California New Tax Law: Ammo & Guns - July 1, 2024

Governor Gavin Newsom Signs a Hefty Tax on Firearms: What to Expect

California's Governor Gavin Newsom recently made waves by signing into law a significant tax increase on firearms and ammunition. This controversial move is expected to have substantial consequences across the state. This article provides an overview of this new tax, what led to its implementation, and the potential impact it may have on consumers and retailers and our Second Amendment.

A Brief History of the Federal Ammunition Excise Tax

The U.S. has been imposing a Federal Ammunition Excise Tax (FAET) since 1919, making it a cornerstone of American tax legislation for over a century. Administered by the Alcohol and Tobacco Tax and Trade Bureau (TTB), the tax percentage is contingent on the type of firearm or ammunition. To elaborate, a 10% FAET is applied to the manufacturer's price for handguns like pistols and revolvers, while an 11% tax is applied to other portable firearms, shells, and cartridges. It is crucial to clarify that this levy pertains solely to firearms and ammunition that are manufactured for domestic consumption.

The Details of Assembly Bill 28

On September 26, 2023, Governor Newsom authorized a game-changing law - Assembly Bill 28. This law mandates an additional state excise tax of 11% on retail purchases of guns and ammunition in California, beginning July 1, 2024. This added tax comes on top of the already existing federal FAET. In effect, Californians will see the tax on firearms and ammunition purchases practically double from the previous rate. The implications of this law are extensive and have stirred up a substantial debate on both state and national levels.

The Impact on Gun Retailers and Consumers

The ripple effect of the newly signed Assembly Bill 28 will be felt strongly by gun retailers and consumers in the Golden State. Retailers are bracing for the possibility of lower sales as the steep tax increase could act as a deterrent for potential buyers. These high costs may cause a substantial shift in consumer behavior. Those who purchase after July 1, 2024 will have to grapple with the burden of a significantly higher price tag for their firearms and ammunition. This price hike could result in a decline in activities like hunting, target shooting, and self-defense. The economic strain may be particularly challenging for low-income residents, making firearm ownership potentially unaffordable. With the law coming into effect on July 1, 2024, retailers and consumers will have to navigate this new landscape, dealing with the far-reaching implications of this tax increase on their businesses and daily lives. This tax hike is a critical part of the ongoing gun control debate, with its impact on the industry and individual rights at the center of the controversy.

A Look at What's Next

The countdown to the enforcement of Assembly Bill 28 has begun, with the additional 11% tax on firearms and ammunition taking effect on July 1, 2024. As this date approaches, the discourse surrounding the legislation is expected to remain heated. Critics argue that the tax hike not only infringes on Second Amendment rights but also holds the potential for negative economic repercussions.

Sources

• NPR
  
• AP News
  
• CPA Practice Advisor
  
• Duke Center for Firearms Law