Guns & Leather discusses Internet tax loophole

[TripleDigitRide]

Honestly, I cannot believe the government hasn't done something about this already.


http://www.wsmv.com/story/30979552/more-gun-stores-doing-background-checks-for-online-sales Edited January 16, 2016 by TripleDigitRide

[Mark A]

Honestly, I cannot believe the government hasn't done something about this already.

 

You mean something besides the Sales and Use Tax already on the books?

[TripleDigitRide]

You mean something besides the Sales and Use Tax already on the books?

I'm surprised at the lack of enforcement. 

[Sam1]

lack of enforcement is due to the expense/scope it would require to implement and manage.

[No_0ne]

lack of enforcement is due to the expense/scope it would require to implement and manage.

 

Very true, and short of some sort of Federal law being passed that's not likely to change.  It's doubtful Tennessee could win any sort of suit filed in another state requiring a business in that state to collect sales tax for Tennessee ...

[DWARREN123]

Free the internet! No tax with or without representation!

[Mark A]

Seems like it would be pretty easy to get info on transfers and compile a list all year long. On 4/16 of the following year you indict everyone that didn't file a use tax form. For all I know the feds could stretch the truth and somehow how make it a RICO case.

I know that is probably a stretch but it wouldn't be the first time the feds "creatively" interpreted the law.

Flood the news with 1,000's of indictments 2 years in a row and tax filings would go through the roof...

The first year you give them 30 days to file and the charges get dismissed. The second year you prosecute as many as it takes to get compliance flowing...

All it takes is a couple of gun store owners that are convinced they are getting screwed...

I know that may sound far fetched but so many things have gotten out of control with both state and fed gov that nothing would surprise me.

Mark

[Mark A]

Btw... I think people that go to any kind of store and then go buy it online are lame. It is just not something I do nor do I think it is fair.

But I travel a lot and it is hard for me to get to typical brick and mortar stores, especially gun stores. When I am sitting in a hotel somewhere at midnight after getting my quotes done I can go online and see if there is anything I want. It is just as fair to reward the online retailer with a sale at that point.

If you are a LGS and want to capture my business get your inventory online and accessible. It just isn't that hard to do these days. You don't need a super fancy site, just a functional web store. Gosh, they might even catch some biz from other people who live in different states...

Mark

[btq96r]

The using the internet to avoid state sales taxes isn't unique to guns, but with gun purchases being pricier items, it's more prevalent than it is with random stuff like a pair of shoes or something else.

 

Tennessee's sales tax puts a decent add on to any gun purchase.  Taking the transfer fee at $20-30 is more attractive than paying sales tax at $50 and climbing based on any sale over $513.  It's one of the biggest things that makes running a LGS a challenge, I'd imagine.

Edited January 16, 2016 by btq96r

[TripleDigitRide]

If you are a LGS and want to capture my business get your inventory online and accessible. It just isn't that hard to do these days. You don't need a super fancy site, just a functional web store. Gosh, they might even catch some biz from other people who live in different states...

Mark

This x100000000000000000000000000

[n0rlf]

Along with the web store at least make the inventory real time. It is not all that difficult to do.

I have lost count of the times I thought I purchased something only to get an email later stating it is out of stock. If I had known that up front I might have upgraded for a little more!

[Sam1]

Btw... I think people that go to any kind of store and then go buy it online are lame. It is just not something I do nor do I think it is fair.


Mark

 

Some gun stores scheme every penny out of people they can, others will work with the customers.  Just like in Franklin after Sandy Hook, when they were going to walmart and buying up all the ARs just to double the price and resell them in their store.  That kind of stuff leaves a bad taste in people's mouths and I don't think any tequila or mouthwash will make it go away.

 

When stores refuse to step off of MSRP because people continue to pay it, smart shoppers will go online.  I would say very few people spend $20 of gas and 2-3 hours of time driving to a shop just to handle a $500 gun then run off and buy it online to save $50 in taxes then pay $35 for a transfer.  It just doesn't happen.  Now if the brick and mortar stores could figure out ways to be more competitive with pricing, or be more willing to work with customers the benefits of buying online would be diminished.

[TripleDigitRide]

Some gun stores scheme every penny out of people they can, others will work with the customers. Just like in Franklin after Sandy Hook, when they were going to walmart and buying up all the ARs just to double the price and resell them in their store. That kind of stuff leaves a bad taste in people's mouths and I don't think any tequila or mouthwash will make it go away.

