Firearms Industry Seeks Pro-Growth / Pro-Conservation Remedy to Tax Code
Newtown, Connecticut -- America's leading firearms manufacturers sent a letter to Sen. Max Baucus (D-Mont.) yesterday seeking his support in rectifying a longstanding inequity in the Internal Revenue Code (IRC) regarding the firearms and ammunition excise tax (FAET) -- a tax used to fund wildlife conservation in America. The correction being sought would improve conservation efforts through increased industry growth while bringing fairness and equity to the tax-payment schedule.
The concern that manufacturers have posed to Sen. Baucus is specifically rooted in the timing of the tax collection, not the amount of the tax collected (11 percent on long guns and ammunition and 10 percent on handguns). Currently, firearms manufacturers must pay FAET bi-weekly as opposed to the quarterly taxes paid by other industries that also support conservation. This payment schedule forces many firearms manufacturers to borrow money to ensure on-time payment, and industry members spend thousands of man-hours administering the necessary paperwork to successfully complete the bi-weekly payments -- monies that are due long before manufacturers are paid by their customers.
"We have been working hard to change the timing of when the FAET is collected," said Robert L. Scott, chairman of the Board of Governors of the National Shooting Sports Foundation (NSSF) -- the trade association of the firearms industry. "By shifting to quarterly payments, like every other industry, many firearms manufacturers would not be forced to borrow money from banks, thus incurring significant financing charges -- in essence, a hidden tax."
NSSF estimates that just shifting to a quarterly payment schedule will free up approximately $22 million dollars annually for manufacturers to invest in new plants and equipment, new product designs and increased marketing to encourage greater participation in hunting and the shooting sports.
"A financially strong and growing firearms and ammunition industry will generate greater excise tax revenues that are used to fund conservation throughout the United States," commented Lawrence G. Keane, NSSF senior vice president and general counsel. "This shift would help manufacturers remain competitive in an increasingly global economy."
In their letter to Sen. Baucus, executives from America's leading firearms and ammunition manufacturers noted that just since 1991 alone the industry had contributed over $3 billion dollars to wildlife conservation through excise tax payments.
"The fact that our industry has given back so much -- over $3 billion dollars in just the last 15 years -- demonstrates our industry's strong commitment to conservation," said Keane. "As the world's foremost conservationists, hunters understand, perhaps better than anyone else, the importance of conserving resources and protecting our environment. We remain hopeful that with the help of leaders like Sen. Baucus, our industry will be able to contribute even more to conservation efforts," concluded Keane.
The concern that manufacturers have posed to Sen. Baucus is specifically rooted in the timing of the tax collection, not the amount of the tax collected (11 percent on long guns and ammunition and 10 percent on handguns). Currently, firearms manufacturers must pay FAET bi-weekly as opposed to the quarterly taxes paid by other industries that also support conservation. This payment schedule forces many firearms manufacturers to borrow money to ensure on-time payment, and industry members spend thousands of man-hours administering the necessary paperwork to successfully complete the bi-weekly payments -- monies that are due long before manufacturers are paid by their customers.
"We have been working hard to change the timing of when the FAET is collected," said Robert L. Scott, chairman of the Board of Governors of the National Shooting Sports Foundation (NSSF) -- the trade association of the firearms industry. "By shifting to quarterly payments, like every other industry, many firearms manufacturers would not be forced to borrow money from banks, thus incurring significant financing charges -- in essence, a hidden tax."
NSSF estimates that just shifting to a quarterly payment schedule will free up approximately $22 million dollars annually for manufacturers to invest in new plants and equipment, new product designs and increased marketing to encourage greater participation in hunting and the shooting sports.
"A financially strong and growing firearms and ammunition industry will generate greater excise tax revenues that are used to fund conservation throughout the United States," commented Lawrence G. Keane, NSSF senior vice president and general counsel. "This shift would help manufacturers remain competitive in an increasingly global economy."
In their letter to Sen. Baucus, executives from America's leading firearms and ammunition manufacturers noted that just since 1991 alone the industry had contributed over $3 billion dollars to wildlife conservation through excise tax payments.
"The fact that our industry has given back so much -- over $3 billion dollars in just the last 15 years -- demonstrates our industry's strong commitment to conservation," said Keane. "As the world's foremost conservationists, hunters understand, perhaps better than anyone else, the importance of conserving resources and protecting our environment. We remain hopeful that with the help of leaders like Sen. Baucus, our industry will be able to contribute even more to conservation efforts," concluded Keane.
