Excise taxes on increased gun and ammunition sales goes back to state DNRs for wildlife projects and hunter education.
A rush by Americans to buy firearms and ammunition in recent months has been a financial windfall for gun and ammo makers and sellers -- but it also will send a flood of money to state natural resources departments.
That's because a federal excise tax on guns, ammo and archery equipment is returned to states for wildlife projects and hunter education. This year the Minnesota Department of Natural Resources stands to get about $16 million -- a record amount and more than double what it received just six years ago.
All told, the recent surge in sales of guns and ammo means the federal program will send a record $555 million back to states in 2013 -- well above the $388 million distributed last year or the previous record of $474 million in 2010.
But even that 43 percent increase in tax revenue in the past year doesn't reflect the flood of gun and ammo sales that has occurred since the election in November, the Newtown, Conn., shootings in December or the controversial gun restriction proposals issued this month by the Obama Administration.
Tax receipts for October, November and December won't be known for months, but based on media reports of skyrocketing gun sales, tax revenue under the Pittman-Robertson Act could be even higher next year.
While tax revenues for guns, ammo and archery equipment have risen slowly over the past 30 years, there's no question the surge in gun and ammo sales in recent years -- evidently prompted by concerns that tighter gun restrictions could be coming under the Obama administration -- has fueled the recent large rises.
"The really big bumps started in 2008,'' said Jim Hodgson, chief of Wildlife and Sport Fish Restoration for the U.S. Fish and Wildlife Service office in Minneapolis. "Guns and ammo sales are definitely driving it."
• Nationally, taxes from handgun sales jumped from about $73 million in 2007 to $160 million in 2012 -- a 117 percent increase over five years.
• Taxes from rifles, shotguns and other firearms jumped from $116 million in 2007 to $179 million in 2012 -- a 54 percent increase.
• And taxes on archery equipment increased from $36 million in 2007 to $44 million last year -- a 22 percent increase.
Meanwhile, a similar excise tax on fishing equipment and marine gas (the Dingell-Johnson Act) is up just 7 percent from last year to $668 million -- and is down 3.8 percent from 2007. Money from that program goes back to the states for fish restoration.
Under the Pittman-Robertson Act, named for its congressional authors in 1937, handguns are taxed 10 percent and other firearms, including rifles, shotguns and muzzleloaders, are taxed 11 percent. Ammunition and archery equipment also is taxed 11 percent. The manufacturers pay the tax upfront but generally passed it on to consumers.
The federal dollars are distributed to states based on geographical size of a state and number of registered hunters. Minnesota tallied 577,000 hunters in 2012, ranking No. 7.
What has the influx of dollars meant for Minnesota? Gun, ammo and archery excise tax revenues increased from $7 million in 2006 to $14.6 million in 2010, then declined a few million dollars before surging again recently. Officials expect to receive nearly $16 million in 2013.
"It's definitely a good thing for our game and fish fund, and our ability to support good conservation over next several years," said Ed Boggess, DNR fish and wildlife division director.
But it's not really a windfall for the state agency, he said. The money must be spent for specific wildlife-related and hunter education purposes, and it comes in the form of reimbursements, covering 75 percent of the costs incurred by the DNR.
"For every dollar we spend, we get 75 cents," Boggess said.
Last year -- the 75th anniversary of Pittman-Robertson -- the DNR received about $11 million. Among the projects:
• $4.6 million for wildlife habitat management, including habitat assessments on 221 wildlife lakes, prairie grass restoration and management on 64,000 acres, habitat improvements on 20,000 acres of forest and 137,000 acres of waters and wetlands.
• $1.7 million for wildlife population management, including 96 special deer hunts and salaries for staff involved with disease management and wolf management.
• $1.6 million for technical assistance to agencies and cities for wildlife lakes, forests and nuisance animals.
• $900,000 for wildlife facilities and operation.
• $600,000 to land acquisition.
• $450,000 for wildlife inventories and surveys.
The Pittman-Robertson and Dingell-Johnson programs also protect hunting and fishing license dollars from being diverted by states for other uses -- say for roads or bridges. If states do so, they are ineligible to receive the federal aid.
"It's a major incentive for states not to divert hunting and fishing license dollars," Boggess said.
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