Is a Georgia gunsmith's firearm transfer fee taxable when the gun was purchased from an out-of-state seller?

Plain-English summary

A Georgia gunsmith's firearm transfer fee was not taxable when the customer bought the gun from an out-of-state seller and the gunsmith only received the shipment and delivered the gun. The gunsmith did not sell the firearm or collect its purchase price, and Georgia did not specifically identify this stand-alone service fee as taxable.

The result changed when the gunsmith sold the gun itself. In that situation, the transfer fee was a seller charge connected with the sale and had to be included in the taxable sales price.

Common questions

Q: Does handling delivery of a gun bought elsewhere make the transfer fee taxable?

A: No, under the ruling's facts. The gunsmith neither sold the gun nor took payment for it.

Q: What if the gunsmith is also the gun's seller?

A: The transfer fee must then be included in the taxable sales price.

Citations and references

• O.C.G.A. §§ 48-8-2(31), 48-8-30(a) -- tax on retail sales of tangible personal property and designated services
• O.C.G.A. § 48-8-2(33)(A) -- sale definition
• O.C.G.A. § 48-8-2(34)(A) -- sales price and seller charges

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2013-01

Original ruling text

State of Georgia
Douglas J. MacGinnitie
Commissioner

Department of Revenue

Administrative Division – Office of Tax Policy
1800 Century Blvd., Suite 15107
Atlanta, Georgia 30345-3205
(404) 417- 6649

Frank M. O’Connell
Director

June 12, 2013

Re: Request for Declaratory Ruling dated April 25, 2013

This letter is in response to your request for guidance on the application of Georgia sales and use tax to transfer fees
charged by gunsmith shops.
Facts
Taxpayer is a Federal Firearms Licensed dealer and gunsmith shop located in Georgia. Under Federal law, guns
can only be shipped to licensed gun dealers. Because of this, when an individual purchases a gun out of state, the
gun purchased must be shipped to a licensed gun dealer located in this state for pick up by the purchaser. The
Georgia gun shop charges a transfer fee at the time the purchaser takes delivery of the gun. The Georgia gun shop
does not sell the gun and does not take payment for the gun. Taxpayer is requesting guidance on whether the
transfer fee charged is subject to the tax.
Issue
Is the gun transfer fee charged by Taxpayer subject to the tax when Taxpayer does not sell the gun and does not take
payment for the gun?
Analysis
Georgia imposes a tax on the retail sales price of tangible personal property and certain services. 1 A “Sale” is the
transfer of title or possession, transfer of title and possession, exchange, barter, lease, or rental, conditional or
otherwise, in any manner or by any means of any kind of tangible personal property for a consideration 2 The term
“sales price” applies to the measure subject to sales tax and means the total amount of consideration, including cash,
credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money,
whether received in money or otherwise, without any deduction for the following:
•
•

1
2

the seller's cost of the property sold;
the cost of materials used, labor, or service cost, interest, losses, all costs of transportation to the seller, all
taxes imposed on the seller, and any other expense of the seller;

O.C.G.A. §§ 48-8-2(31); 48-8-30(a).
O.C.G.A. § 48-8-2(33)(A).

An Equal Opportunity Employer

June 12, 2013
Page 2 of 2

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charges by the seller for any services necessary to complete the sale;
delivery charges 3

Unlike sales of tangible personal property, which are generally presumed taxable, sales of services are exempted
unless specifically designated as taxable. In the same manner, fees are exempt unless explicitly identified in statute
as being subject to the tax.
Ruling
The gun transfer fee charged by Taxpayer is not subject to tax when Taxpayer does not sell the gun transferred to the
purchaser because the gun transfer fee is not identified as taxable in Georgia statutes.
When the Taxpayer charges a gun transfer fee in connection with a sale made by the Taxpayer, the gun transfer fee
must be included in the sales price and taxed accordingly.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances and taxpayer in question. Should the circumstances regarding the
transactions change, or differ materially from those represented, then this ruling may become invalid. In addition,
please be advised that subsequent statutory or administrative rule changes or judicial interpretations of the Statutes
or Rules upon which this advice is based may subject similar future transactions to a different tax treatment than that
expressed in this response.

3

O.C.G.A. § 48-8-2(34)(A).