Gun Rights Groups Welcome the Demise of Illogical and Constitutionally Dubious Federal Firearm Taxes
The taxes on sound suppressors, short-barreled rifles, and short-barreled shotguns, originally enacted in 1934, were meant to be prohibitive, imposing bans in the guise of raising revenue.
The One Big Beautiful Bill Act, which President Donald Trump signed into law last week, reduces the federal tax on transfers of firearm sound suppressors, short-barreled rifles, and short-barreled shotguns from $200 to zero. That tax, originally imposed by the National Firearms Act of 1934 (NFA), was meant to be prohibitive, amounting to about $4,800 in current dollars. Although inflation dramatically reduced the burden of the tax, gun rights groups welcomed its elimination as a blow against the first national gun control law, the history of which illustrates the logical and constitutional flaws of federal firearm regulation.
The NFA amendments are "the biggest blow to the National Firearms Act since its passage nearly a century ago," the National Rifle Association, the Firearms Policy Coalition, the Second Amendment Foundation, and the American Suppressor Association said in a joint statement. "Eliminating the excise tax on these NFA items," they added, removes "the heavy burden of an unconstitutional tax from the backs of hard-working Americans" and represents "a critical step towards our ultimate goal of dismantling the NFA once and for all."
Congress approved the NFA largely in response to a dramatic rise in the homicide rate, which peaked in 1933, the year that the National Alcohol Prohibition was repealed. That was no mere coincidence, the economist Milton Friedman argued in 1991, since Prohibition had created a new black market in which there was no peaceful way to resolve disputes, leading to shocking acts of violence such as the 1929 Saint Valentine's Day Massacre. Legislators also were alarmed by nationally notorious criminals such as the bank robber John Dillinger, whose name came up repeatedly during hearings on the NFA in the spring of 1934.
Since machine guns figured prominently in both kinds of violence, it is not surprising that they were the NFA's main target. But the original version of the bill went much further, imposing taxes and registration requirements on pistols and revolvers as well as machine guns. Legislators viewed concealable handguns as especially useful to criminals. And to prevent evasion of the de facto handgun ban, they also aimed to restrict rifles and shotguns with barrels shorter than 18 inches.
The logic of the latter provision was hard to follow after handguns were dropped from the bill in response to objections that including them would intolerably impinge on the constitutional right to armed self-defense. Nearly a century later, handguns are still overwhelmingly favored by armed criminals. But they are also, as the Supreme Court put it in the landmark Second Amendment case District of Columbia v. Heller, "the quintessential self-defense weapon." Rifles and shotguns of any sort, by contrast, rarely figure in homicides. But until last week, short-barreled versions were still subject to the same tax as machine guns.
The tax on machine guns remains in place, reinforced by a ban on civilian ownership of machine guns produced after 1986. But the One Big Beautiful Bill Act implicitly recognizes that putting short-barreled rifles and shotguns in the same category never made much sense.
The legislators who supported the NFA also perceived suppressors, which they misleadingly called "silencers," as inherently nefarious. As Reason's J.D. Tuccille notes, that reputation was doubly undeserved.
Contrary to the impression left by many crime and spy dramas, even suppressed gunfire is still quite loud. According to one summary of test results, "most civilian-accessible firearms emit sounds ranging from 140-175 decibels." So-called silencers "only marginally suppress a gun blast," reducing the noise level to between 120 and 150 decibels, meaning the sound typically "is still very obviously identifiable as a gun shot." But as Tuccille notes, that reduction provides an added margin of hearing protection. By removing the tax on suppressors, Congress recognized this legitimate use, which has nothing to do with assassins or mass murderers.
From a contemporary perspective, the legal justification for the NFA is just as puzzling as the products it covered. Although the law was clearly aimed at protecting public safety by restricting access to weapons and accessories that legislators viewed as conducive to violent crime, it was framed as a tax measure, enacted as part of the Internal Revenue Code. Like the early federal drug laws, the NFA ostensibly was all about raising money for the government. Toward that end, it imposed registration and tax requirements, violation of which triggered criminal penalties.
The NFA required suppliers of the covered products to register with the local "collector of internal revenue" and pay an annual occupational tax. It also imposed a $200 tax on transfers. To facilitate collection of that tax, the NFA required current owners to register with the Bureau of Internal Revenue and report any subsequent transfers. The law made it a federal offense to carry a covered weapon across state lines unless it was registered.
