Laws, Regulations and Annotations

Amounts for Reimbursement Not Included in Gross Receipts. California Firearm, Ammunition, and Firearm Precursor Part Excise Tax (CFET) reimbursement should not be included in gross receipts for purposes of determining the amount of CFET that the retailer owes.

Gross receipts for purposes of the CFET should be measured in the same manner as gross receipts are measured for purposes of determining the sales tax due to the state by the retailer. Thus, where a retailer collects reimbursement from its purchaser for the amount of CFET due to the state by the retailer on the transaction, and the retailer communicates to the purchaser that the amount charged as reimbursement is for the CFET due to the state by the retailer, such as by separately stating the charge on the receipt or other invoice as “CFET reimbursement,” the amount the retailer collects from its purchaser for CFET should be excluded from the retailer’s gross receipts for purposes of determining the amount of CFET due. 6/12/2024.

May Agree to the Collection and Payment of Tax Reimbursement. A retailer and a purchaser may agree to the collection and payment of California Firearm, Ammunition, and Firearm Precursor Part Excise Tax (CFET) reimbursement.

A retailer and a purchaser, at the time of a retail sale, may make an agreement of sale whereby the purchaser reimburses the retailer for the amount of CFET due to the state by the retailer on the transaction. Because the terms of the agreement of sale determines whether the parties have agreed to the addition of tax reimbursement, the parties should be as clear as possible as to their intentions. The clearest way the parties can indicate to the satisfaction of the CDTFA that the seller has agreed to collect, and the purchaser has agreed to pay, an additional amount for CFET reimbursement is for the sales invoice to state a separate line item for the amount of CFET reimbursement charged. 6/12/2024.