Law

Excise Tax On Firearms And Ammunition

Excise tax is sometimes called a duty of special excise tax. It is an inland tax on the sale, or production for sale, of specific goods or a tax on a good produced for sale, or sold, within a country or licenses for specific activities. The “excises” are distinguished from customs duties, which are taxes on importation. It is an indirect tax, in which the producer or seller who pays the tax to the government is expected to try to recover or shift the tax by raising the price paid by the buyer. Most of the excise taxes are typically imposed in addition to another indirect tax such as a sales tax or value added tax.

A Brief Background

The Excise Tax on Firearms and Ammunitions was first imposed on February 25, 1919 under the Section 4181 of the Internal Revenue Code which imposes an excise tax on imported firearms and ammunition when the importer sells or uses the firearms or ammunition. Firearms and Ammunitions Excise Tax (FAET) states that a tax of 10 percent of the sales price is imposed on pistols and revolvers while a tax of 11 percent of the sales price is imposed on other portable weapons such as rifles and shotguns.The excise tax is not imposed again unless the firearms and ammunition are further manufactured. During some time, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was responsible for collecting FAET. This changed in January 2003; this responsibility was rested with the Alcohol and Tobacco Tax and Trade Bureau (TTB).

Who Is Liable For FAET?

Most of the time, the person who causes and directs the importation of the firearms and/or ammunition will be liable for the FAET. As per the purposes of FAET, the importer is any person who imports firearms or ammunition such as shells or cartridges into the country.

Are There Exemptions?

In some cases, there would be situations when exemptions would be allowed. The examples of exemptions may be obtaining the list from the local government or direct inquiry in the Bureau of Internal Revenue.

Whether a firearm is used responsibly or irresponsibly is totally dependent upon the user. These tax laws are meant to compel careful shooters, who pride themselves on lawful and safe gun handling, to subsidize not only careless shooters, but those who intentionally prey upon others with guns which are being used illegally. It is an entirely inversion of responsibility. Many illegal gun users are habitual criminals, mentally defective or drug abusers, all of whom are already legally prohibited from owning firearms. These taxes amounts to a form of “absolute liability” on the part of firearms manufacturers for any use of their products, in assurance that the product is free from defect. In conclusion, basically, excise tax on firearms and ammunitions should be imposed properly, to avoid untoward incidents. Meanwhile, firearms and ammunitions owners should also do their part in ensuring that they comply with the regulated laws.