Last year, the National Firearms Act (NFA) was weakened for the first time ever when the Big Beautiful Bill Act removed the $200 transfer tax on certain classes of firearms, including suppressors and short-barreled rifles (SBRs). While the Senate Parliamentarian unfortunately nixed the part of the bill that would have repealed the NFA’s registration requirements too, that legislative breakthrough paved the way to litigation success. In other words, while lawmakers didn’t manage to kill the NFA’s registration requirements in Congress, we may now manage to do so in the courts thanks to the elimination of the transfer tax.
For nearly 90 years beginning with Sonzinsky v. United States (1937), federal courts have consistently upheld the NFA as a valid exercise of Congress’ taxing power. The registration and related requirements were treated as necessary to collecting the transfer and making taxes.
Dozens of cases ended up at that same result. Congress enacted the National Firearms Act in 1934 purely as a tax measure under the Taxing Clause (Art. I, § 8, cl. 1) to constrain the market for certain “gangster weapons.” No other reasoning or source of authority was ever provided by Congress.
Fast forward nearly a century, to Aug. 5 when Judge James Wesley Hendrix, United States District Judge for the Northern District of Texas, struck down the NFA’s remaining registration requirements in the consolidated cases of Jensen v. ATF and Silencer Shop Foundation v. ATF. While Jensen is a SAF-supported case, the organization is itself a named plaintiff in another case, Brown v. ATF, and is backing yet a third NFA lawsuit in Roberts v. ATF. SAF’s sister organization, the Citizens Committee for the Right to Keep and Bear Arms, however, is a named plaintiff in Jensen along with the FPC Action Foundation, Texas Rifle Association, Hot Shots Custom and three individuals.
As Judge Hendrix explained in agreeing with our arguments, a tax must produce “at least some revenue.” With the transfer and making taxes at zero for the covered arms, the regulatory provisions no longer aid any revenue purpose and cannot be sustained under the Taxing Clause.
The government made several counterarguments, all of which the Court rejected. First, it argued that the special occupation tax levied against importers, manufacturers and dealers still collects revenue. But that tax has its own registration scheme to ensure compliance. The challenged provisions (application, registration, possession, transfer, and making rules) were designed to enforce the transfer/making taxes, not the special occupations tax.
Next, the government argued that the NFA registration requirements are “necessary and proper” to effectuate the special occupations tax. The idea being that if the ATF noticed people registering guns bought from dealers who had not paid that tax, they could bring an enforcement action against those dealers. But the Court rejected that argument because that almost never happened. As noted in the ruling, “At most, 691 defective occupational transfers out of nearly 2.2 million (or 0.03%) could even potentially be linked to the challenged NFA provisions.” Ultimately, the Necessary and Proper Clause cannot supply what the Taxing Clause no longer supports.
Finally, the government turned to the commerce clause, arguing registration was an acceptable requirement under Congress’s power to regulate interstate commerce. The flaw with that argument, however, was that Congress originally enacted the NFA exclusively under the taxing power. The statute is housed in Title 26, uses tax language throughout, lacks any jurisdictional element or interstate-commerce language in the challenged provisions, and was historically administered by the Treasury. Courts cannot retroactively recharacterize a statute under a power Congress never invoked.
While our case also raised a Second Amendment argument for why NFA registration is unconstitutional, the Court opted to not reach that issue, given it ruled it unconstitutional on taxing power grounds, and the relief it had already granted was the maximum we had requested.
The Court stayed its own ruling for 7 days to give the government a chance to seek a longer stay with the Fifth Circuit. While frustrating, that is a normal procedure, especially when Courts issue a first-of-its-kind ruling like this. We don’t know yet if the government will appeal, but our presumption is they will. Importantly, even if the stay is lifted and the ruling goes into effect, relief will be limited to the plaintiffs in the case, and their members or customers.
Overall, the court’s ruling striking down the NFA’s remaining registration scheme is a huge step forward to ensure arms currently covered by the NFA will finally be removed. It’s been almost 100 years in the making, and this is the best opportunity we’ve had to remove even more Second Amendment infringements, much to the delight of gun owners across the nation.
– Kostas Moros, SAF Director of Legal Research and Education
Kostas Moros is the Director of Legal Research and Education for the Second Amendment Foundation. He has been a practicing attorney in California since 2015, and is a member of several federal circuit courts, as well as the Supreme Court Bar. Aside from his litigation experience, Kostas has authored numerous amicus briefs filed in courts around the country, a law review article on why bans on common rifles are historically baseless, and dozens of articles on gun policy. He maintains a very active presence on X under the handle @MorosKostas.