A 1934 Tax Just Lost Its Teeth: Here Is What Did Not Change

Most firearms retailers can recite the routine from memory. A customer picks out a suppressor, pays for it, fills out the paperwork, submits fingerprints, and then goes home without it. For months he checks his email, calls the store to ask whether anything has come in, and eventually walks back through the front door to pick up something he paid for long ago.

This is the process for as long as I can remember, and I’m fairly “old.”

Very few people on either side of the counter know where that routine came from. Plenty of customers have lived under the weight of the National Firearms Act their entire adult lives without ever learning why it exists, what it was designed to do, or why a law written during the Great Depression still shaped how they bought a suppressor last year.

Before we talk about what changed on October 9, I want to spend a few minutes on that history.

The National Firearms Act was signed in June 1934, just after the end of Prohibition. As an aside, it seems like after Prohibition, many government employees were about to be out of work, so…

According to ATF's own history of the law, Congress believed certain firearms posed a significant crime problem because of their use in the gangland crimes of that period, and ATF specifically points to the St. Valentine's Day Massacre. The Act covered machine guns, rifles and shotguns with barrels shorter than16 and 18 inches respectively, a category of concealable firearms called "any other weapons," and silencers.

Congress did not simply ban those items. It taxed them.

The NFA was passed under Congress's authority to tax, and it placed a $200 tax on making or transferring these firearms, along with an occupational tax on people engaged in the business of manufacturing, importing, or dealing in them. ATF's history notes that the tax had a purpose beyond collecting revenue. The intent was to curtail, if not prohibit, transactions in these firearms, and the $200 figure was considered severe enough to accomplish that.

A Congressional Research Service report notes that $200 was roughly the average cost of a machine gun at the time. In other words, the tax roughly doubled the cost of a machine gun. On most items, that $200 tax never changed after 1934. Inflation slowly killed the dollar’s buying power and turned what was once a prohibitive penalty into a manageable fee, but the paperwork, the registration, and the wait remained.

The Department of Justice's original proposal also covered pistols and revolvers. During the House debate that June, supporters of the revised bill explained that the handgun provision had been removed, and the version Congress passed covered machine guns, short-barreled rifles and shotguns, other concealable weapons, and silencers. Handguns were left out.

I would give anything to see the debate transcripts on this. Can you imagine them even considering including pistols and revolvers?

Much of the NFA reflects decisions made by a particular Congress under a particular set of circumstances nearly a century ago. The list of regulated items was a product of its time. It was negotiated, revised, and narrowed, and then it was left largely in place for generations.

The NFA has also been repaired and reshaped more than once. As originally written, the law required people who possessed unregistered NFA firearms to register them, and that information could be shared with state authorities. In 1968, the Supreme Court held in Haynes v. United States that this requirement violated the Fifth Amendment protection against self-incrimination. According to ATF, that decision made the 1934 Act virtually unenforceable.

However, just as happens today, the anti-gun lobby did not give up.

Congress responded the same year. Title II of the Gun Control Act of 1968 rewrote the NFA to cure the constitutional problem, removed the ability of a possessor to register an unregistered firearm, and expanded the law to include destructive devices. The Supreme Court upheld the revised structure in 1971.

The last major change most retailers know well happened in the not too distant past. In 1986, the Firearm Owners' Protection Act prohibited transferring or possessing machine guns that were not lawfully possessed before May 19, 1986, with exceptions for government agencies. That date still shapes the machine gun market today.

The NFA has always been a structure built on a tax, adjusted by courts and Congress as circumstances changed. This year, it happened again.

The One Big Beautiful Bill Act, signed July 4, 2025, reduced the NFA making and transfer tax to $0 for short-barreled rifles, short-barreled shotguns, silencers, and "any other weapons," effective January 1, 2026. Machine guns and destructive devices kept the $200 tax.

For a while, that changed the cost but not the process. Customers still filed forms, still registered items, and still waited.

Then, on August 5, 2026, a federal district court in the Northern District of Texas ruled in Silencer Shop Foundation v. ATF. As ATF describes it, the court held that once the tax was reduced to zero, the NFA's registration and transfer provisions for those items were no longer a valid exercise of Congress's taxing power. The court also held those provisions could not be upheld under Congress's power over interstate commerce, because Congress did not rely on that power when it passed the NFA in 1934.

That injunction only applied to the plaintiffs and certain other specified persons. On October 9, ATF Director Robert Cekada signed an open letter extending relief much further. In his video announcement, the Director said the policies would apply to all Americans, not just the plaintiffs in the litigation.

According to the open letter and the FAQ ATF published the same day, ATF will no longer require individuals to seek approval under the NFA before making or transferring short-barreled rifles, short-barreled shotguns, silencers, or "any other weapons," and it will no longer require those items to be registered in the National Firearms Registration and Transfer Record.

ATF also says it will not enforce the NFA marking requirement or the prohibition on transporting unregistered items of this kind across state lines. ATF will continue to accept Form 1, Form 3, and Form 4 applications from anyone who wishes to submit them voluntarily. ATF describes this as an exercise of enforcement discretion. The statute itself has not been repealed.

