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Aug. 4 — Columbine. Virginia Tech. Fort Hood. Newtown. Washington's Navy Yard. San Bernardino. Orlando.
Recent mass shootings in the U.S. stage the backdrop for an increasingly tense duel between advocates for gun control and gun rights. And that friction is seeping into a debate typically not raised amid the immediate post-shooting rhetoric: whether state and local tax laws can target firearms and ammunition.
Inevitably, the introduction of such a tax sparks resistance from the National Rifle Association and other gun rights groups, arguing that the charges function as an impermissible regulation and violate constitutional protections under federal and state laws.
Proponents have rebuked such characterizations, countering that such taxes are within their purview to raise revenue—typically to fund research and programs addressing public safety concerns and facilitating crime reduction.
Still, with gun advocates quick to fight back, the movement toward taxing guns is very slow.
Recent proposals to increase the federal excise taxes on firearms and ammunition have stirred objections, including a bill introduced in 2013 (H.R. 3018). Some are concerned that Democratic presidential candidate Hillary Clinton will seek a tax increase if elected. Those concerns stem from testimony she gave during a 1993 Senate Finance Committee hearing that she would support a 25 percent sales tax on guns.
Clinton suggested during a June 5 interview on ABC News' “This Week with George Stephanopoulos” that such a measure could cover medical and law enforcement costs. However, she stopped short of endorsing such a tax increase.
Only a small number of localities levy special taxes, beyond the standard sales tax, on guns and ammunition. Seattle and Cook County, Ill., are embroiled in litigation over recently enacted laws levying a tax on both guns and ammunition. Members of the Los Angeles City Council have sought a report on a similar tax structure, including the potential impact on businesses and revenue projections.
“We view it as a poll tax to restrict or reduce the exercise of a constitutional right,” Lawrence Keane, senior vice president and general counsel for the National Shooting Sports Foundation Inc., told Bloomberg BNA Aug. 3. The foundation has raised several arguments against firearm and ammunition taxes and is one of the plaintiffs contesting the Seattle tax regime.
Keane likened firearm and ammunition taxes to taxing pharmacies to combat the opioid epidemic, explaining that such taxes are a misguided agenda that harm law-abiding citizens for the actions of criminals.
“It's a total disconnect,” he said. “Those taxes don't have any impact on the actions of criminals.”
Recently enacted legislation imposing a $1,000 tax on handguns in the Northern Mariana Islands, a U.S. commonwealth, has generated talk of copycats on the mainland.
But no state has voiced any intention of following suit, nor do historical efforts to enact firearm or ammunition taxes suggest that future efforts will be successful.
Several states and localities have submitted proposals in recent years that never became law, including California, Maryland, Massachusetts, New Jersey and Nevada. Measures failed or stalled in 2015 in Baltimore and Missouri, both earmarking funds for police body camera programs.
Amid cries that the taxes encroach on a liberty preserved in the Second Amendment, some are looking to legal devices that will neutralize such efforts.
In December 2015, Illinois Rep. Jerry Costello (D) introduced H.B. 4348, which prohibits local governments from imposing any tax, fee or assessment beyond the normal sales tax rate on firearms, firearm attachments and ammunition. A sister bill in the Illinois Senate, S.B. 2341, was introduced by Sen. Matt Murphy (R) in January. Both bills are sitting in committee.
Statistics reveal an industry ripe for generating tax revenue at both the federal and state level—some of which could cover the costs associated with gun violence. Some researchers estimate $229 billion in annual costs, including medical care and services, prison costs, disability expenses, safety infrastructure and law enforcement.
A 2012 Congressional Research Service report indicated that 310 million firearms were available in 2009—114 million handguns, 110 million rifles and 86 million shotguns. The production of guns in the U.S. almost doubled from 5.6 million in 2009 to 10.8 million in 2013, according to a 2015 report from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
Since the launch of the National Instant Criminal Background Check System in 1998, the FBI has processed approximately 239.5 million firearm background checks. Black Friday 2015 boasted the most background checks in a single day since the system's inception, leading to a total of 23.1 million checks in 2015—the highest annual figure. And Current data suggests 2016 is on track to set a new record.
These figures don't account for total sales: state laws vary on private sales and many sales are concealed through underground transactions. Notwithstanding the precise number of firearms or sales, reports indicate that the federal excise taxes on firearms and ammunition have generated significant revenue, reaping $875 million in 2013.
Revenue projections for state measures are more elusive. A 2013 Board of Equalization report indicated that a California measure could generate $92.4 million in annual revenue.
Joseph Henchman, vice president of legal and state projects with the Tax Foundation, told Bloomberg BNA in an Aug. 3 e-mail that several recent proposals didn't advance far enough for revenue estimates.
