Second Amendment Roundup: The Zero Tax on NFA Firearms

The $0 tax on firearms undercuts the constitutional basis of the National Firearms Act.

The National Firearms Act, chapter 53 of the Internal Revenue Code, finds its basis in U.S. Const. Art. I, § 8, under which "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises…."  It imposes special occupational taxes for businesses and making and transfer taxes on individual firearm transactions.  It is unlawful for a person "to receive or possess a firearm which is not registered to him in the National Firearms Registration and Transfer Record," 26 U.S.C. § 5861(d), perhaps the most typical violation.

A "firearm" under the NFA includes eight categories, including short-barreled shotguns and rifles (and weapons made from shotguns and rifles under 26" overall length); "any other weapon" (small guns other than handguns); machineguns, silencers, and destructive devices.  § 5845.  Under H.R.1 – One Big Beautiful Bill Act of 2025, as reported by the Senate Finance Committee on June 16, 2025, § 5845 would have been amended to state: "The term 'firearm' means a machinegun or a destructive device."

As a reconciliation bill, H.R. 1 was subject to the Byrd Rule, under which an amendment is extraneous if it does not produce a change in outlays or revenues.  As I argued here, the bill would have complied because it produced a change in revenues by eliminating certain firearms as taxable.  The Senate parliamentarian opined otherwise.  The final version as passed did not change the definition of "firearm" at all, and instead amended the making and transfer taxes on all NFA firearms except machineguns and destructive devices to $0.

Before the amendment, the making and transfer tax was $200 per firearm (or $5 for "any other weapon").  While the tax is now zero on most firearms, one must still register each firearm and obtain ATF's authorization before making and transferring it.  Without any tax being imposed, the rug has been pulled out from the constitutional basis of the NFA.

In Sonzinsky v. U.S. (1937), the Supreme Court held that the NFA contained "no regulations other than the mere registration provisions, which are obviously supportable as in aid of a revenue purpose."  And in Haynes v. U.S. (1968), the Court described the National Firearms Act as "an interrelated statutory system for the taxation of certain classes of firearms."  Upholding Obamacare under the tax power in National Federation of Independent Business v. Sebelius (2012), Chief Justice Roberts cited Sonzinsky, writing that "we have upheld such obviously regulatory measures as taxes on … sawed-off shotguns."

Under H.R. 1, no revenue purpose is left for any of the firearms other than machineguns and destructive devices.  Requiring these other firearms to be registered produces zero in taxes, no different than firearms that are not included in the NFA.  The bill becomes effective on January 1, 2026.  Lacking any jurisdictional hook in the tax power or other constitutional delegation, it will be difficult to prosecute offenses for unregistered firearms (other than machineguns and destructive devices) possessed or transferred on and after that date.

Civil challenges have already commenced.  A complaint filed in the Eastern District of Missouri, Chris Brown v. ATF, challenges the pertinent provisions of the NFA not only on the lack of Congressional power under the revenue clause, but also challenges the restrictions on suppressors and short-barreled rifles under the Second Amendment.  Suppressors and short-barreled rifles pass the Heller test by being arms in common use, and NFA-type restrictions do not pass the Bruen text-history test.  Plaintiffs also include the NRA, Firearms Policy Coalition, Second Amendment Foundation, and American Suppressor Association.

Missouri is in the Eighth Circuit, which in U.S. v. Hall (1999) upheld the NFA under the taxing clause, but rejected an argument that the commerce clause would be a constitutional basis for the NFA.

A second challenge, Silencer Shop Foundation v. ATF, has been filed in the Northern District of Texas.  It is based solely on the lack of Congressional power to require firearm registration without any basis in the tax power.  Gun Owners of America and Firearms Regulatory Accountability Coalition are among its plaintiffs.

As long ago as U.S. v. Matthews (1971), the Fifth Circuit relied on Sonzinsky to uphold NFA provisions.  Not surprisingly, all circuits have rendered similar decisions.

I've covered these issues in detail in my article The Power to Tax, The 2nd Amendment, & the Search for Which "'Gangster' Weapons" To Tax.  From its inception in 1934, the NFA has been justified solely under the power to tax.

Based on the plain text of the constitutional power of Congress "to lay and collect Taxes" and the consistent Supreme Court precedents on the NFA, the Department of Justice should agree with the pertinent allegations of the above complaints and enter into consent decrees with the plaintiffs to the effect that the NFA may not be applied to any firearms other than machineguns and destructive devices, which remain subject to the tax.

