Beginning July 2024, Chapter 231 of 2023 (AB 28, Gabriel) imposed an 11 percent excise tax on retail sales of firearms, firearm precursor parts, and ammunition, with some exemptions. We described this tax in more detail in a February post.
Current Revenue Estimate Much Lower Than in Bill Analysis. As Chapter 231 went through the legislative policy process, the administration preliminarily estimated that the new firearm and ammunition excise tax would raise $159 million in 2024-25. In May 2024, the administration revised its estimate to $103 million. The administration’s current estimate is $65 million.
Administration’s Current Estimate Reasonable. For firearm and ammunition excise tax returns filed for the first three quarters of 2024-25, the total amount of tax due is $44 million. Preliminary revenues tend to differ modestly from actual revenues for various reasons, such as delays in filing or payment. The administration’s estimate seems reasonable, as it is not far from what the state would collect if the fourth quarter of the fiscal year were similar to the first three quarters.