Bennett's Gun Shop; Phoenixville

[Pa. Patriot]

I do not collect USE tax on items that are Personal transactions, person to person. Only when they come from another Business.

Personal transactions are not subject to use tax liability....

BUT

You should not be "collecting" any use tax.
Use tax is the responsibility of the consumer. Including you when you buy taxible items for your business from another business that does not charge you sales tax.


For God's sake read the link I provided... for starters

[dc dalton]

I do not collect USE tax on items that are Personal transactions, person to person. Only when they come from another Business.

Man I'll tell you what, I have seen thick headed in my day but you take the cake! This has been explained to you six ways to Sunday and you REFUSE to listen to logic and reason.

I mean seriously WTF ... you can't be that shortsighted can you? You have probably caused your business more damage by refusing to listen to OTHER GUNS SHOPS than you could have ever done any other way.

Seriously, at this point I would just stop posting because every time you do you just stick your foot deeper down your gullet!

[headcase]

I do not collect USE tax on items that are Personal transactions, person to person. Only when they come from another Business.

You shouldn't be collecting USE tax, at all. Period. USE tax is a tax that YOU pay on items YOU use, that YOU didn't pay sales tax on. It is in no way, shape, or form, ever COLLECTED from a customer. You are also going to be in very big trouble if you don't get someone to straighten out your books if you have also been collecting sales tax on the purchase price of items you only transferred, but did not actually sell. I hope your books are in as good a shape as you claim, because you are very likely going to have to track down everyone you UNLAWFULLY collected sales and use tax from, and repay them, or at the very least, inform them that you fucked up and sent the money on ahead to the revenue department. Were I you, I would get hold of someone from the revenue department and explain that this was just brought to your attention and you would really like to make it right, before you get sued by somebody....

[elitefirearms]

I have NEVER collected use tax on any transfer. This guy is why some people are nervous with doing buisness with FFL dealers. He should have his license revoked and turned in to the IRS. I'm sorry you had to get screwed this way. Nothing pisses me off more than someone getting screwed by a FFL dealer. You should be able to trust your dealer. He is a disgrace to FFL dealers everywhere. I hope someone on here turns him in to the Better Buisnes Bureau. Thats it. I'm done ranting. Good luck with your transfer man. If I was closer I would have him ship it to me and I would do the transfer for free but it's a little to far to drive.

[bennettgun]

Gentlemen,

I have send a letter to the DOR for clarification of this. If I have done wrong I will admit it. I have not deliberately scammed anyone. I may have gotten some bad infomation from someone in the past on this, and took his word as gospel. I am glad that you guys have bought this to my attention so that if I am wrong and the D.O.R agrees with you, the collecting will end. I just hope whatever the outcome we can still communicate as friends and not wish harm to anyone. Mistakes happen, then comes repentence. It will probably take a few days for the Dept of Rev. to return with the answer. I will post it.

[dc dalton]

Gentlemen,

I have send a letter to the DOR for clarification of this. If I have done wrong I will admit it. I have not deliberately scammed anyone. I may have gotten some bad infomation from someone in the past on this, and took his word as gospel. I am glad that you guys have bought this to my attention so that if I am wrong and the D.O.R agrees with you, the collecting will end. I just hope whatever the outcome we can still communicate as friends and not wish harm to anyone. Mistakes happen, then comes repentence. It will probably take a few days for the Dept of Rev. to return with the answer. I will post it.

A LETTER? What is this 1965? Ever hear of a phone? How about reading the statutes that have been posted here numerous times?

So what's this poor guy supposed to do while your letter sits on some civil servant's desk (that doesn't give two shits about him)?

Seriously what are YOU going to do for this poor guy that's waiting for his gun while you fiddle fart around with letters?

I also LOVE how you have based all this on the advice of ONE person, yet when you are corrected by no less that three other FFLs you refuse to listen ... pigheaded is NOT the word any more.

