Tax Guide for
Gun Dealers

Tax Guide for Gun Dealers

Overview

As a California gun dealer, you are required to register for a seller's permit with the California Department of Tax and Fee Administration (CDTFA) to collect and remit tax on your retail sales of firearms, ammunition, and related accessories, unless the sale is specifically exempt or excluded from taxation by statute or type of transaction. Generally, the amount of tax is based on the selling price of the item at the time of sale, purchase, or acquisition. The tax rate is the rate in effect either at your business location or the location where the purchaser will store, use, or otherwise consume the property, depending on whether the transaction is subject to sales tax or use tax.

You may perform services such as registering a firearm or transferring ammunition brought into California from out-of-state. A charge for this service is generally taxable. You may also operate a gun club or a shooting range and provide ammunition and targets to your members. These charges may or may not be taxable, depending on the structure of the transaction.

This guide is designed to help you understand how tax applies to your sales.

Registration

If you sell firearms, ammunition, and related accessories, you must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit, file sales and use tax returns, and make payments for tax due on your sales or purchases. You can use our online registration system to quickly and easily register for a seller's permit.

Importers, manufacturers and dealers (retailers) of firearms in the United States must first register with the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to obtain a Federal Firearms License (FFL) before making any sales of firearms. It is unlawful for any person other than a registered FFL holder to make sales or transfers of firearms between private parties or across state lines.

In addition to being granted an FFL by the ATF, California Penal Code section 26700 requires retailers of firearms in California to apply with the State of California Department of Justice (CA DOJ) and register as a California Firearms Dealer (CFD). The California Penal Code also generally requires that any sale of a firearm be made through a CFD. To be issued a CFD identification number, you must first obtain a seller's permit issued by the CDTFA, in addition to other documentation requirements. For more information, please see the resources tab for a link to the CA DOJ's Frequently Asked Questions.

Delivering and Registering Firearms or Ammunition for Out-of-State Retailers

The California Penal Code requires that the sale of a firearm or ammunition from an out-of-state retailer be made through a CFD. In a typical transaction, the California purchaser will contact you to make arrangements for the transfer of the firearm or ammunition from the out-of-state retailer. The out-of-state retailer will then ship the firearm or ammunition to you to log it into your Federal Acquisition/Disposition books, complete the CA DOJ Firearms Dealer Record of Sale (DROS) and deliver the firearm to the California purchaser.

When a California Federal Firearms Licensed dealer (FFL) completes the registration and transfer paperwork and delivers a firearm or ammunition to a California purchaser on behalf of either an out-of-state private party or an out-of-state retailer who is not registered with the CDTFA, the California FFL dealer is presumed to be the retailer of the firearm or ammunition and generally owes sales tax on the total amount of the sales price including any service charge or handling fees but excluding the DROS fee. This is by operation of law, only the California FFL dealer possessing the firearm or ammunition has authority to transfer title to the purchaser. As a California firearms dealer, you should obtain a copy of the sales contract or invoice from the out of state seller or the purchaser in order to determine the proper amount of tax due on the sale.

Note: On and after January 1, 1999, the CA DOJ transfer fee is not subject to tax.

Registering a Firearm from a California Private Party Seller

When a California private party seller brings a California FFL dealer a firearm and requests that they find a buyer, the FFL dealer is considered the consignee and retailer of the firearm and liable for sales tax on the subsequent sale of the firearm.

However, when a California FFL Dealer completes the registration paperwork for a California private party that is selling a firearm to a California purchaser and the seller and purchaser have negotiated the terms of sale in advance, and then bring the firearm to you to meet the statutory requirements for the documentation and registration of the transfer, the California FFL dealer is not considered to be the retailer of the firearm and not be responsible for the tax provided the FFL dealer does not take title to the firearm at any time during the transaction. The private party seller would be liable for the tax unless the transaction qualifies for an exemption. For example, the sale of a firearm between California private parties may be exempt from tax if the sale meets the provisions of an exempt occasional sale as provided in Regulation 1595, Occasional Sales–Sale of a Business–Business Reorganization.

Gun Clubs, Memberships, and Giveaways

If you operate a gun club or shooting range that furnishes ammunition with your trapshooting or similar activities for a single lump sum price, you are the consumer of the ammunition and other materials (for example, clay pigeons, blue rocks, or targets) furnished to your members. As a consumer, you owe tax on your purchases of these items to your vendors.

However, if you operate a gun club or shooting range and make sales of ammunition, firearms, food or other property to your members for a separate price, you are the retailer of those items and those sales are subject to sales tax. You may purchase these items without tax by issuing your vendor a resale certificate. See Sales for Resale and Exempt Sales below.

