II

106TH CONGRESS

1ST SESSION S. 152

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 19, 1999

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 at 10,000 percent.’’, and

7 (B) by adding at the end the following:

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

9 ‘‘Any jacketed, hollow point projectile

10 which may be used in a handgun and the jacket

11 of which is designed to produce, upon impact,

12 evenly-spaced sharp or barb-like projections

13 that extend beyond the diameter of the unfired

14 projectile.’’

15 (2) ADDITIONAL TAXES ADDED TO THE GEN16 ERAL FUND.—Section 3(a) of the Act of September

17 2, 1937 (16 U.S.C. 669b(a)), commonly referred to

18 as the ‘‘Pittman-Robertson Wildlife Restoration

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

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

21 fund the portion of the tax imposed by such section

22 4181 that is attributable to any increase in amounts

23 received in the Treasury under such section by rea24 son of the amendments made by section 2(a)(1) of
3

•S 152 IS

1 the Real Cost of Destructive Ammunition Act, as es2 timated by the Secretary of the Treasury.’’

3 SEC. 3. SPECIAL TAX FOR IMPORTERS, MANUFACTURERS,

4 AND DEALERS OF HANDGUN AMMUNITION.

5 (a) IN GENERAL.—

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

7 Internal Revenue Code of 1986 (relating to special

8 occupational tax on importers, manufacturers, and

9 dealers of machine guns, destructive devices, and

10 certain other firearms) is amended by adding at the

11 end the following:

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

13 ‘‘(1) IN GENERAL.—On 1st engaging in busi14 ness and thereafter on or before July 1 of each year,

15 every importer and manufacturer of handgun ammu16 nition shall pay a special (occupational) tax for each

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

18 fraction thereof.

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

20 purposes of this part, the term ‘handgun ammuni21 tion’ shall mean any centerfire cartridge which has

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

23 any cartridge case which is less than 1.3 inches in

24 length.’’
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1 (2) REGISTRATION OF IMPORTERS AND MANU2 FACTURERS OF HANDGUN AMMUNITION.—Section

3 5802 of the Internal Revenue Code of 1986 (relating

4 to registration of importers, manufacturers, and

5 dealers) is amended—

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

7 and each importer and manufacturer of hand8 gun ammunition,’’ after ‘‘dealer in firearms’’,

9 and

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

11 and handgun ammunition operations of an im12 porter or manufacturer,’’ after ‘‘dealer’’.

13 (b) CONFORMING AMENDMENTS.—

14 (1) CHAPTER HEADING.—Chapter 53 of the In15 ternal Revenue Code of 1986 (relating to machine

16 guns, destructive devices, and certain other fire17 arms) is amended in the chapter heading by insert18 ing ‘‘HANDGUN AMMUNITION,’’ after

19 ‘‘CHAPTER 53—’’.

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

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

22 such Code is amended to read as follows:

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

devices, and certain other firearms.’’

23 (c) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—The amendments made by

2 this section shall take effect on July 1, 1999.

3 (2) ALL TAXPAYERS TREATED AS COMMENCING

4 IN BUSINESS ON JULY 1, 1997.—Any person engaged

5 on July 1, 1999, in any trade or business which is

6 subject to an occupational tax by reason of the

7 amendment made by subsection (a)(1) shall be treat8 ed for purposes of such tax as having 1st engaged

9 in a trade of business on such date.

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