[bennettgun]

Sorry, it was an e-mail to the DOR. Having answers in writing is better than a phone call. Even though I have received advice from some other dealers, of which I appreciate, I want to cover my butt with documentation. If anyone can give me a reference number on the code with the section number instead of FAQ I would appreciate it. I really want to do the right thing guys. Also, The guy you are referring has had he gun even before he made his displeasure known on this site.

[Pa. Patriot]

Gentlemen,

I have send a letter to the DOR for clarification of this. If I have done wrong I will admit it. I have not deliberately scammed anyone. I may have gotten some bad infomation from someone in the past on this, and took his word as gospel. I am glad that you guys have bought this to my attention so that if I am wrong and the D.O.R agrees with you, the collecting will end. I just hope whatever the outcome we can still communicate as friends and not wish harm to anyone. Mistakes happen, then comes repentence. It will probably take a few days for the Dept of Rev. to return with the answer. I will post it.

Kudos for following up.

[HiredGoon]

...If anyone can give me a reference number on the code with the section number instead of FAQ I would appreciate it. I really want to do the right thing guys. Also, The guy you are referring has had he gun even before he made his displeasure known on this site.

This?

Pennsylvania Code 61 § 31.7. Use tax.

(a) Imposition. Imposition of use tax shall conform with the following:

(1) A person who purchases taxable tangible personal property or services outside of this Commonwealth incurs a use tax liability at the rate of 6% of the purchase price if the property or services are subsequently used or consumed in this Commonwealth and Commonwealth tax is not paid to the vendor. The use tax is also incurred by a purchaser of taxable tangible personal property or services within this Commonwealth if tax is not paid to the vendor.

(2) Licensees shall report and pay use tax at the time their regular sales tax return is due. Nonlicensees shall report and pay use tax on or before the end of the month following the month during which the tax was incurred.

(3) Purchasers who are licensed by the Bureau of Sales and Use Tax (Bureau) or who reside outside of this Commonwealth shall pay the tax directly to the Bureau. Purchasers who reside in this Commonwealth, except those who reside in Philadelphia County, shall be given the option under the law of paying the tax either directly to the Bureau or to the treasurer of the county in which they reside. The following are illustrations of transactions which give rise to tax liability. It is assumed in each example that the vendor has not collected sales tax from his purchaser:

Example 1. A resident of this Commonwealth purchases a radio from a New York supply house. The purchaser incurs use tax liability whether the purchaser brings it into the Commonwealth himself or has it shipped to him.

Example 2. A resident of this Commonwealth purchases a radio from a Commonwealth vendor who fails to collect tax on the transaction. The purchaser is liable for use tax.

Example 3. A company has offices in New York and this Commonwealth. It sends office equipment purchased in New York to its offices in this Commonwealth. The company incurs use tax liability on the equipment.

Example 4. A New York firm has salespersons soliciting orders in this Commonwealth. It purchases advertising displays in New York which it uses for promotional purposes in this Commonwealth. The company incurs use tax liability on the displays.

Example 5. A furniture manufacturer purchases lumber tax-exempt under a resale exemption certificate. It uses some of the lumber to repair its own office flooring. It incurs use tax liability on the lumber.

Example 6. A resident of this Commonwealth has his truck repaired in New Jersey. The resident incurs use tax liability on the repair charges when he brings his repaired truck into the Commonwealth.

Example 7. A contractor of this Commonwealth purchases plumbing materials from a New York manufacturer to install in houses the contractor is building in this Commonwealth. He incurs use tax liability on the materials.

Example 8. An Ohio contractor brings equipment and materials into this Commonwealth to use or consume in constructing an office building. He incurs use tax liability on the equipment and materials.

(b) Credit against tax. A credit against use tax shall be granted with respect to tangible personal property purchased for use outside of this Commonwealth equal to the tax paid to another state by reason of the imposition, by the other state, of a tax similar to the tax imposed by the TRC, if credit will not be granted unless the other state grants substantially similar tax relief by reason of payment of the tax under the act. A current listing of the states can be obtained upon request from the Bureau.