When stores refuse to step off of MSRP because people continue to pay it, smart shoppers will go online. I would say very few people spend $20 of gas and 2-3 hours of time driving to a shop just to handle a $500 gun then run off and buy it online to save $50 in taxes then pay $35 for a transfer. It just doesn't happen. Now if the brick and mortar stores could figure out ways to be more competitive with pricing, or be more willing to work with customers the benefits of buying online would be diminished.

Going to the store to fondle guns, then buying them online generally isn't worth it, unless the gun is over $500. There's no doubt this happens, but I think more people end up buying on the secondary market. Thank Al Gore for the Internet and countless websites for buying and selling firearms and related items.

I recently had two guns transfered through Guns and Leather. Not because I was trying to get a better deal or skirt the tax laws, but because Guns and Leather didn't have them. I get impatient, and I didnt want to wait 3-4 days for them to find out if they could even get them.

While I was there doing the transfers, I bought some night sights, ammo (even though they didn't have what I really wanted), and a couple other things. All of which I could have found cheaper online. I was willing to pay a few extra dollars for the convenience of getting my hands on the items right away. Edited January 17, 2016 by TripleDigitRide

[Sam1]

agree totally.

 

I don't think it happens as much as people think (as far as fondling guns then ordering online).  It usually happens exactly like you say, the gun store doesn't have what you actually want in stock, so you order it online and transfer it to them.  Then they get $25 for filling out a paper, which is sometimes what they profit on a cheap gun transaction itself.

 

Local stores don't like it because before big online stores they had no competition so they could squeeze people for more money, and that goes for any product.  I believe Mark's statement applies to non-firearms related products more so than to LGS.

[DaveTN]

I don't think it happens as much as people think (as far as fondling guns then ordering online).

I don’t think it does either. When I buy on-line it’s usually because the dealer doesn’t have what I want and can’t give me a time to get it. I don’t pay a local dealer more because I can come in and caress a gun; I don’t need to see it to buy it. I pay more so I can walk in and get it...instant gratification.

I think inventory hurts locals more than anything. I would even be willing to wait a reasonable amount of time. (No, I don’t have that but I can have one here Wednesday) If he gets me the gun, I’m paying taxes, but not an extra transfer fee amount. If the guns are available to me on-line a dealer should be able to get them from his distributor. If they can’t that’s probably an easier problem to fix than taxes.

[Sam1]

Yeah the inventory thing is a big deal, but it would take a shop the size of the VW plant to have enough weapons to satisfy all spur of the moment purchases. Edited January 17, 2016 by Sam1

[res308]

I've purchased online before, as I'm sure most everyone has. If not guns, then coats or fishing gear or etc, etc........

I can only speak for myself on this one, but at the time, I had not even thought of tax, thus I was not trying to avoid sales tax. The issue for me was the fact that on certain items, and I mean I was shopping "price point versus price point", if I can get a new gun online for $100 to $200 less in some cases --- and AGAIN -- I'm talking "price versus price" alone -- leaving "sales tax versus shipping" out of the equation, I went with the much cheaper price. At the rate of some online prices, I think even if the online retailers started charging sales tax, they would still beat the pants off of a shelf price. I shop regularly at one particular gun store in Clarksville, and I think very highly of the owners. If I need something and the price is only a few dollars difference between them and somewhere else, I'd rather give them my business. However, if it's a very substantial amount of difference (for me), then I'll buy elsewhere.

For example, if I find myself in need of a new "board stretcher" and "solar powered welding rods" and I find them online AND at my local widget shop, I'm going to compare. Let's say that both the local "We-B-Widgets" and the online store BOTH charge sales tax - for the sake of argument, equal percentage of sales tax. "We-B-Widgets" charges $60 bucks for the board stretcher, but the online store charges $25 plus $10 shipping, where am I going to shop? I like to support local quality businesses, but at the end of the day it's also important for me and my family to save money as well. Like I said, if there's only a few bucks difference, then so be it. But a very substantial difference is, well, different.