During House hearings on the bill, Attorney General Homer S. Cummings noted that the federal government "of course" had "no inherent police powers to go into certain localities and deal with local crime." Rather, "it is only when we can reach those things under the interstate commerce provision, or under the use of the mails, or by the power of taxation, that we can act."
Cummings explained how "the power of taxation" worked in this context: "If we made a statute absolutely forbidding any human being to have a machine gun, you might say there is some constitutional question involved. But when you say, 'We will tax the machine gun,' and when you say that the absence of a license showing payment of the tax has been made indicates that a crime has been perpetrated, you are easily within the law."
Four years later, Congress dispensed with the tax pretense. The Federal Firearms Act of 1938 (FFA) instead relied on the congressional power to regulate interstate and foreign commerce, which the Supreme Court would eventually read as a license for pretty much anything Congress wanted to do.
The FFA explicitly sought to "regulate commerce in firearms," and not just incidentally. It created a licensing system for gun manufacturers, importers, and dealers, making it illegal to "transport, ship, or receive any firearm or ammunition in interstate or foreign commerce" without a federal license.
The FFA also relied on the Commerce Clause in a more dubious way, making it illegal for anyone who was "a fugitive from justice" or had been convicted of "a crime of violence" to "receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce." It treated possession as "presumptive evidence" of receipt.
That provision, which Congress expanded in 1961 to cover people convicted of nonviolent crimes punishable by more than a year in prison, created a precedent for the broad categories of "prohibited persons" established by the Gun Control Act of 1968, which were further expanded by subsequent legislation. The official aim of the 1968 law was to "provide for better control of the interstate traffic in firearms" and thereby "provide support to Federal, State, and local law enforcement officials in their fight against crime and violence."
The Gun Control Act retained the language about receiving a gun supplied through interstate commerce, which on its face would not include a firearm that never crossed state lines. But in 1986, Congress changed that provision to cover possession (not just receipt) of a gun "in or affecting commerce," further straining the already tenuous connection to an enumerated power.
You might think an essentially meaningless phrase like that has no real import. But according to federal courts, such boilerplate is constitutionally crucial.
In the 1995 case United States v. Lopez, the Supreme Court ruled that Congress had exceeded its power to regulate interstate commerce when it passed the Gun-Free School Zones Act of 1990, which made it a felony to possess a firearm within 1,000 feet of a school. "The Act neither regulates a commercial activity nor contains a requirement that the possession be connected in any way to interstate commerce," Chief Justice William Rehnquist wrote in the majority opinion. "If we were to accept the Government's arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate." Rehnquist also noted that the law "contains no jurisdictional element which would ensure, through case-by-case inquiry, that the firearm possession in question affects interstate commerce."
The following year, Congress responded by amending the law to specify that it applied only to "a firearm that has moved in or that otherwise affects interstate or foreign commerce." As Congress saw it, however, even a gun that is made and sold in the same state where it is possessed "affects interstate or foreign commerce," given the cumulative impact that bringing guns into school zones has on "a pervasive, nationwide problem."
The U.S. Court of Appeals for the 8th Circuit thought Congress had cured the problem identified by Rehnquist. Because the law "contains language that ensures, on a case-by-case basis, that the firearm in question affects interstate commerce," the appeals court ruled in 1999, it is "a constitutional exercise of Congress's Commerce Clause power." The U.S. Court of Appeals for the 9th Circuit concurred in 2005, noting that "incorporating a jurisdictional element into the offense has traditionally saved statutes from Commerce Clause challenges."
Congress, in short, initially forgot that it was supposed to be regulating "interstate or foreign commerce." But after the Supreme Court reminded it, the invocation of that phrase was enough to fix the law, even though nothing of substance had changed.
In addition to the issue of whether federal firearms restrictions are consistent with the Second Amendment, in other words, the NFA and its progeny raised the question of where Congress gets the authority to regulate these products in the first place. The NFA began a pattern of dodging that obstacle by stretching enumerated powers to encompass crime-fighting measures of the sort that had long been understood to be within the powers reserved to the states under the 10th Amendment.
