The U.S. Defends National Firearms Act Restrictions Lacking a Tax Nexus

As I previously explained in “The Zero Tax on NFA Firearms,” serious constitutional issues arise about the constitutional validity of the registration and other requirements of the National Firearms Act as to the firearms that now have a $0 tax.  They include short barreled shotguns (SBSs), short-barreled rifles (SBRs), silencers, and “any other weapons” (AOLs).  Machineguns and destructive devices remain subject to the $200 making and transfer tax.

Three challenges are pending, Chris Brown v. ATF in the Eastern District of Missouri (see docket here), Silencer Shop Foundation v. ATF in the Northern District of Texas (see docket here), and Jensen v. ATF also in the Northern District of Texas (see docket here).

In Silencer Shop, in response to plaintiffs’ motion for summary judgment, the United States has filed its opposition and cross-motion for summary judgment.  The United States contends that the NFA regulations as applied to the zero-taxed firearms remain justified under Congress’s tax power, as they support the collection of the special occupational taxes on firms engaged in the business of manufacturing and selling NFA firearms.  They are also justified under the Commerce Clause, as the related activities in intrastate commerce substantially affect interstate commerce.  Finally, DOJ argues that the Second Amendment does not protect NFA firearms, including suppressors, because they are “dangerous and unusual.”

Article I Tax Power

As to the tax power, Sonzinsky (1937) upheld the NFA special occupational taxes (SOT) applicable to NFA businesses.  That part of the NFA remains intact.  The government argues that the zero-taxed making and transfer requirements of the NFA remain valid so the government may ensure that NFA businesses are paying their SOT.

But like any other regulated industry, the government knows whether applicable restrictions are followed by inspections, investigations, and other procedures.  Under Title I of the Gun Control Act, firearm businesses are required to have licenses, and they are subject to inspection for compliance with regulations.  Those engaged in the business of making or selling firearms without a license are prosecuted under the GCA.  However, firearms bought by non-licensees from FFLs are not subject to licensing and are not required to be registered and regulated for eternity so that the government can keep track of those requiring a license.  In fact, 18 U.S.C. § 926(a) of the Gun Control Act actually prohibits the registration of firearms that are sold to non-licensees.

Consider the implications of the government’s expansive conception of the tax power.  A federal excise tax is imposed on the manufacture of sport fishing equipment.  Would it be a necessary and proper exercise of Congress’s Article I power to raise revenue to require every transfer thereafter, none of which are taxable, to be approved by the government to determine whether the excise tax had originally been paid by the manufacturer?

Or, hypothetically, could Congress require all grocery stores to pay a special occupational tax and, in turn, require all Americans who purchase groceries to register their groceries with the federal government—all in the name of ensuring that grocery stores paid their own special occupational tax? That would be absurd. Yet, this is essentially what the government is arguing here to justify the registration and fingerprinting requirements of firearms which are subject to the $0 tax.

The government’s position in this litigation belies its recognition elsewhere that a firearm not subject to taxation is not subject to the NFA.  In 18 U.S.C. § 922(o), Congress banned possession of machineguns made after May 19, 1986.  ATF then refused to accept tax payments for and to register such machineguns.  U.S. v. Rock Island Armory (C.D. Ill. 1991) held that no constitutional basis existed for the registration requirement and dismissed an indictment for unregistered machineguns under the NFA.  (Disclosure: I was counsel for the defendant.)  U.S. v. Dalton (10th Cir. 1992) was in accord.

Thereafter, the United States conceded the point: “The United States agrees that the foregoing decisions [Dalton and Rock Island] are persuasive and should control the disposition of this appeal, and … [defendant’s] conviction under 26 U.S.C. § 5861(d) should be vacated.” Joint Motion for Remand, U.S. v. Kirk, No. 91-8418, motion granted (5th Cir. April 28, 1992) (indictment under NFA for post-1986 machinegun).

Based on the above, the United States Attorneys’ Manual instructed then and continues to instruct today:

As a result of the enactment of 18 U.S.C. § 922(o), the Secretary of the Treasury no longer will register or accept any tax payments to make or transfer a machinegun made after May 19, 1986. Accordingly, because it is impossible to comply with the registration and taxation provisions in the NFA, prosecutors should charge the unlawful possession or transfer of a machinegun made after May 19, 1986 under § 922(o).

In other words, federal prosecutors should charge the unlawful possession of post-1986 machine guns under the GCA and not under the NFA. Why? Because there is no Article I tax basis for such an NFA prosecution.

Indeed, the premise of this U.S. Attorneys’ policy is that lack of any tax nexus thereby undercuts the basis of requiring registration.  That applies directly to the current NFA litigations here—the zero tax on certain NFA firearms has removed the constitutional basis of the NFA’s making and transfer provisions as to those firearms.  (It goes without saying that § 922(o), which bans mere possession of a machinegun without a commerce nexus being an element of the offense, has its own constitutional problems.  See my article The Power to Tax.)

Commerce Clause

In Silencer Shop, the government next contends that the NFA’s restrictions on non-taxed firearms are constitutional under the Commerce Clause.  It argues that Lopez (1995) does not apply. Lopez invalidated the Gun Free Schools Act’s ban on possession of a firearm at a school as having no basis in the Commerce Clause.  Instead, DOJ argues that the upholding of federal restrictions on the local cultivation of marijuana upheld in Raich (2005) under the Commerce Clause applies to the NFA’s requirements on the untaxed making and transfer of firearms.