Recognition that the NFA restrictions may no longer be applied to firearms (other than machineguns and destructive devices) does not leave these firearms unregulated.  All of them are still covered under Title I of the Gun Control Act, which subjects dealer sales to the NICS background check system, bans possession by felons and other categories of prohibited persons, and otherwise comprehensively regulates firearms.

Comments

[Brett Bellmore]

The challenge with these gun law cases isn't proving the law is unconstitutional, it's persuading judges to care.

[Charles Eldred]

For more about the National Firearms Act as a tax, see my article “The National Firearms Act is an Unconstitutional Tax,” available at

https://scholarship.law.uwyo.edu/cgi/viewcontent.cgi?article=1516&context=wlr

Short version: An exercise of the Taxing Power includes both the power “to lay and collect Taxes, Duties, Imposts, and Excises” and the power to adopt “attendant regulations in aid of a revenue purpose” under the Necessary and Proper Clause. But, I argue, several provisions of the NFA do neither, such as the application requirement, which is simply a regulation and raises no money. I also argue that the making tax and the occupation taxes are unconstitutional unapportioned direct taxes.

[Brett Bellmore]

The regulations were upheld as necessary to implement the tax, much like the withholding and reporting requirements of the income tax. But the fact does remain that they were, expressly, declared to be constitutional only as part of a tax collection scheme.

Now, in US v Rock Island Armory, it WAS ruled at the circuit level that the NFA was unconstitutional as applied to any arm that the government refused to accept the tax payment for.

The problem is that since the NFA was originally adopted, the Court has transformed the commerce clause into a general regulatory power, and subsequent gun laws are NOT tax based. And Roberts has a nasty tendency to say "no harm, no foul" to laws that are unconstitutional as written, but which he thinks could have been constitutional if based on a different clause of the Constitution.

So I see at least 4 guaranteed votes to uphold the NFA anyway, and expect it would actually come out 6-3, or maybe 7-2. Really, the only votes I'm reasonable confident are Thomas and Alito.

[Poxigah146]

Correct. The entire GCA is predicated on the idea that possessing a firearm "affects" interstate commerce.

By that ridiculous logic, there's nothing the federal government can't regulate, and even most "conservatives" are not willing to upend that.

[Michael Ejercito]

Has the GCA been upheld against a Tenth ASmendment challenge on the basis of the Commerce Clause?

[Brett Bellmore]

Trying to imagine the least likely to work Supreme court challenge possible?

[ReaderY]

I think Brett’s point is mostly correct here. However, Lopez is still relevant because it stands for the proposition that Congress has to enact an interstate commerce nexus and if it doesn’t a statute can be struck down. That doesn’t require very much - Congress just has to say some magic words when it enacts a statute. But if the NFA doesn’t happen to say the magic words, then Mr. Halbrook’s position might still win.

[Bubba Jones]

Refusing my NFA application to pay a $200 tax on the making of a new "machine gun" is certainly not in aid of a revenue purpose.

[Longtobefree]

"The $0 tax on firearms undercuts the constitutional basis of the National Firearms Act."

Funny, the second amendment eliminates the basis for the NFA, bit the courts don't care.

[Longtobefree]

Bit = but

(butt = auto-correct)

[Poxigah146]

Who cares? The blue states will independently ban these things, and they'll justify it under Bruen that it's part of the historical tradition of maintaining safety.

Fuck these traitors

[Frank Drackman]

Without the artificial limiting of Transferable Machineguns to those that were registered on May 19, 1986, the legally owned M-16 that’s now worth $50,000 would be maybe $750, depending on the manufacturer.
On the brighter side, more owners of these would actually shoot them

Frank

[Brett Bellmore]

I suppose. I doubt full auto would become very popular, (Fun, but way too expensive!) but select fire would probably already be standard on semi-auto firearms if not for federal regulations treating it as being a machine gun.

[Frank Drackman]

Not to Pick Nits, but "Select Fire" IS a machine gun, at least when you select that option

[Brett Bellmore]

Yes, but I meant select between single shot and 3 round bursts. 3 round bursts are much more practical than full auto, especially for a handgun.

[Incunabulum]

Select fire is another word for full auto - it just allows to to select between that and single-shot.

But everything would have a giggle-switch if it weren't illegal;)

[Bubba Jones]

The NFA is an unconstitutional infringement of the 2nd Amendment.