The legislative motive for taxes on firearms and ammunition is usually the same: to raise revenue for public safety research, physical and mental health studies and interventions, and gun violence prevention initiatives.
However, opponents almost always challenges this motive as a ruse, arguing that such legislation is a thinly veiled firearm regulation and an infringement of constitutional protections.
“We believe the objective was to drive retailers out of business by making their products more expensive so that consumers would go elsewhere,” Keane said. “And that already happened in Seattle.”
Keane said that revenue projections don't come to fruition, as customers go elsewhere to purchase firearms and ammunition. Or gun shops relocate outside the city, as one of the Seattle plaintiffs has already done.
This tug-of-war is playing out in Cook County, Ill., where gun rights advocates and retailers are challenging an almost 4-year-old firearm tax of $25 and a recently added ammunition tax of 1 to 5 cents per cartridge (219 DTR H-1, 11/14/12).
The original firearm tax survived a challenge three years ago, when gun dealers and owners attempted to block it from taking effect.
Amended complaints filed in late February allege violations of both federal and state constitutions and contest the tax as an impermissible regulation preempted by state statutes.
“Because the Second Amendment Tax purports to be an exercise of the Commission's taxing power, and not a regulation enacted as an exercise of the Commission's police power, it independently infringes the right of Illinois citizens to keep and bear arms granted to them by Section 22, Article I, of the Illinois Constitution, a right that is explicitly made '[s]ubject only to the police power,' not to the taxing power,” according to the complaint.
However, proponents of firearm and ammunition taxes characterize them as legitimate tools to cover the societal and economic costs of gun violence.
Since taking effect in 2013, the Cook County firearms tax has generated about $2.85 million to cover costs associated with medical care for gunshot victims and law enforcement. The ammunition tax, which took effect June 1, is expected to bring in $300,000 this fiscal year.
Some critics have taken issue with escalating gun violence in Chicago, which sits in Cook County, casting aspersions on the tax as ineffective in slashing crime. The number of Chicago shooting victims in 2016 is on track to eclipse the 2,988 victims in 2015, with 2,395 reported victims this year .
Supporting the Cook County lawsuit, the NRA issued a news release in November 2015 portraying the taxes as merely a political ploy to burden the constitutionally protected possession of firearms and ammunition.
“Since its enactment in 2012, the County's tax on firearms has done nothing to make the streets of Cook County safer,” the NRA said. “Confronted with this evidence of failure, the Cook County Board of Commissioners chose to double down on its unconstitutional attack on the Second Amendment when it voted last month to impose a new tax on the sale of ammunition in Cook County.”
However, proponents of firearm and ammunition taxes say they are one countermeasure in a comprehensive strategy to help make their streets safe.
“These taxes ultimately provide resources that assist Cook County's holistic approach to public safety,” Ted Nelson, a Cook County spokesperson, told Bloomberg BNA in a July 19 e-mail. “We recognize that taxing guns and bullets by themselves will not end gun violence in Chicago and Cook County.”
Likewise, Seattle is taking heat over its “gun violence tax” that took effect Jan. 1, with the objective of raising funds to address public safety concerns.
The tax mandates collection of $25 on each gun sale and 2 to 5 cents per ammunition round, which is projected to generate $300,000 to $500,000 annually.
Backed by the NRA and other gun rights advocates and businesses, a pending lawsuit ( Watson v. Seattle) echoes several arguments heard in Illinois. However, the King County Superior Court ruled in favor of the tax in December 2015, finding it neither unconstitutional nor preempted by state statute, setting it up for the appeal now before the Washington Court of Appeals (248 DTR K-2, 12/29/15).
In the Dec. 22 decision, the superior court found the primary purpose of the tax was “to provide broad-based public benefits.”
“It does not place any burden or restriction on the plaintiffs in terms of their conduct other than to require payment of fees and it does not prescribe any activity other than the non-payment of the sums set forth in SMC 5.50.030(B),” the court said.
Seattle Councilman Tim Burgess, who sponsored the tax ordinance, agreed with the ruling.
“The purpose of the tax is to raise funds to be broadly used for research and prevention efforts, including youth employment,” Burgess told Bloomberg BNA in a July 19 e-mail. “At no time have we attempted to thwart or interfere with the sale or distribution of firearms.”
To contact the reporter on this story: Jennifer McLoughlin in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan Tuck at email@example.com
FBI Reports & Statistics are at https://www.fbi.gov/services/cjis/nics.
The Bureau of Alcohol, Tobacco, Firearms and Explosives report is at https://www.atf.gov/file/89561/download.
The 2012 Congressional Research Service report is at http://www.fas.org/sgp/crs/misc/RL32842.pdf.
The Illinois amended complaint is at http://src.bna.com/gRI.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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