Gun tax triggers controversy

Posted: Nov 30, 2011 9:43 PM by Ariel Wesler
Updated: Dec 1, 2011 8:22 AM

Old law causing new problems for gun dealers

Some gun dealers are up in arms over a sales tax they say California has recently decided to enforce. Now, if you buy a gun from out of state, you will be required to pay sales tax on it.

The tax law has actually been in the books since 1935, but some gun retailers say they never knew about it.

Many local gun shops received a letter at the beginning of the month from the State Board of Equalization. It reminds them to collect sales tax from customers who purchase firearms from outside California, online or otherwise.

Joe Degeus feels he and his customers are being targeted.

"The state is looking for more money, and they're attacking us to get it so they can pay for things," Degeus said.

He runs the Range Master gun shop in Santa Maria. He's worried the added tax, also known as a use Tax will scare away some of his customers.

"When they get here, they're going to the terrible surprise that I've got to collect tax on their stuff," Degeus said.

Typically, when customers buy out of state, they have pay to transfer and register the firearm in California. Now, they'll have to hand over some extra cash and Degeus says he'll have to do some extra accounting.

"I have to go back and re-figure out the amounts that I did not collect but had to collect taxes for. That's a nightmare!" he said.

Buying a gun online is usually a cheaper option and until now, those buyers did not have to pay a tax. But,the state says that tax actually helps local retailers by evening the playing field, saying

"The use tax is intended to protect California sellers who otherwise would be at a competitive disadvantage when out-of-state sellers make sales of goods to California customers without charging tax."

Degeus plans to follow the rules, but fears he'll lose out to those who don't.

"Those kind of shops are the people that people will flock to, and they'll get a lot of the business until it all catches up to them," he said.

This gun tax is all related to the budget bill that will force online retailers like Amazon and others to collect California sales tax, starting next September.

Meanwhile, retailers are working with lawmakers to come up with a national standard on collecting sales tax for online purchases.

Amazon told federal lawmakers Wednesday they support a sales tax for online retailers as long as everyone is treated fairly.

California lawmakers say the tax also assures all Californians contribute fairly to pay for local and state programs.

It's estimated the extra tax could bring in at least $200 million a year.