(c) Alternate imposition. Use tax is generally imposed upon the original purchase price of tangible personal property. Exceptions to this general rule are as follows:

(1) Purchases made 6 months or longer prior to first taxable use—fair market value. For property purchased 6 months or more prior to its first taxable use in this Commonwealth, the taxpayer may elect to pay the tax on the fair market value of the property at the time of its first use in the Commonwealth rather than on its original purchase price. The fair market value is the prevailing market price of similar personal property at the time and place of its first taxable use. The election to use this alternative base shall be made within 1 year from the date the return for the taxable use is due by filing notice with the Bureau on Form PA-3 and by paying tax together with any accrued penalties and interest due.

(2) Vehicle dealer temporarily using inventory vehicle. An election may be made to pay an alternate use tax of 6% of the fair rental value on motor vehicles, trailers or semitrailers, other than wreckers, parts trucks, delivery trucks or courtesy cars, purchased by a dealer for resale and used for a period not exceeding 1 year. See § § 31.41—31.50 (relating to vehicles).

(d) Exemptions. The provisions of this section are applicable, with the following exceptions:

(1) General exemptions. The resale and isolated sale exemptions and limited exemptions applicable with respect to tangible personal property or services purchased by exempt business entities such as manufacturers, farmers, dairymen or other persons, organizations or institutions entitled to exemption under the TRC are applicable. Reference should be made to individual sections applicable to each particular exemption. Generally, if a purchaser is not subject to tax on the ‘‘sale at retail’’ to him of property or services, he is not subject to tax on their use. This general rule is not applicable to property or services purchased without payment of tax by a nonexempt purchaser from an out-of-State vendor or when an exempt purchaser makes a use inconsistent with his exemption.

(2) Establishment of permanent business or residence in this Commonwealth. When a nonresident natural person or business entity not actually doing business in this Commonwealth brings property into this Commonwealth in connection with the establishment of a permanent business or residence, tax is not due provided the property was purchased more than 6 months prior to the date it was brought into this Commonwealth or more than 6 months prior to the establishment of the business or residence whichever first occurs. This paragraph is not applicable to tangible personal property temporarily brought into this Commonwealth for the performance of contracts for the construction, reconstruction, remodeling, repairing or maintenance of real estate.

(3) Property brought into this Commonwealth by tourists, vacationers for less than 7 days. The use of tangible personal property purchased by a nonresident person outside of this Commonwealth and then brought into this Commonwealth for use herein for a period not to exceed 7 days or for any period of time when the nonresident is a tourist or vacationer is not subject to tax if the property is not consumed within this Commonwealth. This 7-day period is calculated on a cumulative basis within any 12 consecutive months.

Cross References

This section cited in 61 Pa. Code § 31.5 (relating to persons rendering taxable services); 61 Pa. Code § 33.2 (relating to purchase price); and 61 Pa. Code § 60.16 (relating to Local Sales, Use and Hotel Occupancy Tax).

[bennettgun]

Having not received an e-mail reply from DOR, I called and told the rep what I was doing. After a long delay she informed me that the tax was to be paid, but by the customer on the following month. When I asked if I broke any laws she said "no just don't collect the Use tax". I am glad that the dealers on this site brought this to my attention, though quite sternly at times and I can leave this up to the customers to voluntarily send it in using the PA-1 form. The signs in the shop have changed and use tax will stop on this. I have learned something and my week on this site has been a good experience. I still had to check with the appropiate authority though, as I hope you understand, but can not post a written responce as I have not received one. Thank you all for the info and guidance. Please visit my auctions on gunbroker.com, seller name bennettgun

John Bennett III
Bennett's Gun Shop
1170 Rapps Dam Rd
Phoenixville, Pa 19460