Since most firearms are produced and sold interstate by federally-licensed dealers, the government argues, the intrastate making and transfer by non-licenses thereafter may be subject to the NFA as a regulation of commerce.

For that it cites U.S. v. Ardoin (5th Cir. 1994), which held that “although the NFA was originally upheld under Congress’s taxing power, no one could seriously contend” that the Act “could not also be upheld under Congress’s power to regulate interstate commerce.”  But the government ignored the Fifth Circuit’s distinguishing of Ardoin in Texas v. U.S. (2019) as follows:

But the taxing power was “preserved” in Ardoin because it was non-revenue-producing only in practice whereas the “tax” here is actually $0.00 as written on the books…. Expanding Ardoin to apply here would, as the federal defendants point out, puzzlingly allow Congress to “prohibit conduct that exceeds its commerce power through a two-step process of first taxing it and then eliminating the tax while retaining the prohibition.”

While National Federation v. Sebelius (2012) reversed Texas for lack of standing, it rejected the Commerce Clause as the basis for Obamacare and upheld it under the power to tax, recalling Sonzinsky and noting that “the breadth of Congress’s power to tax is greater than its power to regulate commerce.”

It is noteworthy that in U.S. v. Hall (1999), the Eighth Circuit—where the Brown challenge is pending—held that the NFA registration requirement “cannot be sustained under the commerce clause,” but followed Sonzinsky in holding that “the ‘registration provisions … are obviously supportable as in aid of a revenue purpose.'”

And, of course, a quick review of pattern jury instructions and of the relevant NFA statute that would be deployed to prosecute someone for violating the non-registration requirements of the NFA do not include an essential criminal element of “interstate commerce” or “foreign commerce.” In other words, DOJ’s argument based upon Article I’s Commerce Clause cannot save the challenged NFA law because there is no statutory hook to that Clause. If Congress wished to add an “interstate commerce” element to that crime, then perhaps doing so would save such a hypothetical statute from a constitutional challenge. By asking a federal court to rewrite the NFA to include a “commerce clause” element would force a judge to engage in lawmaking, which is the province of the Congress.

Second Amendment

Finally, the government in Silencer Shop turns to the Second Amendment, arguing from Miller and Heller that short-barreled shotguns (SBSs) are not protected and that short-barreled rifles (SBRs) are not “materially distinguishable from” short-barreled shotguns.  But the argument for restricting SBSs has always been that they fire multiple rounds of shot through a smooth bore, whereas SBRs—like handguns and long-barreled rifles—are designed to fire a single projectile through a rifled bore.  As I show in The Power to Tax, SBRs were inserted into the 1934 NFA bill when pistols and revolvers were still in the bill, and the point was to prevent smaller rifles from being considered “any other concealable weapon.”  When pistols and revolvers were removed from the bill, it made no sense to retain SBRs—middle-sized rifled arms—in the bill.

The government throws in dicta from the plurality opinion in Thompson/Center Arms that an SBR is “a concealable weapon” “likely to be used for criminal purposes.”  Not so.  As the 1986 Wright-Rossi study demonstrated, “sawed-off” rifles are the least likely type of firearm to be used in violent crime.  Handguns, of course, top the list as recognized by the Supreme Court in Heller.

The government further suggests that NFA firearms in the “any other weapon” (AOW) category also lack Second Amendment protection.  They include smooth-bore handguns, which cannot fire bullets accurately, but handguns with rifled bores are excluded from the AOW category.  Some smooth-bore handguns can fire the diminutive .410 shot shell, making them allegedly “not typically possessed by law-abiding citizens for lawful purposes.”  Well guess what, a number of handguns with rifled bores can also fire the .410 shell, and they are not NFA firearms.

As the government notes, in U.S. v. Peterson (2025) the Fifth Circuit upheld “the NFA’s shall-issue licensing regime” for silencers as consistent with the Second Amendment under Bruen.  While footnote 9 of Bruen cited the overwhelming number of shall-issue state licensing laws for carrying handguns, it is a leap to justify registration laws from that footnote.  As then Judge Kavanaugh wrote in his Heller II dissent, “Registration of all lawfully possessed guns—as distinct from licensing of gun owners or mandatory record-keeping by gun sellers—has not traditionally been required in the United States and even today remains highly unusual.”  Moreover, “registration requirements are often seen as half-a-loaf measures aimed at deterring gun ownership.”

Finally, the government argues generally that the NFA restrictions at issue are “consistent with this Nation’s historical tradition of firearm regulation,” under the tradition of  “prohibit[ing] the carrying of ‘dangerous and unusual weapons.'”  For that, it cites state cases, such as Wilson v. State (Ark. 1878), that concerned restrictions on the carrying—not the possession—of certain firearms.

Moreover, because the “dangerous and unusual” standard arises from the historical tradition of firearms regulation considered by courts only after an initial finding that an object is an “arm” under the Second Amendment’s plain text, the government bears the burden of demonstrating here that the $0-taxed firearms are “dangerous and unusual.” The DOJ’s brief made virtually no effort to satisfy this burden beyond a few legal citations.

In the Brown case, the plaintiffs’ motion for summary judgment may be viewed here.  The United States is scheduled to file its combined opposition to plaintiffs’ motion and its own cross-motion for summary judgment by December 17, 2025.  In the Jensen case, the plaintiffs’ motion for summary judgment may be viewed here.