Since it was signed into law in 1937 by Franklin D. Roosevelt, the Pittman-Robertson Act has been the cornerstone of American wildlife conservation. The original act took over an 11 percent excise tax on firearms and ammunition, which Department of the Interior distributed to state fish and wildlife agencies via a formula based upon their geographic size and hunting license sales. Over the years, the act has been amended several times to include an excise tax on bows (including crossbows), arrows and anything attached to a bow as well as pistols. The funds must be spent on wildlife habitat and conservation, hunter education and shooting ranges.
Nearly everyone agrees the excise tax has resulted money well spent nationwide. Iconic wildlife species from whitetails to wood ducks have been restored. Critical habitat has been conserved. Hunter education has made hunting a safe and family-friendly activity. The construction of shooting ranges has provided access to such facilities for millions of Americans. The tangible benefits of the tax have given it the continuing support of the industry.
“Our members are for the most part understanding of the 11 percent excise tax, because it goes to a good cause,” sways Mitch King, director of government relations for the Archery Trade Association.
King says he and ATA president Jay McAninch spend time showing their members how the excise tax is spent. Sometimes, as larger corporations acquire smaller companies, executives tightly focused on the bottom line need extra convincing. This is especially true if they see competitors taking advantage of loopholes in the law.
A case in point is the manufacture of arrows. The law once read that components of arrows were exempt from the tax if they were shipped outside the U.S. Some manufacturers began shipping their components overseas and then shipping the finished arrows back to the U.S., thus avoiding the tax. The ATA worked to modify the law so all arrows were subject to the tax. In related matters, the ATA sometimes work with IRS auditors to make sure they all interpret the tax law in the same way, maintaining a level playing field for manufacturers across the country.
Overseas distributors and retailers have discovered a way that they can duck the tax by buying products directly from manufacturers and then using electronic marketing to sell the products back into the U.S. directly to the hunters. Instead it becomes the responsibility of the consumer. However, it doesn’t make practical or fiscal sense for the IRS to track down every individual purchase, so the tax goes unpaid. This practice is so lucrative (not paying the tax allows the distributor to sell products at a lower price) that one company is building a facility in Canada, because it is cheaper to ship into the U.S. from there than from overseas.
Loopholes in Pittman-Robertson excise tax program like this create an uneven playing field in the industry and represent a significant threat to the future of the program. The easiest fix to the loopholes might be to get rid of the Pittman-Robertson excise tax. Given the program’s importance to state fish and wildlife funding, this obviously isn’t a viable fix or even one wildlife managers, hunters and the industry that pays the taxes care to contemplate. Still, King says, there is a need to close the loopholes as a matter of fairness.
Not all hunting products are subject to the Pittman-Robertson tax. Let’s pay a visit to your favorite outdoor box store. You see those endless racks of camo clothes? They’re not taxed. How about those tree stands? Nope. However, the sight you buy for your compound is taxed, because it attaches to the bow. Ironically, the scope you buy for your deer rifle is not. The bottom line is that a significant amount of hunting products are not covered by the Pittman-Robertson tax.
“When you go back to the beginnings of Pittman-Robertson, many of these products didn’t exist,” King says. “Bows and arrows were added in the 1950s.”
“There has been discussion amongst the industry about adding items (to the excise tax),” he continued, “but the headaches of adding a new tax in this day and age usually short-stops the discussion.”
And then there is another factor: tariffs. Most outdoor clothing or the materials are manufactured overseas. Companies may pay up to 30 percent tariffs when they import their goods to the U.S. In conversation, some of those companies wouldn’t mind if a portion of the tariff was appropriated to wildlife conservation rather than simply going into the overall federal budget, but again in this day and age that is very unlikely to occur.
Even though nationwide participation in hunting has been relatively stable during the past decade, the amount of money collected via Pittman-Robertson has nearly tripled. In 2007, the total number of American paid hunting license holders was 14.5 million and Pittman-Robertson appropriations were approximately $267 million. In 2015, America had 14.8 million paid hunting license holders and Pittman-Robertson appropriations reached a whopping $808 million. So what happened?
Some call it the “Obama Bump.” A tremendous surge in gun and ammunition sales has occurred during the Obama years. Even though those new recreational shooters aren’t necessarily taking up hunting, the Pittman-Robertson tax applies to their firearm and ammunition purchases. This leads to a new challenge for the funding program. While the money can be used to build shooting ranges, currently rules only allow for a very limited amount to be devoted to such purposes. King says advocates are working to allow more money to be spent on firearm and archery ranges.
In an increasingly urbanized America, many people have limited or no access to places to shoot, much less hunt. Many, too, are entirely new to shooting or archery. New ranges need to be sited where they not only provide opportunities for urbanites, but, as King points out, they should include introductory ranges where novices can learn the ropes. Creating such facilities should enhance rather than detract from Pittman-Robertson’s core mission of wildlife and habitat conservation by supporting a growing cadre of new shooting and archery enthusiasts, including hunters.