New Bill Bans State and Local Excise Taxes on Guns and Ammo Sales Affecting Interstate Trade

The "Freedom from Unfair Gun Taxes Act of 2025" is short, but it packs a punch for state and local budgets. This bill aims to stop state and local governments from collecting an excise tax on the sale of firearms, ammunition, or any related parts. Crucially, this ban applies specifically to sales that involve or affect interstate trade—meaning virtually any commercial sale by a manufacturer or dealer could be covered.

The Tax Break: Who Pays Less, Who Gets Less

Think of an excise tax as a specific tax tacked onto a particular product, often levied at the manufacturer or distributor level. This bill essentially eliminates a revenue stream for local governments. For instance, if your county currently charges a 2% excise tax on firearm sales that helps fund local parks or school safety programs, that tax would be illegal under this new federal rule (Sec. 2). While this might mean a slightly lower price tag for the consumer buying a new rifle or a box of shells, the real impact is felt by the local government that loses that specific pot of money.

For state and local governments, losing even a small excise tax can create a budget hole that must be filled somewhere else—perhaps by cutting services or raising other taxes. However, the bill does make one important clarification: it does not touch the existing federal Pittman-Robertson Wildlife Restoration Act (Sec. 2). That’s the decades-old law that imposes a federal excise tax on firearms and ammunition, with the revenue going directly to state wildlife conservation efforts. So, the big federal conservation tax stays, but the smaller, specific state or local taxes are out.

Preemption and the Local Budget Squeeze

This legislation is a classic case of federal preemption, where the national government steps in to override state and local authority on a specific issue—in this case, taxation. By tying the prohibition to sales affecting "interstate or foreign commerce," the bill uses the federal government’s power to regulate trade to block local governments from using this specific fiscal tool. If you’re a city manager, this bill means you lose flexibility in how you raise revenue for local needs. If you’re a taxpayer, you need to watch where the money that used to come from that excise tax will be replaced, or which local services might get trimmed instead.

Ultimately, this bill provides a clear financial benefit to firearm manufacturers, dealers, and potentially consumers by removing a layer of tax complexity and cost. But the cost is transferred to the state and local governments who will have to figure out how to make up the difference, potentially impacting local services or conservation efforts that weren't covered by the federal Pittman-Robertson funds.