9 replies to this topic

[Poprivit]

If I sell a NFA weapon to someone out of my state (I have no SOT), I know I have to do a Form 4.
My questin is, do I have to pay the $200 transfer tax when I transfer to the dealer?
I called the ATF in California and the resident agent could not answer my qiestion.
I'm going to call ATF back east Monday for clarification (NFA 202-927-8330).
Interesting that the local agent, who enforces the law, could not answer my question. She gave zero advice
other than to call ATF. I thought these people were all on the same page. Just shows to go you
that ya better get the right answer from the actual dudes who run the show in D.C.
The back of the Form 4, under the "Paperwork Reduction Act Notice" says in the second sentence, "The information ... is used in
applying to transfer firearms TAXPAID to persons OTHER THAN SPECIAL TAXPAYERS QUALIFIED TO DEAL IN NFA FIREARMS ...

Interesting, ain't it?

[PK.]

I believe any interstate transfer not involving two SOT’s requires a tax.

I’m not an attorney and don’t play one on TV

[heavymg]

You are not liable for the $200 xfr tax. That's because you already paid the tax when you were approved for the Form 4.

If you're selling a Form 4/Title II item to out of state dealer, there is no transfer tax due whatsoever by either yourself or the dealer. You already paid the tax when your Form 4 was approved, and the dealer pays $500/yr for his SOT license to not pay Form 4 transfer taxes.

When the out of state dealer takes possession of the Title II item, and then transfers it to his instate customer...the dealer is....again, technically speaking....responsible for the $200 xfr tax to his local customer. I say "technically speaking" because ATF regs require the dealer to remit a $200 xfr tax. However, in reality, the dealer always passes the tax to his customer, and often requires the buyer to remit a $200 check to Treasury dept. In actuality, it's the DEALER who's supposed to submit the actuall check to ATF. However, ATF doesn't seem to care who sends them the money, as long as they get it (i.e, "the money").

Sam Alvarez
T&S Manufacturing
FFL 07/SOT Class II
Southington, CT
860-628-8174...9a-6p EST...M-F
website: 99main.com/~heavymg/TSMG

[PK.]

ATF says the opposite.

The tax that was paid when the current form 4 was executed has nothing to do with a future transfer.

You are right Sam in saying the transferor is responsible for the tax, and the transferor in this case has no SOT.

If the SOT then transfers the gun on a form 4 (to a non SOT), another tax is due.

My understanding is that the only way a tax can be avoided is if the transfer is on a form 3, SOT to SOT.

Again, I’m no expert on this and if you want the real skinny, call ATF. The above opinion is based on my experience and a call to ATF this morning.

[Erniecc]

I am not a Class 3 and don't play one on these boards, but my understanding is that anytime an individual transfers a machine gun on a Form 4, a $ 200 tax is required. And it does not matter if the individual is transferring to a C3 or not. The tax is a "transfer" tax, not an ownership tax.

If this is wrong, then the ATF owes me $ 400 for 2 Form 4 transfers I did last year as an individual to a dealer.

[Mike Hammer]

Yes indeed a $200 tax must be paid to ATF&E, who pays it really dosn't matter and can be negotible between buyer and seller when you are negotiating the sale of the weapon. If no such negotiation took place, I guess your left holding the bag and paying for it.

Mike Hammer

[Brickyard]

It's been a year or so but to beat the dead horse one more time ...

4 + 200 you to SOT then 4 + 200 SOT to you. Either 200 can be negociated (SP) in the price of the gun/freight/etc. But, you will put a check in the envelope, both times.

Only exception I can think of (just to further confuse) is: if the gun is listed on the C&R list in which case, I believe, if the buyer holds a C&R license, the transaction can be direct between you and the buyer. You save 200 and 16 weeks.

HTH

[hawksnest]

I just purchased a C&R M-2 carbine from an individual in Indiana. I live in Ohio and have a C&R license. (C&R cost is $30.00 for 3 years). I was sucessful in having the carbine (form 4) transferred directly from the seller to me and only paid one $200.00 transfer tax. If I did not have a C&R license it is my understanding the gun would have needed to be transferred to an Ohio dealer ($200.00 tax) and then to me (another $200.00 tax) and since that involves Two (2) transfers the time before I had my baby in my hands would have increased (probably double). A C&R license is well worth it IMHO.

