Industry News
By Robert M. Hausman

Hidden Gun-Owner Registration Scheme Revealed

Among the many unknown provisions of the national mandatory healthcare law recently passed by Congress is language that will effectively create a national federal database of firearms owners. This fact has been brought out into the open through E.F. Nappen, Esq., general counsel for Pro-Gun New Hampshire, a recently formed group.

Effective January 1, 2012, Nappen writes, the national healthcare law requires all firearms dealers to report to the Internal Revenue Service all of their firearms purchases and any other goods valued at over $600. This reporting requirement applies to purchases made from individuals or companies. IRS 1099 forms will have to be filed in each instance, reporting the purchase by the firearms dealer.

The new regulations apply to all businesses that buy goods from individuals, not just firearms dealers. Thus the law will mandate firearms dealers to send in a 1099 form with the name, address and presumably the Social Security number of the person who sells them a used gun. This personal identifying information will then be sent to the IRS who could use it to create a national database of firearms owners as most people who own guns usually own several.

In addition to being bad for gun owners, the law will create burdensome recordkeeping and reporting requirements on businesses, especially gun dealers. Gun dealers already have mountains of paperwork with 4473s, A&D Bound Book records, receipts, etc. Presently, a 1099 form is required for the sale of goods valued at $5,000 or more. The much lower reporting threshold will capture nearly all sales of firearms by individuals to dealers, creating a de facto gun owner database.

Though firearms dealers presently have to keep detailed acquisition and disposition records, these records are not in a central database maintained by the IRS. This new law, Nappen points out, creates a list of private gun sellers with the IRS. Also, FFLs who fail to file 1099s on those who sold them guns and were paid over $600 may be caught by ATF agents during FFL inspections by way of their A&D books. This will cause ATF and IRS trouble for the gun dealer and tax problems for the private seller.

However there is hope in sight. Rep. Dan Lungren (R-CA) has introduced a bill (H.R. 5141) to repeal this financial reporting mandate section of the healthcare law. The bill was referred to the House Committee on Ways and Means where it has languished since late April. House Passes Bill to Protect Guns from Creditors

In late July, the U.S. House passed a bill that would exempt bankruptcy filers from losing a firearms collection (up to $3,000 in value) from creditors. The bill also allows bankruptcy filers who own only one gun, to keep it, regardless of its value. The bill passed the House by a vote of 307 to 113. A similar measure was introduced in the Senate.

The House measure was introduced by freshman Democratic Rep. John Boccieri of Ohio who said, “We must protect the rights guaranteed to us by our founding fathers, no matter what financial circumstances a citizen might face.”

The National Rifle Association endorsed the measure, noting, “We think it is reasonable for folks who are in financial distress to have an effective means of defending themselves.” Many states already have exemptions on their books for firearms in bankruptcy proceedings.Now the idea is going national - but not everyone likes it.

Anti-gun New York Rep. Carolyn McCarthy (D) argued on the House floor that the bill is a mistake, saying that having guns in households that are going through bankruptcy could increase the risks of suicide and violence. Winchester Ammo’s 2nd Qtr. Sales Gain

Olin Corp.’s Winchester Ammunition division achieved the highest second quarter segment earnings in its history and the second best quarterly earnings ever during the second quarter of 2010, the company reports.

The results reflect the continuation of stronger than normal demand that began in the fourth quarter of 2008 with Democrats sweeping the national elections. During the quarter, Winchester was said to benefit from strong sales to military, and law enforcement customers.

Winchester’s second quarter 2010 segment earnings were $21.1 million compared to $19.1 million in the second quarter of 2009. The increase in segment earnings reflects the combination of lower manufacturing costs and improved pricing, which offset a less favorable product mix and higher commodity costs.

Winchester’s second quarter 2010 sales were $147.7 million compared to $140.6 million in the second quarter of 2009. While military, international and law enforcement sales increased compared to the corresponding quarter in the previous year, commercial sales were lower during the most recent quarter reflecting the start of the slower spring-summer month selling season. For the six months ended June 30, 2010, Winchester’s sales were $279.1 million, compared to $273.5 million during the first half of 2009. Chicago Gun Suit Plaintiffs Apply for Permits

Two years after filing the lawsuit that undid the Chicago handgun ban and applied firearms rights to the states, Otis McDonald walked into a police station and applied for a permit to keep a handgun at home.

The process took only 20-minutes but McDonald told Chicago newspaper reporters that some of the requirements were excessive. He pointed to the $100 application fee, which he said poorer Chicago residents would not be able to afford. There is also the one-gun-a-month limit. Each handgun purchased requires a $100 registration fee. Each handgun owned must be re-registered every three years at a cost of $15 per gun. The initial permit application will take 10-days to three months to process, McDonald was told.

Applicants are required to have a state-issued Firearms Owner’s Identification card (FOID) before they can register a firearm in the city. Also required are four hours of classroom training and spending an hour on a firing range. Applicants must leave the city to obtain the training as the city won’t allow any ranges to admit civilians - they are reserved exclusively for police. “I can’t see to save my life why our government would infringe this on law-abiding taxpaying citizens,” McDonald exclaimed. “This is an inherent right. It was not given based on how much money we’ve got or what we can afford financially.”

