Colorado’s Gun Tax Initiative and the Second Amendment

Colorado is the only state where voters will consider a ballot initiative related to firearms this fall.  While a number of initiatives were proposed across the country earlier this year (we covered some of those here), most did not successfully make their way onto the ballot.[1]  The Colorado measure passed on a party-line vote in the Colorado state legislature and is required to obtain voter approval to take effect under a state law enacted in 1992.

The measure, called Proposition KK, asks:

Shall state taxes be increased by $39,000,000 annually to fund mental health services, including for military veterans and at-risk youth, school safety, and gun violence prevention, and support services for victims of domestic violence and other violent crimes by authorizing a tax on gun dealers, gun manufacturers, and ammunition vendors at the rate of 6.5% of the net taxable sales from the retail sale of any gun, gun precursor part, or ammunition, with the state keeping and spending all of the new tax revenue as a voter-approved revenue change? 

While there’s not much (if any) advance polling on Proposition KK, Colorado is a Democratic-leaning state that has voted comfortably blue in the most recent four presidential elections.  That alone suggests the measure, which passed with strong Democratic support in the state legislature, is likely to succeed in November.  Supporters focus primarily on how the revenue obtained through the tax could help crime victims, while opponents argue in part that the tax “will further obstruct gun ownership for those who can least afford it.”  Some opposition to the measure comes from expected places like the NRA, but it’s possible that arguments about disparate impact from the left will resonate most strongly in a Democratic state like Colorado. 

Currently, only California has an excise tax on firearms and ammunition—a new law enacted in 2023 that Dru Stevenson summarized in an earlier guest post.  In 2016, a federal judge invalidated a $1,000 excise tax on handguns imposed by the Northern Marianas Islands, finding that such a high tax “comes close to destroying the Second Amendment right to acquire ‘the quintessential self-defense weapon.’”  Similar taxes have been proposed, so far unsuccessfully, in states such as Maryland.

A number of municipalities have gun taxes or analogous laws in place, including San Jose.  That city instituted an insurance requirement and gunowner harm reduction fee in 2022 that operates as the functional equivalent of a point-of-sale tax.  As I discussed in an earlier post, the San Jose law was upheld against Second Amendment challenge last year primarily on the basis that requiring gunowners to obtain insurance did not infringe on protected conduct because the city was not preventing or seriously burdening the right to obtain or keep a firearm.  At the second step of Bruen, the court found that the law operated in an analogous manner to historical surety statutes.

California’s excise tax is probably the most analogous state or city provision to the Colorado measure, though it sets a higher tax rate at 11%.  The California tax was challenged almost immediately in state court by a group of gunowners and gun-rights groups.  The plaintiffs argue in that case that California’s tax violates the right to keep and bear arms “because it implicates conduct protected by the Second Amendment’s plain text—acquiring firearms and ammunition—and is not part of this Nation’s history of gun regulation.”  They further assert that the law “impermissibly singles out constitutional rights for special taxation,” drawing comparisons to poll taxes and the taxation of protected religious expression.

As Professor Stevenson’s earlier post notes, there is substantial uncertainty about whether gun excise taxes will actually discourage gun purchasing—meaning that the primary impact of such laws is likely to be the revenue raised (here, that revenue is earmarked for mental health and violence reduction initiatives) and public messaging.  This is probably even more true for Colorado’s measure, which imposes a lower tax than in California.  

Apart from practical consequences, Colorado’s measure is almost certain to face a similar legal challenge to California’s if it passes in November.  The California complaint raises at least three major issues for future Second Amendment challenges to similar state excise taxes.  First, is the right to obtain firearms without a special tax conduct protected by the Second Amendment?  It’s certainly true that some taxes (like the exorbitant tax struck down in the Marianas case) might effectively nullify the right to keep and bear arms, but it’s difficult to know where that line is.  The California lawsuit suggests that any firearms-specific taxation scheme implicates protected conduct.

Assuming the answer to the threshold coverage question is “yes,” there are two more relevant inquiries: (1) is there an analogous historical tradition of gun and weapons taxation, and (2) is a tax that burdens constitutionally protected conduct invariably suspect?  The first, historical question is a difficult one that will require close examination of state, territorial, and municipal weapon taxes enacted in the 1800s.[2]  For example, in 1856 North Carolina enacted a use tax of $1.25 on pistols and Bowie knives and 60¢ on dirks and swordcanes—provided the weapons had been worn or carried during the preceding year and exempting pistols “used exclusively for mustering.”  And Georgia instituted a $2 tax on “dueling or pocket pistol[s],” with certain exceptions, in the 1840s.[3]  There’s also a long history of federal taxation of firearms dating back to a 1919 excise tax on firearms and ammunition to support the war effort.  

The comparison to other constitutional rights may also be more complex than it appears at first glance.  For example, the California complaint compares the state’s gun excise tax to a poll tax in that both impermissibly burden a protected right (the right to keep and bear arms and the right to vote, respectively) and cites Harper, a landmark 1966 Supreme Court decision striking down a Virginia poll tax and holding that “the right to vote is too precious, too fundamental to be so burdened or conditioned.”  Harper was decided under the equal protection clause and actually followed a federal constitutional amendment to eliminate poll taxes.  To the extent the argument against gun excise taxes is really an equal protection claim based on disparate impact on the less wealthy who may wish to obtain firearms for self-defense, it may be an uphill battle.  The Court has consistently refused to apply any form of heightened scrutiny to wealth classifications and generally held a hard and fast line between discriminatory intent and disparate impact.  Moreover, a percentage excise tax seems to be on surer footing with regard to disparate impact than a flat tax, and it may be relevant which communities and groups specifically stand to benefit from the programs for which the revenue from the tax is earmarked.