If Texas wishes for all able bodied People to have the option to purchase and train on select fire weapons, then the Federal Government should not be allowed to impede this.

A $200 tax might be excusable, but a refusal to accept the $200 tax, and therefore deny the purchase, is not.

This is quite obviously not the least intrusive method to collect $200.

[Kazinski]

I question this:

" It is based solely on the lack of Congressional power to require firearm registration without any basis in the tax power."

I think there is basis for tracking firearm ownership under the Article 1 militia clause. If Congress were to take seriously its responsibility to arm the militia, then a registry of who owns what kind of firearm would be needed.

By the way, Congress has not sent me my AR yet.

[Incunabulum]

If the government wishes to arm the militia would need to provide the arms - irrespective of the arms that may already be possessed.

So the government still has no need to know what arms a citizen has. The furthest you could stretch this is a requirement that if you had at least one of a class and caliber of weapons then you might be required to affirm that and update the government if you got rid of it.

But since the weapons allowed to non-government civilians is limited to semi-automatics and you'd only care for parts and ammo logistics, they only thing the government should care about is if you do or do not have at least one AR-15 - and only the milspec ones, not the bougie piston-operated or more exotic types.

[dwb68]

Under footnote 9 of Bruen, a licensing scheme that is not unduly burdensome (and is not discretionary) is constitutional (read it!).

Without the tax, NFA is just a licensing scheme. Given that form 4 approvals are now electronic and down to 2 weeks, it's hard to argue NFA is unduly burdensome.

There is a substantial chance these lawsuits backfire: If they establish that NFA registration is not unduly burdensome, then the left will simply expand the NFA to include all semi-autos with SBRs with a 0$ tax.

The Supreme Court will not strike down NFA. The pope will have triplets before that happens.

[Brett Bellmore]

Sadly, I tend to agree. The present Court is not particularly bothered by infringement of this right, they don't see their job as fully upholding it, just policing outlier jurisdictions that try to completely extinguish it.

[Aubrey LaVentana]

Under footnote 9 of Bruen, a licensing scheme that is not unduly burdensome (and is not discretionary) is presumptively constitutional.

States effing around with costs, delays, processes, et cetera, can undermine that presumption.

[Kazinski]

The Supreme Court doesn't want to reverse any of its own precedents on the 2nd, and Miller kind of sort of upheld the NFA.

But registration is not a 2nd amendment issue if it doesn't infringe on the RKBA, Article 1 gives Congress that power:

"To provide for organizing, arming, and disciplining, the Militia"

If Congress thinks it needs to know what the unorganized Militia is currently armed with to organize and arm them for service, then the courts will not second guess that judgement, as long as it isn't plainly aimed at infringement.

[wvattorney13]

This isn't a Second Amendment issue. It is a federalism issue. The NFA does not pretend to use the commerce clause. If it did, it would almost certainly be upheld under the current jurisprudence.

It claims its legitimacy as a tax. As the article notes, that can't really stand anymore when the tax is $0. Per Roberts in the ACA case, the function of a tax is that it must raise some revenue. Paperwork in aid of raising no money cannot be said to be a needed administrative step in collecting the tax. Previously it could.

I think that could be transplanted into the new machine gun category. As the feds don't want to raise money and won't accept my tax payment for a new machine gun, that regulation cannot be justified as a tax either.

[dwb68]

Unfortunately the government gets to change its mind about how to defend a statute, so they certainly could claim commerce clause.

[wvattorney13]

Well, maybe. If they try to retcon this as a commerce clause law then they have the Lopez problem. The law does not limit itself to guns travelling in or affecting commerce nor is there any statement of purpose---the flaws that the law in Lopez had.

It would be even worse for this law as it was particularly designated as a tax whereas the law in Lopez had no jurisdictional hook attached so one could infer commerce as the dissenters did.

[Brett Bellmore]

The Lopez problem was that they'd neglected to insincerely claim the jurisdictional hook, not that the Court rejected it. The gun free school zone act has never been back to the Court, so far as I know, but instead has been carefully preserved against accidentally creating test cases.

That said... Why is it only the anti-gunners who can create ideal test cases? With an at least nominally pro-gun President available to pardon if things went wrong, and able to command the DOJ to prosecute some nice guy who volunteers, why aren't WE teeing up one test case after another, to challenge dubious laws?