This is just my personal opinion here, but, depending on dealer cost and needed margin, would it hurt for the local dealers to bring their prices down some? OR, would it be such a crime for the bigger suppliers to charge the local dealers a little less, thereby giving the local dealers a little breathing room? Edited January 17, 2016 by res308

[LagerHead]

Seems like it would be pretty easy to get info on transfers and compile a list all year long. On 4/16 of the following year you indict everyone that didn't file a use tax form. For all I know the feds could stretch the truth and somehow how make it a RICO case.

I know that is probably a stretch but it wouldn't be the first time the feds "creatively" interpreted the law.

Flood the news with 1,000's of indictments 2 years in a row and tax filings would go through the roof...

The first year you give them 30 days to file and the charges get dismissed. The second year you prosecute as many as it takes to get compliance flowing...

All it takes is a couple of gun store owners that are convinced they are getting screwed...

I know that may sound far fetched but so many things have gotten out of control with both state and fed gov that nothing would surprise me.

Mark

 

Guess you're in that minority of folks that don't pay enough taxes already. ;)

[Tncobra]

I pay enough taxes, only for our gov to hand it out to whomever.

I am loyal to my local mom and pop stores, food or whatever. I don't shop at Walmart. If the price is competitive I will always spend local.

My local gun shop is competitive because they dont pay shipping. So tax is a wash for the most part.

I laugh at gun shows when vendors bitch and moan, "nobody brought money." When your prices are higher than the highest bass pro and your .22 is $60 a brick. I hope you go out of business.

"It's not fair" Last time I checked we live in a free market.

[A.J. Holst]

If the brick and mortar provides good to over-the-top servive, professionalism, quality products and a consultative sales approach, why begrudge the extra margin they earn?

If it's all about price, we will watch the LGS industry die a slow death.

[TripleDigitRide]

If the brick and mortar provides good to over-the-top servive, professionalism, quality products and a consultative sales approach, why begrudge the extra margin they earn?

If it's all about price, we will watch the LGS industry die a slow death.

I've been to a lot of gun stores, and Guns and Leather is one of the very few I'd miss. I try to support them as much as possible. Fact is, if I buy on line instead of from them, it's almost always because they don't have what we're looking for. I sent my girlfriend in there this weekend to buy a holster for her Shield. They didn't have anything that fit the bill, so we're looking online.

[Caster]

If this is a problem for a gun shop, then they have two simple options, charge more for the transfer or stop doing it.
it doesn't need to be any mor complicated. That's capitolism in a nutshell, if there's a profit to made, do it, if not, don't do it.


Personally, I wouldn't do it for $25 but I'm glad G&L does. I wouldn't want to see the price increase but at the same time, if they did, I wouldn't have anything negative to say about it.

[E4 No More]

 

 

I only buy online when I must, and it usually isn't something like a gun. Guns & More gets my business because they'll order what I want if they don't have it in stock and it's available at the distributor. They've done this twice for me without any problems and at a good price. Specialty Arms, on the other hand, don't offer to order me squat.

[btq96r]

I have seven guns.  Three were bought from an online store and shipped to my FFL; two were private in person trades; and one was bought on a gun forum and shipped to my FFL.  Only one them was bought in a store, and that was back in 2004.

 

I'd imagine that a LGS would hate to read that, but I doubt they would be surprised by it.  They would need to have something at equal cost or less than what I want when I want it to make me not order online from Buds, PSA, Primary Arms, or somewhere else.

 

Pete123 actually had an FFL holder on his TV show that talked about this last year.  Maybe he can chime in and talk about what that gentleman shared.  As I recall, he didn't like it, but he knew which way the wind was blowing and shifted his business to adapt to the change in trends.

 

 

If this is a problem for a gun shop, then they have two simple options, charge more for the transfer or stop doing it.

 

One issues is that it's not just gun shops that do transfers, it's anyone with an FFL that can run the background check, so the competition for transfer revenue is fierce.  Too much and they risk pricing themselves out of the game, and lose a chance to get people in the store who would naturally look around while waiting for the background check to come in.

 

I use a pawn shop with an FFL for my online purchases and private sales that ship FFL to FFL.  While they have a decent gun section, they're not a dedicated gun shop, so doing the transfers isn't taking away much business.  They only charge $20, plus the $10 TICS fee, and $30 is very tempting compared to a sales tax close to 10% on a purchase as pricey as a gun.

[DaveTN]

G&L needs to open a store in Murfreesboro.
That is all....