Old McDonald Pays a Tax, If He Wins in Court (a Gun Tax, That Is)

March 5, 2010

With all the news stories about gun rights — the court battle between the City of Chicago and Otis McDonald and the carry-in service at Starbucks — here’s a reminder of how guns are taxed. The standard taxes on pistols, revolvers, etc. are collected at the distributor level. Each gun carries either a 10% or 11% tax, administered by the Tax and Trade Bureau at the Treasury Department.

The IRS reports collections of $312 million during fiscal year 2008 (10/1/07 – 9/30/08) on line 152, column V of this spreadsheet.

NFA transfer taxes (paid by the individual when he acquires a machine gun, short-barreled rifle, etc.) are administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives. That payment is generally $200 plus some administrative rigamarole that enables local officials to delay and track transfers. See pp. 185-190 of the Federal Firearms Regulations Reference Guide.

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