McDonald appeared at the police station along with the three other plaintiffs in the suit, all of whom made application. Two weeks after the city rescinded its ban, some 83 applications were filed to buy handguns. NH Governor Vetoes Bill to End Local Dealer Licensing

New Hampshire Governor John Lynch (D) has vetoed legislation that would have scrapped the ability of cities and towns to license handgun sellers. The veto keeps intact a 20-year-old state law.

The sponsor of the legislation called local licensing redundant since the federal government already licenses firearms dealers and regulates firearm sales. State Rep. Daniel Eaton (D), the House majority floor leader, also said local licensing is not uniformly applied. And he warned that towns could use it punitively or for zoning purposes.

Indeed, municipalities in Connecticut have similar authority and have used it punitively. The town of Windsor-Locks, CT recently imposed a $50 vendor’s licensee fee on all vendors at gunshows within the town. The city of Waterbury, CT, while saying it is not against guns, has imposed a $500 vendor license fee on all gun show dealers in the city. Needless to say, there are no gun shows in Waterbury.

Allowing local governments to impose their own rules on gun sellers, even those with storefronts, could effectively put them out of business if a town or police chief decided a local gun seller’s license should cost $5,000 or $50,000 (shades of Chicago’s Mayor Daley and his city council).

Bedford, NH Police Chief David Bailey led the charge against Eaton’s bill saying local licensing applies to some hobbyists who aren’t covered by federal law. While Bedford has no firearm retailers, it licenses a few hobbyists, he said. “There are some that slip through the cracks in the federal system,” Bailey said.

Bailey, who claimed he supports the Second Amendment, showed his actual sentiments are otherwise when he stated he would like to see the state strengthen the local licensing law. He also said the state would get a bad reputation were Lynch to sign the law, noting past criticism that Boston officials have leveled on New Hampshire for its gun laws. “I don’t want to see this as a weak gun state where anyone can get guns here,” Bailey said.

In his veto message, Lynch said New Hampshire police chiefs strongly urged the bill not become law. He said the local license allows for the identification of sellers who may not be subject to federal firearm licensing requirements. “While other state and federal laws prevent selling a firearm to a convicted felon, it does not seem necessary to take away the authority of municipalities,” Lynch said in a statement.

Eaton said the only communities that he knows of with local handgun sales licensing are Bedford and Portsmouth. He’s yet to decide whether to seek an override. Another confusing matter involved the NH Association of Police Chiefs. Eaton said the organization did not oppose the legislation in committee, and its opposition surfaced at the last minute. Most police chiefs aren’t even aware of the licensing requirement, he said. Police Seizure of Dealer’s Inventory Investigated

A criminal investigation has been launched into the disappearance of part of the knife inventory that had been seized by police in New Hampshire in a raid on retailer Abe’s Awesome Armaments in New Hampton.

According to published reports, a court order for the return of the inventory to retailer Abe Foote was secured by his attorney, Evan Nappen. However, when the knives were returned by the police, Foote reported the inventory was missing about 30% of the knives that were seized. The knives were confiscated when Foote was prosecuted under the state’s former switchblade knife regulations.

New Hampshire now has virtually no restrictions on switchblades, stilettos, daggers and dirks due to legislation signed into law on May 18. Retailers report brisk trade in the knives since the law was passed. Import Ban Results in Smuggling in Dominican Republic

The smuggling of arms in all calibers has risen as the result of a civilian firearms import ban enacted in the Dominican Republic and has also spurred a large black market in firearms, the country’s firearms importers say.

The group cited the recent arrest of four customs officials in Santiago on charges of conspiracy to smuggle guns. The country’s four-year-old civilian firearms import ban was promoted by the Interior and Police Ministry.

Legal firearms or those already in the country, have steadily risen in value since the supply of new legal guns was cut off four years ago. As a result, smuggling of firearms has become a lucrative business. Nosler Resumes Shipping After Plant Fire

No injuries were reported from an explosion at the Nosler bullet manufacturing plant in Bend, Oregon on June 2nd.

Five days after the explosion, the company said it was back at work loading ammunition, assembling rifles and shipping orders. Published reports indicated the explosion and fire occurred just after 2 p.m. during a work shift but that all personnel had been evacuated. The incident began with a flash in the ballistics tunnel followed by smoke and then the explosion which blew out a hole in one end of the 80,000-square-foot building.

Fire inspector Jeff Bond noted that Nosler followed an established evacuation procedure that all employees were required to practice and which certainly helped in this instance. Fire officials have determined that a rifle shot in the company’s underground testing facility triggered the fire and explosion which caused an estimated $15 million in damage. Bend Deputy Fire Marshal Susie Lovisco told reporters the “initiating event was related to the testing of a rifle by an employee in the south tunnel” of the concrete underground firing range used for ballistics testing. Lovisco said a “backdraft effect occurred” in the “oxygen starved environment” of the tunnel, with the pressure blowing out the southeast corner of the building. U.S. Gun Purchase Rate Rose 55% Since 2006

Firearms buying by the American public have risen substantially during the last several years with the trend continuing upward, according to background check data compiled by the federal government.

While between 8.5 and 9 million background checks were conducted annually during the years 1999 to 2005, the FBI reported a surge to 10 million in 2006, growing to 11 million in 2007, rising to nearly 13 million in 2008, and hitting nearly 14 million in 2009. The totals indicate a 55% increase in just four years.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

This article first appeared in Small Arms Review V14N2 (November 2010)
and was posted online on February 24, 2012


Comments have not been generated for this article.