economy is ten times the size of Montana, and generates far more high paying jobs than Montana. If you added Kitsap County and Snohomish County you'd have a state with more people than Montana.

Montana may not have a sales or use tax, but the property taxes are close to WA levels, plus they have a state income tax (up to 6.9%) and they tax retirement income and they have property taxes on automobiles and business equipment which WA does not.

Actually WA has a tax on personal property, it simply is not enforced (yet)

 

[Celtic Armory]

As I read it, the law says "purchase price", thus, an inheritance is not liable for the tax as it is not sold across state lines but simply transferred. This is not a rare thing. Similar laws in other states, and only purchases across state lines are taxed, not simple transfers. (At least so far)

Incorrect. The law says "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." Meaning that if the item being transferred isn't being sold then you collect the USE tax not the Sales tax (thought they are both the same). But if there is no purchase price (in say an inheritance) then the tax must be collected based on the value of the item.

http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-178
WAC 458-20-178
Use tax.

(1) Nature of the tax. The use tax supplements the retail sales tax by imposing a tax of like amount upon the use within this state as a consumer of any article of tangible personal property purchased at retail or acquired by lease, gift, repossession, or bailment, or extracted, produced or manufactured by the person so using the same, where the user, donor or bailor has not paid retail sales tax under chapter 82.08 RCW with respect to the property used.

 

[rodell]

I just can't believe it was worth enough money to send people out to the shops to "remind" them.

Ok, who on here works for the WA DOR????

 

[ZachS]

http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-178
WAC 458-20-178
Use tax.

(1) Nature of the tax. The use tax supplements the retail sales tax by imposing a tax of like amount upon the use within this state as a consumer of any article of tangible personal property purchased at retail or acquired by lease, gift, repossession, or bailment, or extracted, produced or manufactured by the person so using the same, where the user, donor or bailor has not paid retail sales tax under chapter 82.08 RCW with respect to the property used.

This means (partly) that if someone in Oregon loans you something, you have to pay use tax on it...

 

[Blitzkrieg]

Incorrect. The law says "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." Meaning that if the item being transferred isn't being sold then you collect the USE tax not the Sales tax (thought they are both the same). But if there is no purchase price (in say an inheritance) then the tax must be collected based on the value of the item.

http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-178
WAC 458-20-178
Use tax.

(1) Nature of the tax. The use tax supplements the retail sales tax by imposing a tax of like amount upon the use within this state as a consumer of any article of tangible personal property purchased at retail or acquired by lease, gift, repossession, or bailment, or extracted, produced or manufactured by the person so using the same, where the user, donor or bailor has not paid retail sales tax under chapter 82.08 RCW with respect to the property used.

How can the transfer dealer know what you paid for the item? They would have to contact every seller and ask, and based on that unrecorded dialogue charge the buyer

 

[rodell]

The two shops I frequent said they need a receipt or they will use the blue book value.

Bob

 

[Redcap]

The two shops I frequent said they need a receipt or they will use the blue book value.

Bob

Get receipts for $1.