II

105TH CONGRESS

1ST SESSION S. 133

To amend the Internal Revenue Code of 1986 to increase the tax on handgun

ammunition, to impose the special occupational tax and registration

requirements on importers and manufacturers of handgun ammunition,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 21, 1997

Mr. MOYNIHAN introduced the following bill; which was read twice and

referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to increase

the tax on handgun ammunition, to impose the special

occupational tax and registration requirements on importers and manufacturers of handgun ammunition, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Real Cost of Destruc5 tive Ammunition Act’’.

6 SEC. 2. INCREASE IN TAX ON HANDGUN AMMUNITION.

7 (a) INCREASE IN MANUFACTURERS TAX.—
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1 (1) IN GENERAL.—Section 4181 of the Internal

2 Revenue Code of 1986 (relating to imposition of tax

3 on firearms) is amended—

4 (A) by striking ‘‘Shells, and cartridges’’

5 and inserting ‘‘Shells and cartridges not taxable

6 or taxable at 10,000 percent’’.

7 ‘‘ARTICLES TAXABLE AT 10,000 PERCENT.—

8 ‘‘Any jacketed, hollow point projectile

9 which may be used in a handgun and the jacket

10 of which is designed to produce, upon impact,

11 evenly-spaced sharp or barb-like projections

12 that extend beyond the diameter of the unfired

13 projectile.’’

14 (2) ADDITIONAL TAXES ADDED TO THE GEN15 ERAL FUND.—Section 3(a) of the Act of September

16 2, 1937 (16 U.S.C. 669b(a)), commonly referred to

17 as the ‘‘Pittman-Robertson Wildlife Restoration

18 Act’’, is amended by adding at the end the following

19 new sentence: ‘‘There shall not be covered into the

20 fund the portion of the tax imposed by such section

21 4181 that is attributable to any increase in amounts

22 received in the Treasury under such section by rea23 son of the amendments made by section 2(a)(1) of

24 the Real Cost of Destructive Ammunition Act, as es25 timated by the Secretary.’’
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1 SEC. 3. SPECIAL TAX FOR IMPORTERS, MANUFACTURERS,

2 AND DEALERS OF HANDGUN AMMUNITION.

3 (a) IN GENERAL.—

4 (1) IMPOSITION OF TAX.—Section 5801 of the

5 Internal Revenue Code of 1986 (relating to special

6 occupational tax on importers, manufacturers, and

7 dealers of machine guns, destructive devices, and

8 certain other firearms) is amended by adding at the

9 end the following new subsection:

10 ‘‘(c) SPECIAL RULE FOR HANDGUN AMMUNITION.—

11 ‘‘(1) IN GENERAL.—On first engaging in busi12 ness and thereafter on or before July 1 of each year,

13 every importer and manufacturer of handgun ammu14 nition shall pay a special (occupational) tax for each

15 place of business at the rate of $10,000 a year or

16 fraction thereof.

17 ‘‘(2) HANDGUN AMMUNITION DEFINED.—For

18 purposes of this part, the term ‘handgun ammuni19 tion’ shall mean any centerfire cartridge which has

20 a cartridge case of less than 1.3 inches in length and

21 any cartridge case which is less than 1.3 inches in

22 length.’’

23 (2) REGISTRATION OF IMPORTERS AND MANU24 FACTURERS OF HANDGUN AMMUNITION.—Section

25 5802 of the Internal Revenue Code of 1986 (relating
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1 to registration of importers, manufacturers, and

2 dealers) is amended—

3 (A) in the first sentence, by inserting ‘‘,

4 and each importer and manufacturer of hand5 gun ammunition,’’ after ‘‘dealer in firearms’’,

6 and

7 (B) in the third sentence, by inserting ‘‘,

8 and handgun ammunition operations of an im9 porter or manufacturer,’’ after ‘‘dealer’’.

10 (b) CONFORMING AMENDMENTS.—

11 (1) CHAPTER HEADING.—Chapter 53 of the In12 ternal Revenue Code of 1986 (relating to machine

13 guns, destructive devices, and certain other fire14 arms) is amended in the chapter heading by insert15 ing ‘‘HANDGUN AMMUNITION,’’ after

16 ‘‘CHAPTER 53—’’.

17 (2) TABLE OF CHAPTERS.—The heading for

18 chapter 53 in the table of chapters for subtitle E of

19 such Code is amended to read as follows:

‘‘Chapter 53—Handgun ammunition, machine guns, destructive

devices, and certain other firearms.’’

20 (c) EFFECTIVE DATE.—

21 (1) IN GENERAL.—The amendments made by

22 this section shall take effect on July 1, 1997.

23 (2) ALL TAXPAYERS TREATED AS COMMENCING

24 IN BUSINESS ON JULY 1, 1997.—Any person engaged
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1 on July 1, 1997, in any trade or business which is

2 subject to an occupational tax by reason of the

3 amendment made by subsection (a)(1) shall be treat4 ed for purposes of such tax as having 1st engaged

5 in a trade of business on such date.

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