Extras on Excise: Cook County Circuit Court Upholds Local Firearms Tax


 

On Aug. 17, 2018, Judge David Atkins of the Circuit Court for Cook County, Illinois, issued an order for summary judgment in Guns Save Life, Inc., v. Zahra Ali, No. 2015-CH-18217, ruling that Cook County’s firearm and ammunition tax is constitutionally valid under Illinois and Federal law.

The main plaintiff in the suit—Guns Save Life, Inc.—is an Illinois-based gun advocacy group that challenged the Firearm Tax Ordinances, which became effective in 2015, under the Second and Fourteenth Amendments to the United States Constitution, and Article I, Section 22 of the Illinois Constitution.

Judge Atkins ruled in favor of the defense—Zahra Ali, in her capacity as Director of the Department of Revenue of Cook County, et al.—and sustained its cross-motion for summary judgment.

The most important ordinance in question, Cook County Code §74-668, imposes a flat tax of $25.00 on every retail purchase of a firearm in Cook County; a $0.05 tax per cartridge of centerfire ammunition sold at retail in Cook County; and a $0.01 tax per cartridge of rimfire ammunition sold at retail in Cook County.

The court held that these provisions were constitutionally valid because, even though there is a fundamental, individual right to keep and bear arms, the taxes imposed under §74-668 do not actually “burden” individuals’ ability to exercise their Second Amendment rights. Rather, the court explained, “[t]he $25 Firearm Tax and $.01 or $.05 Ammunition Tax are proper exercises of Cook County’s Home Rule taxing powers …”

Sales of firearms have long been subject to federal taxation, per U.S.C. §4181; however, Cook County, Illinois, and Seattle, Washington, are some of the first localities to impose excise taxes on firearms sales. Be sure to follow Bloomberg Tax’s products to see which cities, municipalities, and/or counties follow suit.

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Do you think more localities will follow in Cook County’s footsteps? Why or why not?

Get a free trial to Bloomberg Tax: State, a comprehensive research service that provides deep analysis and time-saving practice tools to help practitioners make well-informed decisions.