Ted Noel is a retired anesthesiologist and Second Amendment student. This post is based on a presentation at our October 2024 conference on the National Firearms Act.
Property theorists debate several approaches to the concept of property ownership. Parsing out all the philosophical arguments yields a key central point. Legal ownership defines an asset as the possession of an item of whatever kind by the lawful owner against non-consensual takings. Such a title to private property may also be described as a “right of disposal.”
This element of abusus has been understood at least since Justinian’s Institutes. If I complete the purchase of an object by paying the seller, that object is now mine. I can do any lawful act with it as long as that act does not impinge on the rights of another. I may enhance or destroy it. And, if I so please, I may sell it to another without seeking permission of anyone other than the new purchaser. John Adams is quoted as saying, “Property must be secured or liberty cannot exist.” This has been echoed by the Supreme Court, and is a key foundational premise of the Fourth and Fifth Amendments.
You paid the “purchase” price for that beautiful short-barreled rifle (SBR) and the “NFA tax.” You waited through the BATFE delay in approving your paperwork, and now that “BoomBox” is in your hands. You may think that you own it, but you actually don’t.
The “purchase” price you paid covered the cost of manufacturing and distribution through the chain of commerce. Were you buying a coat or a baseball bat, that would be the end of the discussion. You’d own the item. You have the right to dispose of that coat or bat in any lawful manner. But at the moment you “purchased” that SBR, the federal government interposed itself with a $200 exaction commonly called the “NFA tax.”
The “NFA tax” looks a lot like a sales tax, but it has key differences. First, it must be paid regardless of whether ATF approves or denies the transfer of the SBR to you. If the bureaucracy thumbs its nose at you, you’re still out $200. This is the first hint that the “NFA tax” is not a tax. It’s an application fee. But one must ask just what the “purchaser” is applying for. The answer is found in the original testimony of Attorney General Homer Cummings during the lead-up to adoption of the NFA.
“…when you say “[w]e will tax the machine gun” and when you say that “the absence of a license showing payment of the tax has been made indicates that a crime has been perpetrated[,]” you are easily within the law.” (emphasis added)
Cummings’ language is telling. That $200 is an application for a license for custody (not ownership) of the SBR. You are mandated to produce the license on demand from an agent of the federal government. If you are not able to present the paperwork when required, there are legal consequences. In many ways, that NFA registration is very similar to a Driver’s License. It is a permit issued by the sovereign to the citizen allowing that citizen to exercise a privilege. If I wish to travel to another state with my SBR, unlike my driver’s license which is honored reciprocally, I have to get permission from BATFE. Thus, while the right to keep and bear arms is guaranteed by the Second Amendment, NFA turns it into a tightly licensed privilege, negating the Constitution.
Perhaps the most critical feature of the “NFA tax” is that even though you paid it, if you choose to “sell” the SBR, the person “buying” it must go through the same licensing process you did. In other words, you were licensed to have limited physical possession until you choose to relinquish your license. You never get your license fee back, and you do not own that SBR because you do not have the right of disposal.
At this point, it is rational to argue that the statute calls the fee a “tax.” But, as discussed above, it is nothing of the sort. If it were an excise, the payment would satisfy any government interest in the SBR. You would not have to wait for approval, and would have the right to dispose of your SBR. Further, the Supreme Court has clearly stated that it is the characteristics of the involved exaction that identify a tax. The Obamacare “penalty” was collected “by the IRS through the normal means of taxation… the plaintiffs could not challenge the individual mandate until after they paid the penalty.”
The “NFA tax” is collected by the BATFE, and then remitted to the Treasury. This bypasses the IRS, which is the ordinary agency for collection of taxes. Further, there is no straightforward process for a refund of the “tax.” In fact, the statute does not include any such mechanism. Because of these key differences from a tax, the NFA exaction is not a tax. So, just as Chief Justice Roberts declared the Obamacare “penalty” to in fact be a tax, the Supreme Court ought to declare the “NFA tax” to be a “firearm license fee.”
Because the “NFA tax” is a license fee, we find ourselves with a serious constitutional question. Assuming the statutory language governs, we start with, “By what authority can a constitutional right be taxed?” The short answer is that it can’t.
Harper held that “conditioning of the right to vote on the payment of a fee or tax violates the Equal Protection Clause of the Fourteenth Amendment.” Since voting is a fundamental right in the Constitution, just like those in the First and Second Amendments, those other rights are similarly protected from taxation. It is of interest that the poll tax in Harperwas $1.50, equivalent to $9.37 in 2023 dollars. The $200 NFA tax far exceeds that amount. Murdock held, per that case’s syllabus, that “The flat license tax here [on religious activity] involved restrains in advance the Constitutional liberties of press and religion, and inevitably tends to suppress their exercise.” Minneapolis Star held that a special use tax on paper and ink used by newspapers “violates the First Amendment.”
The only “free exercise” Amendment not present in this list is the Second. It is inescapable that if the Second Amendment is taxed, it is converted from a right into a privilege. This is not permissible. But what is the case if, as argued above, the “NFA tax” is actually a license fee, and prevents the SBR holder from actually owning the weapon?
A license is “a permission granted by competent authority to engage in a business or occupation or in an activity otherwise unlawful.” In the case of the NFA, as stated by AG Cummings, confirmed by the structure of the statute, the “NFA tax” is a license fee. It is issued by the sovereign, at the will of the sovereign. Every restricted item in the NFA other than explosives is a bearable arm, protected under the Second Amendment per Heller and Bruen. The NFA inescapably converts the right to keep and bear arms into a privilege, contra the Constitution. Thus, the NFA licensing of bearable arms should be declared unconstitutional.
The heavy lifting was completed in Harper, Murdock, and Minneapolis Star. All that is required is to extend the language of those decisions to a neglected part of the Constitution. Converting the words of Chief Justice Roberts in United States v. Stevens into Second Amendment voice:
“The First [Second] Amendment’s guarantee of free speech [the right to keep and bear arms] does not extend only to categories of speech [arms] that survive an ad hoc balancing of relative social costs and benefits. The First [Second] Amendment itself reflects a judgment by the American people that the benefits of its restrictions on the Government outweigh the costs. Our Constitution forecloses any attempt to revise that judgment simply on the basis that some speech is [arms are] not worth it. The Constitution is not a document “prescribing limits, and declaring that those limits may be passed at pleasure.”
Put more simply, we may return to Harper.
“conditioning of the right to vote [keep and bear arms] on the payment of a fee or tax violates the Equal Protection Clause of the Fourteenth Amendment.”