Real Cost of Handgun Ammunition Act

Summary: Real Cost of Handgun Ammunition Act - Amends the Internal Revenue Code to increase the excise tax on certain ammunition. 
Imposes a special (occupational) tax on importers and manufacturers of certain handgun ammunition for each place of business.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Real Cost of Handgun Ammunition 
Act''.

SEC. 2. INCREASE IN TAX ON HANDGUN AMMUNITION.

    (a) Increase in Manufacturers Tax.--
            (1) In general.--Section 4181 of the Internal Revenue Code 
        of 1986 (relating to imposition of tax on firearms) is 
        amended--
                    (A) by striking ``Shells, and cartridges'' and 
                inserting ``Shells and cartridges not taxable at 50 
                percent or 10,000 percent'', and
                    (B) by adding at the end the following:
            ``Articles taxable at 50 percent.--
                    ``Any centerfire cartridge which has a cartridge 
                case less than 1.3 inches in length.
                    ``Any cartridge case which is less than 1.3 inches 
                in length.
            ``Articles taxable at 10,000 percent.--
                    ``Any jacketed, hollow point projectile which may 
                be used in a handgun and the jacket of which is 
                designed to produce, upon impact, evenly-spaced sharp 
                or barb-like projections that extend beyond the 
                diameter of the unfired projectile.
                    ``Any cartridge with a projectile measuring .500 
                inch or greater in diameter which may be used in a 
                handgun.''.
            (2) Additional taxes added to the general fund.--Section 
        3(a) of the Act of September 2, 1937 (16 U.S.C. 669b(a)), 
        commonly referred to as the ``Pittman-Robertson Wildlife 
        Restoration Act'', is amended by adding at the end the 
        following new sentence: ``There shall not be covered into the 
        fund the portion of the tax imposed by such section 4181 that 
        is attributable to any increase in amounts received in the 
        Treasury under such section by reason of the amendments made by 
        section 2(a)(1) of the Real Cost of Handgun Ammunition Act, as 
        estimated by the Secretary.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to sales after December 31, 1993.

SEC. 3. SPECIAL TAX FOR IMPORTERS, MANUFACTURERS, AND DEALERS OF 
              HANDGUN AMMUNITION.

    (a) In General.--
            (1) Imposition of tax.--Section 5801 of the Internal 
        Revenue Code of 1986 (relating to special occupational tax on 
        importers, manufacturers, and dealers of machine guns, 
        destructive devices, and certain other firearms) is amended by 
        adding at the end the following new subsection:
    ``(c) Special Rule for Handgun Ammunition.--
            ``(1) In general.--On first engaging in business and 
        thereafter on or before July 1 of each year, every importer and 
        manufacturer of handgun ammunition shall pay a special 
        (occupational) tax for each place of business at the rate of 
        $10,000 a year or fraction thereof.
            ``(2) Handgun ammunition defined.--For purposes of this 
        part, the term `handgun ammunition' shall mean any centerfire 
        cartridge which has a cartridge case of less than 1.3 inches in 
        length and any cartridge case which is less than 1.3 inches in 
        length.''.
            (2) Registration of importers and manufacturers of handgun 
        ammunition.--Section 5802 of the Internal Revenue Code of 1986 
        (relating to registration of importers, manufacturers, and 
        dealers) is amended--
                    (A) in the first sentence, by inserting ``, and 
                each importer and manufacturer of handgun ammunition,'' 
                after ``dealer in firearms'', and
                    (B) in the third sentence, by inserting ``, and 
                handgun ammunition operations of an importer or 
                manufacturer,'' after ``dealer''.
    (b) Conforming Amendments.--
            (1) Chapter heading.--Chapter 53 of the Internal Revenue 
        Code of 1986 (relating to machine guns, destructive devices, 
        and certain other firearms) is amended in the chapter heading 
        by inserting ``HANDGUN AMMUNITION,'' after ``CHAPTER 53--''.
            (2) Table of chapters.--The heading for chapter 53 in the 
        table of chapters for subtitle E of such Code is amended to 
        read as follows:

                              ``Chapter 53--Handgun ammunition, machine 
                                        guns, destructive devices, and 
                                        certain other firearms.''
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on July 1, 1994.
            (2) All taxpayers treated as commencing in business on July 
        1, 1994.--Any person engaged on July 1, 1994, in any trade or 
        business which is subject to an occupational tax by reason of 
        the amendment made by subsection (a)(1) shall be treated for 
        purposes of such tax as having 1st engaged in a trade of 
        business on such date.