In November, residents of Colorado will be asked to decide the outcome of a new bill that could significantly raise the price of a very controversial yet much-loved household item.
House Bill 24-1349
Hot on the heels of California, Colorado lawmakers are debating putting a tax on an American favorite – guns and ammo. House Bill 24-1349 has been passed by Colorado legislators and includes a host of new rules and regulations around the sale of guns.
From Debate to Public Vote
While it has faced significant opposition from various quarters, it will now be put to public vote in the November general elections. But what could this mean for you?
Impact of the Law
If voters give the thumbs-up in November 2024, the new law will kick in from April 1st, 2025, and change how gun-related businesses are taxed in Colorado.
Tax Details
Essentially, the law slaps a 6.5% tax on the money these businesses make from selling guns, gun parts, or ammo in the state. The cash from this tax goes straight into state coffers without any strings attached.
Who Won’t Be Affected by the New Tax
The tax had originally been set at 11% but was lowered throughout the process. There are exceptions to this new tax: police officers, law enforcement agencies, and active-duty military members won’t get hit with this tax when they buy stuff. And it will only affect big sellers who are making more than $20,000 in sales a year.
Reporting Requirements
Businesses selling guns and ammo will need to report and pay this tax every month, and they have to give detailed information to the state’s revenue department and keep meticulous records that the department can check anytime.
Vendor Regulations
The law also makes it harder for people to sell guns in the state. Gun vendors will have to register with the executive director before selling any firearms – otherwise, they’ll be in breach of the law.
Projected Income for the State
Vendor licenses for gun dealers will cost $400 and are predicted to bring in around $900,000 for the state.
Allocation of Funds
The money collected from this tax will go to several important areas. The first $35 million each year will go to helping victims of crime through the Colorado Crime Victim Services Fund. This fund provides support to people affected by crimes, like counseling or financial help.
School Safety Initiatives
Another $10 million will be set aside to improve safety in schools through the school security disbursement program. This money is meant to make schools safer for students and staff.
Mental Health Services
$10 million is earmarked for mental health services. Half of this money will help kids and teenagers get better access to mental health support during tough times. The other half will be used to enhance mental health services for veterans, especially those facing challenges due to their service.
Supporting Crime Victims
Any extra money left over after these allocations will also go to support crime victim services.
Adding Up Federal and State Taxes on Guns
Guns and bullets already come with an 11% federal tax under the Pittman-Robertson Act, not to mention state and local taxes. If Colorado agrees to this new tax it will be the second state to have done so, and will bump the total tax on these purchases up to 19%.
Arguments Against the Tax
Opponents argue that the proposed bill adds an unnecessary financial burden on people looking to buy firearms for self-defense and to exercise their constitutional rights.
NRA’s Position
The lobbying arm of the NRA has come out against the bill, stating, “This tax should be seen as nothing more than an attack on the Second Amendment and those who exercise their rights under it.”
Activist Views
Other gun rights activists have also rallied against the bill, with one remarking it was “an assault on lawful gun owners, law-abiding prospective gun buyers, and the Second Amendment. “
Bill Sponsor’s Defense
But the sponsor of the bill, Democrat Monica Duran, has refuted these allegations, saying, “It’s not removing anything. It’s not impacting anyone’s Second Amendment rights whatsoever. This is really looking at keeping those services available that families, parents, and kids need.”
Future Outlook
The coming months are set to see talks about this bill ramp up, and Colorado’s gun rights activists are sure to make their voices heard.
Consumer Implications
Whether the bill will pass is up in the air, but if it does, Colorado citizens will see a huge markup on any guns or ammo purchases they make from April 1st, 2025.
The post – How Colorado’s Gun Tax Could Affect Your Budget – first appeared on Wealthy Living.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