Membership fees and dues paid by members solely for the use of the facilities of a gun club or shooting range are generally not subject to tax. However, when a gun club or shooting range provides tangible personal property with the purchase of a membership, such as a “free” shotgun or rifle, in order to entice a customer into joining, then the gun club or shooting range is the retailer of that property and owes sales tax on the fair retail selling price.

Additionally, your membership fees related to the anticipated retail sale of tangible personal property are subject to tax if you sell property only to members and the membership fee is $60 or more per year, or regardless of the cost of membership, you sell property for less to paid members than to someone who has not paid the fee.

Out-of-State Sellers

If you are an out-of-state gun dealer, you may be required to register with the CDTFA if you are a retailer engaged in business in California. A retailer “engaged in business in this state” specifically includes, but is not limited to, any of the following:

  • Any retailer maintaining, occupying, or using, permanently or temporarily, directly, indirectly, or through a subsidiary or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business.
  • Any retailer having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this state under the authority of the retailer or its subsidiary for the purpose of selling, delivering, installing, assembling, or taking of orders for any tangible personal property.
  • Any retailer deriving rentals from a lease of tangible personal property situated in this state.
  • Any retailer that owns or leases real property or personal property such as, machinery and equipment, furniture, or computer servers in this state.
  • Beginning April 1, 2019, any retailer that has total combined sales of tangible personal property for delivery in this state by the retailer and all persons related to the retailer that exceed five hundred thousand dollars ($500,000), in the preceding or current calendar year (see Use Tax Collection Requirements Based on Sales Into California Due to the Wayfair Decision).

If you are an out-of-state seller and your only presence in California is for conventions or trade shows, you are not considered to be engaged in business in California if:

  • Your presence in this state is not more than 15 days during any 12-month period, and
  • You did not derive more than $100,000 of net income during the prior calendar year from those convention or trade show events.

However, if you intend to sell merchandise at a trade show or convention, you must register with us for a temporary seller's permit. You must also collect and remit the tax on taxable sales made during the event, even though you are not required to hold a regular seller's permit. If you sell items at events held on state-designated fairgrounds, you must separately report these sales when filing your return.

For more information, please see our Tax Guide for Out-of-State Retailers.

Sales for Resale and Exempt Sales

A sale for resale is not subject to tax. However, you should be aware that an FFL does not qualify as a resale or exemption certificate even though this license, combined with a copy of a seller's permit, may contain some of the essential elements specified for a resale certificate. As a gun dealer, you are required to furnish a resale certificate to your vendor or receive a resale certificate from your customer as prescribed in Regulation 1668, Resale Certificates. These certificates should be provided to your vendors and retained in your records for no less than four years.

To help you meet these sales for resale requirements, you may use form CDTFA-230, Resale Certificate, available on our website. For more information please see Publication 103, Sales for Resale.

Sales to the U.S. Government, or sales made in interstate or foreign commerce, are generally exempt from tax.

For more information about exemptions and exclusions that may apply see Publication 101, Sales Delivered Outside of California and Publication 102, Sales to the United States Government.

For More Information

If you have any questions regarding registration as a California Firearms Dealer, please contact the State of California Department of Justice, Bureau of Firearms by phone at 916-210-2300, or by mail at:

Bureau of Firearms
P.O. Box 820200
Sacramento, CA 94203-0200

If you have any questions regarding the application of tax to the sales or transfers of firearms, please call our Customer Service Center at 1-800-400-7115 (CRS: 711). Representatives are available Monday through Friday from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.

Filing and Payments

Helpful Resources

  • CDTFA Online Services – A listing of CDTFA online services, including online registration for seller's permits and other accounts.
  • CDTFA Offices – A comprehensive listing of all CDTFA offices and contact information.
  • City and County Tax Rates – A listing of current and historical tax rates.
  • Find Your Tax Rate – You can look up the current sales and use tax rate for a specific address.
  • Contact Us – A listing of CDTFA contacts for your questions and concerns.
  • Get It in Writing! – The Sales and Use Tax Law can be complex, and you are encouraged to put your tax questions in writing.
  • Sign Up for CDTFA Updates – Subscribe to our email lists to receive the latest news, newsletters, tax and fee updates, and other announcements.
  • Taxpayers' Rights Advocate (TRA) – The TRA Office helps taxpayers when they are unable to resolve a matter through normal channels, when they want information regarding procedures, or when there are apparent rights violations.

Other Resources

If You Need Help

If at any time you need assistance feel free to contact us by telephone or email. For contact information and hours of operation please see our How to Contact Us webpage.

If you have suggestions for improving this guide, please contact us via email.