Industry Topics for Sellers of Firearm and Ammunition Products

The California Firearms, Firearm Precursor Parts, and Ammunition Excise Tax

The California Firearms, Firearm Precursor Parts, and Ammunition Excise Tax (CFET) is imposed on the gross receipts of retail sales (for example, sales to consumers) in California of any firearms, firearm precursor parts, or ammunition made by licensed firearms dealers, firearms manufacturers, and ammunition vendors at the rate of 11 percent (R&TC section 36011).

Visit our Tax Rates – Special Taxes and Fees webpage to view current and historical CFET rates.

CFET Gross Receipts

For the purposes of the CFET, gross receipts include the sales price of the firearms, firearm precursor parts, or ammunition and all charges related to the sale, such as any business expense separately added to any taxable sale listed separately on the invoice or receipt provided to the purchaser. State fees collected at the time of retail sale that are paid by the purchaser (for example, DOJ Firearms Dealer Record of Sale (DROS) fee, Firearms Safety fee, and Safety and Enforcement fee) and that are listed separately on the invoice or receipt provided to the purchaser are not subject to the CFET and should be excluded when calculating the CFET. Also, sales and use tax separately stated on the invoice or receipt should not be included in the gross receipts for CFET.

Sales Tax in General

Your retail sales of firearms, firearm precursor parts, ammunition products, and any other tangible personal property you sell in California are generally subject to sales tax, unless the law provides a specific exemption. Your sales and use tax gross receipts should not include any CFET reimbursement amount separately stated on the invoice or receipt provided to the purchaser.

In addition to the sales price of the item being sold, you must also include the following in your gross receipts subject to sales tax:

• Any business expense separately added to any taxable sale on the receipt to your customer (for example, a merchant credit card processing fee).

The sales tax rate is composed of different components: a state tax rate, the local tax rate, and any district tax rate that may be in effect. The tax rate varies across the state and will generally depend on the location of your business. You may look up the current sales and use tax rate by visiting our Find a Sales and Use Tax Rate webpage.

Tax Calculation Example

Example scenario: Customer goes into a sporting goods store and purchases a hunting rifle and a hat and pays with a credit card.

Tax calculation example

*An 8.5% sales and use tax rate is used for demonstration only.

Tax Reimbursement

As a retailer, you are liable for the sales tax and the CFET on your taxable sales, and you must report and pay the sales tax and the CFET to us. A retailer has the option to collect sales tax reimbursement from their customers, but it is not mandatory. Similarly, a retailer may optionally collect CFET reimbursement from their customers.

If sales tax is included in the sales price, you must post a sign notifying your customers that the sales tax is included in the sales price. If signage is not posted on the premises visible to the customer, then sales tax must be based on the sales price and added to the receipt.

If CFET reimbursement is collected on retail sales exempt from the CFET, the excess CFET reimbursement collected must be returned to the purchaser or reported and paid to us.

Sales for Resale and General Exemptions

Sales for Resale

A sale for resale is not subject to sales and use tax or the CFET. However, you should be aware that a 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 firearm dealer, you are required to give 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 a CDTFA-230, Resale Certificate, available on our website. For more information, please see publication 103, Sales for Resale.

General Exemptions

Sales to the U.S. government are generally exempt from sales and use tax. However, these sales may be subject to the CFET (see the CFET Exemptions section below for more information).

Sales made in interstate or foreign commerce are generally exempt from sales and use tax and the CFET.

CFET Exemptions

Retail sales of firearms, firearm precursor parts, or ammunition are exempt from the CFET, but may still be subject to the sales and use tax when: 

• The sale is to any active or retired peace officer  or any law enforcement agency employing that peace officer [R&TC section 36021(a)].
• In any quarterly period, the total gross receipts from those retail sales are less than five thousand dollars ($5,000.00) [R&TC section 36021(b)].

To facilitate the recordkeeping of your CFET exempt sales, you may use a CDTFA-230-CFET,Firearm and Ammunition Excise Tax Exemption Certificate for Peace Officers and Law Enforcement Agencies.

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.

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

The California Penal Code requires that the sale of a firearm, firearm precursor part, or ammunition from an out-of-state (FFL) retailer be made through a registered California Firearms Dealer (CFD). The out-of-state retailer will ship the firearm or ammunition to the CFD to log it into their Federal Acquisition/Disposition books, complete the DOJ Firearms DROS, and deliver the firearm, firearm precursor part, or ammunition to the California purchaser.

When a CFD completes the registration and transfer paperwork and delivers a firearm, firearm precursor part, or ammunition to a California purchaser on behalf of either an out-of-state private party or an out-of-state FFL retailer who is not registered with us, the CFD is presumed to be the retailer of the firearm, firearm precursor part, or ammunition and generally owes the sales tax and the CFET on the total amount of the sales price including any service charge, delivery, or handling fees but excluding the DROS fee, Firearms Safety fee, and Safety and Enforcement fee that are paid by purchasers. Only the CFD possessing the firearm, firearm precursor part, or ammunition has the authority to transfer title to the purchaser. As a CFD, you should obtain a copy of the sales contract or invoice from the out-of-state FFL seller or the purchaser to determine the proper amount of taxes due on the sale.

Registering a Firearm from a California Private Party Seller

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

However, when a CFD completes the registration paperwork for a California private party who 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 the CFD to meet the statutory requirements for the documentation and registration of the transfer, the CFD is not considered to be the retailer of the firearm and will not be responsible for the sales and use tax or the CFET, provided the CFD does not take title of the firearm at any time during the transaction. The private party seller would be liable for the sales tax unless the transaction qualifies for an exemption. For example, the sale of a firearm between California private parties may be exempt from sales 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 owe the sales and use tax. For sales and use tax purpose 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 sales and use tax on your purchases of these items to your vendors. As such, if you know at the time of purchase that you will be giving ammunition away, you should not purchase the ammunition at wholesale or issue a resale certificate for it.

If you operate a gun club or shooting range and sell 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 and the CFET. You may purchase these items without sales tax by issuing your vendor a resale certificate. See the Sales for Resale (link to: Sales for Resale title above) section above.

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 sales and use tax or the CFET. 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 to entice a customer into joining, then the gun club or shooting range is the retailer of that property and owes both sales tax and the CFET on the fair retail selling price.

Additionally, your membership fees related to the anticipated retail sale of tangible personal property are subject to sales and use tax if you sell property only to members and the membership fee exceeds $70 per year, or regardless of the cost of membership if you sell property for less to paid members than to someone who has not paid the membership fee.

Out-of-State Sellers

If you are an out-of-state FFL dealer, you may be required to register with us for a seller's permit if you are a retailer engaged in business in California. Out-of-state retailers are not required to register with us for a CFET certificate of registration. 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 people related to the retailer that exceeded 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 FFL 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 for 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 pay the sales 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 sales and use tax return.

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