Extract from U.S. v. Rock Island Armory
[...]
As applied to machineguns alleged to be possessed after May
19, 1986, prosecutions may no longer proceed under 26 U.S.C.
section 5861. This is because the National Firearms Act is part of
the Internal Revenue Code, and its provisions-including
registration of machineguns possessed after May 19, 1986-are valid
only to the extent they aid in the collection of tax revenue.
Since BATF would not register and accept tax payments for any
machinegun after May 19, 1986, registration of machineguns made and
possessed after that date no longer serves any revenue purpose, and
such registration requirements are invalid. Since 18 U.S.C. sec.
922(o) is interpreted to ban registration and taxation of
machineguns under the National Firearms Act, sec. 922(o)
effectively repeals such registration and taxation provisions.
Congress has no enumerated power to require registration of
firearms. However, since registration, of firearms
may assist in the collection of revenue, Congress passed the
National Firearms Act in 1934 pursuant to its power to tax.
Section 922(o) destroys the constitutional basis of registration.
In the 1934 hearings, Attorney General Homer S. Cummings
explained in detail how the NFA would be based on the tax power.
National Firearms Act: Hearings Before the House Committee on Ways
and Means, 73rd Cong., 2d Sess., 6 (1934). Cummings denied that
machineguns could be banned, because "we have no inherent police
power to go into certain localities and deal with local crime. It
is only when we can reach those things under ... the power of
taxation, that we can act." Id. at 8.
When Congressman Harold Knutson asked "why should we permit
the manufacture, that is, permit the sale of the machine guns to
any one outside of the several branches of the Government,"
Congressman Sumners suggested "that this is a revenue measure and
you have to make it possible at least in theory for these things to
move in order to get internal revenue?" Id. at 13-14. Cummings
agreed: "That is the answer exactly." Id. at 14. The following
dialogue ensued:
Attorney General CUMMINGS .... If we made a statute
absolutely forbidding any human being to have a machine gun,
you might say there is some constitutional question involved.
But when you say, "we will tax the machine gun," you are
easily within the law.
Mr. LEWIS. In other words, it does not amount to prohibition,
but allows of regulation.
Attorney General CUMMINGS. That is the idea. We have studied
that very carefully. Id. at 19.
The National Firearms Act was originally passed as a taxing
statute under the authority of Nigro v. United States, 276 U.S.
332, 48 S.Ct. 388, 72 L.Ed. 600 (1928). See National Firearms Act:
Hearings Before the Committee on Ways and Means, supra, at 101-02,
162. Upholding the Harrison Anti-Narcotic Act, Nigro noted:
"In interpreting the act, we must assume that it is a taxing
measure, for otherwise it would be no law at all. If it is a
mere act for the purpose of regulating and restraining the
purchase of the opiate and other drugs, it is beyond the power
of Congress and must be regarded as invalid ....
276 U.S. at 341, 48 S.Ct. at 390. The Court added:
Congress by merely calling an act a taxing act cannot make it a
legitimate exercise of taxing power under sec. 8 of article I of
the Federal Constitution, if in fact the words of the act show
clearly its real purpose is otherwise."
Id. at 353, 48 S.Ct. at 394.
The committee reports on the National Firearms Act mention the
constitutional basis of federal jurisdiction. The House Ways and
Means Committee report, which the Senate Finance Committee report
repeats verbatim, explained the basis of the NFA in part as
follows:
In general this bill follows the plan of the Harrison
Anti-Narcotic Act and adopts the constitutional principle
supporting that act in providing for the taxation of fire-arms
and for procedure under which the tax is to be collected.
Rept. No. 1780, Committee on Ways and Means, U.S. House of
Representatives, 73rd Cong., 2d Sess. 2 (1934); Rept. No. 1444,
Committee on Finance, U.S. Senate, 73rd Cong., 2d Sess. 1 (1934).
The Seventh Circuit was the first to enunciate the rule that
the National Firearms Act is solely a tax measure. In Sonzinsky v.
United States, 86 F.2d 486 (7th Cir.1936), aff'd, 300 U.S. 506, 57
S.Ct. 554, 81 L.Ed. 772 (1937), the Court of Appeals considered the
validity of the requirement that a dealer in firearms register with
the collector and pay a special excise tax of $200 per year. The
Court found the NFA to be constitutionally valid as under the
taxing power of Congress in Article I, sec. 8 of the Constitution.
Rejecting the argument that the NFA's real purpose was suppression
of crime, the Court held:
The act ... evidences no announced purpose outside the
constitutional authority. [It is] unusually free from
regulative provisions, merely providing for a tax in varying
amount upon different classifications of persons and requiring
such persons to register.... Id. at 490.
The Supreme Court affirmed the Seventh Circuit in
Sonzinsky, 300 U.S. 506, 57 S.Ct. 554. The defendant argued:
that the present levy is not a true tax, but a penalty imposed
for the purpose of suppressing traffic in a certain noxious
type of firearms, the local regulation of which is reserved to
the states because not granted to the national government.
[..]
