Tax the sale of guns and ammo? Voters in this state are set to decide.
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A ballot measure in Colorado is the only one on guns before voters this year. The effort is part of a broader trend to expand excise taxes.
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This year promised to be the biggest year for gun reform on the ballot ever. When The Trace, an investigative news outlet that focuses on guns and crime, analyzed state election filings in January, it found 13 initiatives in four states. But all those efforts failed. Come November, only one state will vote on guns: Colorado.
Voters there will be asked to approve a proposed 6.5% excise tax on firearm and ammunition sales. Unlike the citizen-led initiatives that failed, this measure was approved by lawmakers. Gov. Jared Polis signed it in June, but because certain increases to state revenue have to be OK’d by voters, it goes to the ballot. If approved by a simple majority, it would go into effect in April.
The bulk of the generated revenue, an estimated $39 million a year, would go to the Colorado Crime Victim Services Fund, which helps provide attorneys, temporary housing, and physical exams for domestic violence survivors and victims of other crimes. Smaller amounts would go to fund veteran mental health services, youth crisis response services and school safety.
“We want a way to sustain these services,” state Sen. Janet Buckner, the bill’s sponsor, said on the Senate floor in May. “These are not small things—these are things that save lives. We must meet this need and we have found a way through this bill.”
If voters say yes to the measure, Colorado would be the second state to tax the sale of guns and ammunition sold in the state. California is the only state to currently do so. Signed into law by Gov. Gavin Newsom last year, the tax went into effect on July 1. At least three municipalities also tax firearm sales: Seattle and Tacoma, Washington, and Cook County, Illinois. And there is already a federal tax on firearms of 10% or 11%, depending on the type of weapon.
Since California enacted the excise tax, six other states have introduced similar bills. In addition to Colorado, Massachusetts, New Mexico, New York, Vermont and Washington have considered taxing the gun industry to support hospitals, violence intervention and prevention programs, and services and compensation for victims of gun violence, reported by The Trace.
Efforts to tax firearms and ammunition sales are part of a larger trend to apply excise taxes to more products and activities, according to Adam Hoffer, director of excise tax policy at the Tax Foundation. In recent years, states have expanded the tax to cannabis and sports betting.
Nationwide, excise taxes make up on average 11% of total state and local tax collections. Typically, excise taxes like those on alcohol and cigarettes are often referred to as “sin taxes,” with the intent of reducing consumption. The revenue generated is used to address the harms the product creates.
“The rule of thumb is, ‘If you tax something, you’ll get less of it,’” Hoffer said. “It’s a very good rule of thumb. Excise taxes are intended to reduce consumption or production.”
But in the case of the excise tax on guns and ammo, supporters are framing it more as a user tax similar to gas taxes that are levied to maintain and repair roadways.
In Maryland, where the effort to tax the sale of firearms failed this summer, proponents of the bill argued that gunshot victims are a major cost to the trauma system, and said that the tax is a fair way to get the system more money. State Sen. Sarah Elfreth likened the tax to vehicle registration fees that drivers must pay.
“I don’t plan on getting in a car accident, and I don’t plan on causing one, and I don’t think anyone on this floor does,” Elfreth said on the Senate floor in March. “But I know that the funds […] are going to go to having the best trauma system in the world.”
Indeed, a 2021 report from researchers at the RAND Corporation found that while “several states and localities have imposed special taxes on firearms and ammunition, these have typically been used to generate revenue, not as a strategy for reducing access to firearms or limiting gun crimes.”
Even if that was the intention, “there is little empirical evidence to indicate how taxation would influence firearm-related outcomes, such as violent crime, suicide, self-defense, or sales of firearms,” researchers said.
Hoffer predicts that more states will follow California’s lead. “Firearms and ammunition taxes are on our radar,” he said. “This is an issue we will follow closely. The likely result is that we will see more of these types of excise taxes.”
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