Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
295.0000 GROSS RECEIPTS
(g) SERVICE CHARGES GENERALLY
295.1675.600 Service Charge for Sale of Firearms. Since the change in the law requiring private parties to sell firearms only through licensed dealers, a company asks whether the fee it charges to file the required state paperwork to the Department of Justice is subject to tax.
Whether the company is liable for sales tax on the transaction depends upon whether the company is the retailer of the firearms. If an owner of a firearm and a purchaser have negotiated the terms of the sale in advance and then bring the firearm to the company to meet the statutory requirements of the Penal Code, the company is not the retailer of the gun and does not owe tax on the fee or any other charges for the firearm. If, however, an owner of a firearm brings the gun to the company and requests the company to find a buyer, the company is the consignee and the retailer of the firearm, and is liable for sales tax on the sale. In that case, the company must include all fees and charges in the measure of tax. 1/9/92; 2/20/92. (Am. 99–2).
(Note: On and after January 1, 1999, the Department of Justice fee is not includible in the measure of tax, but all other charges remain subject to tax.)