A tax has been enforced on firearms and ammunition in the USA for over 100 years (since 1919). The FAET excise tax specifically is imposed on manufacturers and importers of ammunition and firearms, but not on the export of same. If one manufactures or produces firearms or ammunition in the United States, they are liable for paying the FAET (Firearms and Ammunition Excise Tax). This also applies to the same that is imported to the U.S. from a foreign entity. Referencing the tax on firearms only is known as FET (Firearms Excise Tax).
Federally, there is a 10% tax on both the pistol and revolver sales price, as well as an 11% tax on the sale price of other firearms such as shotguns and rifles, and on ammunition as well. The FAET is dictated via the Internal Revenue Code 26 U.S.C 4181, chapter 32.
FAET Federal Laws:
26 U.S.C. Chapter 32 (Manufacturers Excise Taxes)
26 U.S.C. Chapter 65 (Abatements, Credits, and Refunds)
FAET Federal Regulations:
27 CFR Part 53 (Manufacturers Excise Taxes- Firearms and Ammunition)
27 CFR Part 70 (Procedures and Practices)
The FAET tax applies to:
Firearms
Ammunition
Shells
Cartridges
The FAET tax is enforced for the above on the following:
Sales
Manufacturing
Production
Importing
Exemptions
Exemptions to FAET include sales to local and state governments, the Coast Guard, Dept. of Defense, educational organizations (nonprofits only) as well as vessels and aircraft.
Producers of less than fifty firearms (per year) are also exempted from the FAET tax.
Also exempt are the manufacturers, producers and importers of firearms and ammunition that do so incidentally for their own personal use.
Helpful Links
Alcohol and Tobacco Tax and Trade Bureau (TTB - government agency that regulates and also collects taxes on firearms)
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