Spike in gun sales brings added revenue to state coffers

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By DOUG SMITH

Minneapolis Star Tribune

A rush by Americans to buy firearms and ammunition in recent months has been a financial windfall for gun and ammo makers and sellers -- but it also will send a flood of money to state natural-resources departments.

That's because a federal excise tax on guns, ammo and archery equipment is returned to states for wildlife projects and hunter education.

All told, the recent surge in sales of guns and ammo means the federal program will send a record $555 million back to states in 2013 -- well above the $388 million distributed last year or the previous record of $474 million in 2010.

But even that 43 percent increase in tax revenue in the past year doesn't reflect the flood of gun and ammo sales that has occurred since the election in November, the Newtown, Conn., shootings in December or the gun restriction proposals issued this month by the Obama administration.

Tax receipts for October, November and December won't be known for months, but based on media reports of skyrocketing gun sales, tax revenue under the excise tax could be even higher next year.

While tax revenues for guns, ammo and archery equipment have risen slowly over the past 30 years, there's no question the surge in gun and ammo sales in recent years -- evidently prompted by concerns that tighter gun restrictions could be coming under the Obama administration -- has fueled the recent large rises.

"The really big bumps started in 2008," said Jim Hodgson, chief of Wildlife and Sport Fish Restoration for the U.S. Fish and Wildlife Service office in Minneapolis. "Guns and ammo sales are definitely driving it."

Consider:

-- Nationally, taxes from handgun sales jumped from about $73 million in 2007 to $160 million in 2012 -- a 117 percent increase over five years.

-- Taxes from rifles, shotguns and other firearms jumped from $116 million in 2007 to $179 million in 2012 -- a 54 percent increase.

-- Taxes on archery equipment increased from $36 million in 2007 to $44 million last year -- a 22 percent increase.

Meanwhile, a similar excise tax on fishing equipment and marine gas (the Dingell-Johnson Act) is up just 7 percent from last year to $668 million -- and is down 3.8 percent from 2007. Money from that program goes back to the states for fish restoration.

Under the Pittman-Robertson Act, named for its congressional authors in 1937, handguns are taxed 10 percent and other firearms, including rifles, shotguns and muzzleloaders, are taxed 11 percent. Ammunition and archery equipment also is taxed 11 percent. The manufacturers pay the tax upfront but generally pass it on to consumers.

The federal dollars are distributed to states based on geographical size of a state and number of registered hunters.

The Pittman-Robertson and Dingell-Johnson programs also protect hunting and fishing license dollars from being diverted by states for other uses -- say for roads or bridges. If states do so, they are ineligible to receive the federal aid.

"It's a major incentive for states not to divert hunting and fishing license dollars," said Ed Boggess, director of the fish and wildlife division of the Minnesota Department of Natural Resources.

(Reach Doug Smith at doug.smith@startribune.com. Distributed by Scripps Howard News Service, shns.com.)

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