Why do we pay the $200 tax on Form 4s?

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rankhornjp
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Why do we pay the $200 tax on Form 4s?

Post by rankhornjp »

When the law says the dealer (or transferor) has to pay it.
Last edited by rankhornjp on Fri Oct 17, 2014 12:18 pm, edited 1 time in total.
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Bendersquint
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Re: Why do we pay the $200 tax on Form 4s?

Post by Bendersquint »

rankhornjp wrote:When the law says the dealer has to pay it.
Please cite your reference to the requirement of the dealer having to pay your transfer tax.
telero
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Re: Why do we pay the $200 tax on Form 4s?

Post by telero »

The short answer is so that the dealer doesn't charge you an extra $200. Also, it's transferor, not dealer...even though most of the time the transferor will likely be a dealer.

What you're probably referencing is 26 USC 5811 (b) By whom paid:
The tax imposed by subsection (a) of this section shall be paid by the transferor.
http://www.law.cornell.edu/uscode/text/26/5811

The long answer is it's a matter of convenience. It doesn't say the dealer can't charge you and extra $200 for paying it for you, but it's likely more convenient for you to just cut the check. When a form 4 could be submitted via eForm it was probably paid by the dealer, after you paid the dealer the $200 to begin with. If the dealer gives you the paperwork to send in, you're likely sending the check directly. If the dealer says they will pay the tax for you, they already included it in the price of whatever they sold you, and any haggling you do to get them to pay the tax was already included in the markup.
rankhornjp
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Re: Why do we pay the $200 tax on Form 4s?

Post by rankhornjp »

telero wrote:The short answer is so that the dealer doesn't charge you an extra $200. Also, it's transferor, not dealer...even though most of the time the transferor will likely be a dealer.

What you're probably referencing is 26 USC 5811 (b) By whom paid:
The tax imposed by subsection (a) of this section shall be paid by the transferor.
http://www.law.cornell.edu/uscode/text/26/5811

The long answer is it's a matter of convenience. It doesn't say the dealer can't charge you and extra $200 for paying it for you, but it's likely more convenient for you to just cut the check. When a form 4 could be submitted via eForm it was probably paid by the dealer, after you paid the dealer the $200 to begin with. If the dealer gives you the paperwork to send in, you're likely sending the check directly. If the dealer says they will pay the tax for you, they already included it in the price of whatever they sold you, and any haggling you do to get them to pay the tax was already included in the markup.
That is the correct section that I'm referencing. The question came from reading several discussions on whether or not a trust needs it's own bank account and I found that section while researching it for myself. So, in this case, it seems that the BATFE doesn't care who writes the check, as long as they get paid....
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Bendersquint
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Re: Why do we pay the $200 tax on Form 4s?

Post by Bendersquint »

As long as it is paid ANYONE can pay for it, neighbors, friends from Germany, anyone.
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Garrett
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Re: Why do we pay the $200 tax on Form 4s?

Post by Garrett »

Bendersquint wrote:As long as it is paid ANYONE can pay for it, neighbors, friends from Germany, anyone.
Correct. ATF doesn't care who the $200 comes from. But the way the regs are written, the transferror is the party who is responsible for it being paid.

Of course, it's all academic at this point. Because if no one pays the tax, the forms aren't going through.

I suppose someone could sue their dealer after paying for a MG or silencer and have the court compel the dealer to pay the tax... and the buyer would end up wasting a lot more time and money in the process.
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