August 06, 2010

Tax Collection Change Would Benefit Wildlife, Local Business

State wildlife funds and local economies to gain under Crapo proposal

Washington, DC - Under legislation cleared by the U.S. Senate, state wildlife restoration funds would get a funding boost, according to Idaho Senator Mike Crapo, who co-chairs the Congressional Sportsmen's Caucus. The measure, which is nearly identical to legislation Crapo introduced with Senator Max Baucus (D-Montana), changes the way federal excise taxes on sporting arms and ammunition are collected from manufacturers by allowing the collection of such taxes to be done on a quarterly basis, rather than every two weeks as under current law. Supporters of the legislation, which include national sporting and firearms advocacy groups, say that easing the cumbersome excise tax collection requirements will provide more money for state wildlife preservation programs. By reducing some of the unnecessary burdens of compliance, manufacturers will be able to reinvest funds into expanding their businesses and stimulate local economic activity, for example, by purchasing new manufacturing machinery and hiring additional workers. The measure has already cleared the U.S. House of Representatives and will now go to the President for signature.

"This is one of those rare win-win situations for everyone involved," explained Crapo. "Switching to a quarterly excise tax payment system would put firearms and ammunition manufacturers on the same system as nearly every other business that collects similar taxes. The frequency of tax payments under current law imposes a burden on the industry; in fact, some manufacturers end up taking out short-term loans to pay the excise taxes, which then results in additional expense and administrative overhead. Money is diverted away from core business areas to finance tax payments, which means fewer funds are available to reinvest and grow business."

Current federal law requires manufacturers of sporting arms and ammunition to pay excise taxes into the Pittman-Robertson Wildlife Restoration Fund. That fund fuels habitat restoration and other efforts to help wildlife under the North American Wetlands Conservation Act. However, sporting arms and ammunition manufacturers are treated differently than other related businesses, and must pay the federal taxes every two weeks. The measure approved unanimously tonight amends the Internal Revenue Code of 1986 to require quarterly, not bi-weekly, tax payments.

Supporters of the legislation include Ducks Unlimited, the National Rifle Association, the Congressional Sportsmen's Foundation, the National Shooting Sports Foundation, Delta Waterfowl, National Wild Turkey Foundation, North American Wetlands Conservation Council and Pheasants Forever.