The National Firearms Act was reenacted as Title II of the Gun
Control Act of 1968. Congress rejected a proposal that would not
have been based on the power to tax. Fred B. Smith, General
Counsel of the Treasury Department, noted that the proposal "would
make it unlawful for a person under 21 years of age to possess a
National Firearms Act firearm." Federal Firearms Act: Hearings
Before the Subcommittee to Investigate Juvenile Delinquency,
Judiciary Committee, U.S. Senate, 90th Cong., lst Sess., 1088
(1967). Smith stated:
It seems doubtful that the ... provision can be justified
under the taxing or commerce powers, or under any other power
enumerated in the Constitution, for Federal enactment.
Consequently, the Department questions the advisability of
including in the bill a measure which could be construed as an
usurpation of a (police) power reserved to the states by
Article X of the United States Constitutional Amendments.
Id. at 1089.
Since reenactment of the National Firearms Act, the various
circuits have continued to follow the Sonzinsky rule. United
States v. Ross, 458 F.2d 1144, 1145 (5th Cir.1972), cert. denied,
409 U.S. 868, 93 S.Ct. 167, 34 L.Ed.2d 118 states:
The test of validity is whether on its face the tax operates
as a revenue generating measure and the attendant regulations
are in aid of a revenue purpose .... Section 5861(d) making
possession of an unregistered weapon unlawful is part of the
web of regulation aiding enforcement of the transfer tax
provision in section 5811. Having required payment of a
transfer tax and registration as an aid in collection of that
tax, Congress under the taxing power may reasonably impose a
penalty on possession of unregistered weapons. Such a penalty
imposed on transferees ultimately discourages the transferror
on whom the tax is levied from transferring a firearm without
paying the tax.
The prosecution argues that the NFA is still a tax act because
criminal violators only will be assessed the "tax." Response to
Defendant's Motion to Dismiss the Indictment at 6. This begs the
question, because the government refuses to register the making or
transfer of a post-1986 machinegun on behalf of an applicant who is
not being prosecuted, and will not register any firearm even when
it imposes a tax assessment. (Footnote 9) Thus, the registration
requirement - which the government interprets as repealed by sec.
922(o) is still left without any tax nexus. (Footnote 10)
Moreover, the "tax" assessed cannot be voluntarily paid by a
would-be taxpayer, but is paid only by tax violators. This
indicates that the $200 "tax" is really a fine,
just as is the $10,000 for which one may be "fined" upon conviction
of an NFA offense. 26 U.S.C. sec. 5871. Since both apply only to
NFA criminal violators, both the $200 assessment and the $10,000
fine are "fines," not taxes. Criminal fines are not constitutional
as encompassed under Congress' power to raise revenue, but must
pass constitutional muster under an enumerated power. Under the
prosecution's argument, the federal government could totally usurp
all local criminal jurisdiction, under the guise that the fines
imposed would really be taxes because they raise revenue.
[...]
The prosecution also asserts that "machine guns may still be
manufactured, and therefore taxed, under 18 U.S.C. sec.
922(o)(2)(A)." Response at 6. Yet the government has successfully
argued that that provision allows manufacture only for official
government use. Farmer v. Higgins, 907 F.2d at 1042-44.
Manufacture for government use is exempt from any tax. 26 U.S.C.
sec.sec. 5852, 5953. Also, this argument fails to address the fact
that the United States refuses to register any post 1986
machineguns, thereby severing any tax nexus for this registration
requirement, with which compliance is impossible.
[...]
The enactment of 18 U.S.C. sec. 922(o) in 1986 removed the
constitutional legitimacy of registration as an aid to tax
collection. This is because the government interprets and enforces
sec. 922(o) to disallow registration, and refuses to collect the
tax. Farmer v. Higgins, 907 F.2d 1041, 1042-44 (11th Cir.1990),
cert. denied, - U.S. - , III S.Ct. 753, 112 L.Ed.2d 773 (1991).
Thus, sec. 922(o) undercut the constitutional basis of registration
which had been the rule since Sonzinsky.
Finally, the prosecution quotes an enactment passed in 1968
that the provisions of Title I of the Gun Control Act shall not
modify or affect the National Firearms Act. (Footnote 15) However,
the 1968 Congress cannot bind the Congress of 1986, which decided
to ban transfer and possession of machineguns. P.L. 99-308, 100
Stat. 453 (May 19, 1986). (Footnote 16) Further, a Congressional
declaration in 1968 does not solve a constitutional problem which
arose in 1986. The ban enacted in 1986, and the government's
refusal to accept registrations and tax payments, simply left the
registration requirements with no constitutional basis. It is the
duty of the judiciary to declare such laws unconstitutional.
Marbury v. Madison, I Cranch. 137, 176-77, 2
L.Ed. 60 (1803).
In sum, since enactment of 18 U.S.C. sec. 922(o), the
Secretary has refused to accept any tax payments to make or
transfer a machinegun made after May 19, 1986, to approve any such
making or transfer, or to register any such machinegun. As applied
to machineguns made and possessed after May 19, 1986, the
registration and other requirements of the National Firearms Act,
Chapter 53 of the Internal Revenue Code, no longer serve any
revenue purpose, and are impliedly repealed or are
unconstitutional. Accordingly, Counts l(a) and (b), 2, and 3 of
the superseding indictment are
DISMISSED.