[heavymg]

PK;

Not sure my last post was clear. Maybe this is better put...


FORM 4 TRANSFER BETWEEN QUALIFIED INDIVIDUALS LIVING IN SAME STATE
-------------------------------------------------------------------------------------------------

Joe lives in Montanna. He bought a mint overstamp TSMG from an in state SOT in 1993. The SOT had the gun on his books on a Form 3. He transferred it to Joe on a Form 4. Besides paying the price for the TSMG Joe also paid the $200 Form 4 transfer tax. He paid it with a personal check made out, and mailed to, BATF.

Now it's 10 years later. Joe want to sell his TSMG to his buddy, Harry. Harry lives in Montana, about 350 miles from Joe. Providing Harry (the buyer) can get a CLEO signoff, Joe can sell (transfer) his TSMG directly to Harry, without either Joe or Harry ever having to go through an SOT. (note: not many people realize that in-state Form 4 transfers between qualified individuals don't need to go through an SOT).

Ok....Harry fills out his Form 4 and gets CLEO signoff. He's ready to mail Form 4 and fingerprint cards to ATF. But wait a minute. Who's going to pay the $200 transfer tax? Joe sure isn't. He already paid $200 to have the TSMG transferred to him in 1993. Who's left? That's right. Harry. And he's gladly going to write a check for $200 to ATF in order to own that mint TSMG.

This is why it's usually accepted that a $200 transfer tax is 'accredited' to the buyer of an NFA item.


TRANSFERRING FORM 4 NFA ITEM TO OUT OF STATE SOT
----------------------------------------------------------------------
Joe wants to sell his TSMG to his brother, Peter. Peter lives in Georgia. He's a Class II dealer. He's going to transfer the gun to his books using a Form 3. Who pays the transfer tax, Joe or Peter?

The answer is neither, as there is no transfer tax due. Why?

Well, Joe already paid $200 in 1993 to get the TSMG on a Form 4. And Peter is an SOT (Class II). One benefit of the Class II/III SOT classification is that in most cases - but not all - no transfer tax is due on NFA items transferred to the dealer. There would be no transfer tax due by the seller or out of state dealer in a scenario like this one.


WOULD TAX EVER BE DUE ON THE TSMG IN THIS SCENARIO?
---------------------------------------------------------------------------
Yes. If Peter ever sells (i.e. transfers) the TSMGto a qualified in-state buyer on a Form, then the qualified buyer will pay the $200 transfer tax. Now...it could be that Peter actually writes the check and sends it to ATF, but rest assured that Peter raised the TSMG price to cover the $200. Thus, in effect, the buyer (once again) has paid the transfer tax.

And so...again...this is why the Form 4 $200 transfer tax is usually associates with and mentally accredited to the buyer.


WHAT IF PETER SELLS TSMG TO ANOTHER DEALER IN ANOTHER STATE?
-----------------------------------------------------------------------------------------
If the transfer (i.e. "sale") takes place on a Form 3, then neither dealer will pay any transfer tax for this event. The only time transfer tax will be due is if the (new) dealer transfers the gun to a qualified individual (i.e. "buyer') on a Form 4.


WHAT HAPPENS TO TSMG WHEN PETER (CLASS II) GOES OUT OF BUSINESS?
----------------------------------------------------------------------------------------------
He can sign out the TSMG to his personal collection. At this time he still does not owe any transfer tax...at all. Why? Because "signing out" the TSMG means he wrote (in his bound book) "To private collection of Peter". This just shows the "disposition" (i.e. where the gun is) of the firearm. All this time, the TSMG is still registered on a Form 3.

A transfer tax will be due if and when Peter decides to transfer (i.e. "sell") the TSMG. Even if he sells and transfers it to an SOT...transfer tax will be due. Why? Because ATF let Peter skip the transfer tax when the TSMG was Form 3'd to him. Now that he's no longer a dealer, ATF wants their $200


DID I MAKE THIS ANY CLEARER....OR AS CLEAR AS MUD??

Sam

[must]

I bought a NIB Colt M-16 along time ago from a class 3 dealer in Utah (I payed the tax). A number of years later, I sold it to a private party in Utah (no dealer) & he payed the tax. He was happy to do so too (I should of kept the gun, I paid $500.00 for it plus the tax).