ATF was also clear about what did not change, and the letter lists five specific limits. The special occupational tax still applies to anyone engaged in the business of manufacturing, importing, or dealing in these items, and the FAQ states that licensees may not engage in business involving them without paying it. Machine guns and destructive devices remain fully subject to the NFA.

Every Gun Control Act requirement still applies, which means a Form 4473, a NICS check unless the buyer is otherwise exempt, record-keeping, and the prohibition on transfers to prohibited persons.

Individuals transporting short-barreled rifles and shotguns across state lines should continue to file Form 20. The Gun Control Act also still requires the Attorney General to authorize dealer sales of short-barreled rifles and shotguns. ATF says it is writing regulations to create that process and will not enforce the requirement until those regulations exist.

The fifth limit is the one customers will ask about. ATF states that neither the injunction nor the new enforcement policy affects state or local law. It notes that many state laws contain exceptions for items registered under or possessed in compliance with federal law, and it will not say whether an unregistered item satisfies those laws. The Gun Control Act still prohibits a licensee from transferring a firearm in violation of state or local law.

Two states show how much the fifth limit can change the picture for the same customer buying the same suppressor.

Texas removed suppressors from its list of prohibited items in 2021. House Bill 957 struck the old Penal Code language that allowed a silencer only when it was possessed "in compliance with federal law," and the change took effect September 1, 2021.

A Texas dealer looking at a suppressor sale is therefore not working around a state requirement tied to the federal registry. The federal rules ATF still enforces apply to that sale. The registry requirement ATF has stopped enforcing does not.

One note of caution here as well. I am working from the 2021 bill that made that change, and state codes can be amended, so a Texas retailer should confirm the current language of Penal Code Section 46.05 before relying on it.

Washington is written differently. RCW 9.41.250 makes it a gross misdemeanor to use "any contrivance or device for suppressing the noise of any firearm unless the suppressor is legally registered and possessed in accordance with federal law."

ATF has said it will continue accepting registrations voluntarily, but it has also said it cannot tell anyone whether an unregistered suppressor satisfies a state law like this one. A Washington retailer could follow the federal guidance to the letter and still leave his customer exposed under state law.

Short-barreled rifles add another layer. Washington allows them "if the person is in compliance with applicable federal law" under RCW 9.41.190. Texas still ties short-barrel firearms to the federal registry unless the item is "otherwise not subject to that registration requirement."

Whether ATF's decision not to enforce a requirement satisfies wording like that is a question for state courts and state officials, not for the store.

None of this means you should freeze. It means that before your store changes how it sells these items, you and an attorney who knows your state's firearms law should read your own statute line by line.

ATF also warns that enforcement could resume if circumstances change. Congress could impose a new tax, the court's injunction could be overturned, or the Department could rescind its guidance. ATF notes that federal law does not automatically grandfather unregistered items, and any amnesty would be at the Attorney General's discretion.

Imagine a regular customer walking in on Saturday morning. He bought a suppressor from you last spring and is still waiting on the approval. He has watched three videos on the subject, read a few comments online, and wants to know whether he can take the suppressor home today.

Before you answer, he asks a second question. Can he take his braced pistol home and install a stock on it this afternoon? Then he asks a third. What happens to all this if the law changes again next year?

Some of those questions have answers in ATF's guidance, and some depend on state law. A few depend on events nobody can predict yet.

From the customer's perspective, the store is the place where the law becomes real. He does not want a lecture or a guess. He wants to know that the people behind the counter have read the guidance, understand where the boundaries are, and will tell him when something still needs to be checked.

Customers will also remember who gave them clear, careful answers while everyone else was repeating whatever they saw online.

I think this is a great first step, and I am encouraged by what has happened over the past few months. For nearly a century, customers have carried the cost, paperwork, and waiting that came with this law, often without understanding where it came from.

At the same time, as with all things related to most regulated industries, confusion still remains and prudence is required. It will take a while for the dust to settle, so better to be cautious than not.

You can welcome a change and still take the time to understand it. If anything, the businesses that handle the next few months carefully will be in the strongest position when the remaining questions are answered.

If you are wondering where to start, I would not begin by redesigning your entire NFA process. I would start with a single week of preparation.

First, read the open letter and the FAQ yourself instead of relying on someone else's summary. Then sit down with your team and agree on how your store will answer the most common questions, including what people should say when the honest answer is "let me confirm that." Make sure the whole team is giving customers the same answer.

Next, speak with an attorney familiar with your state's firearms laws about whether unregistered items create problems under state or local law. ATF has made it clear that responsibility belongs to you.

Finally, keep track of every NFA question that comes in for the week, through the counter, the phone, email, or social media. You may find the same five questions coming up again and again. Those questions can become an FAQ page, a staff briefing, or an email to your customers.

The law that shaped this part of your business was written in 1934. The way you explain this change to your customers will be written by you.

Coreware helps firearms retailers and ranges keep their records, inventory, and customer communication organized in one place, so when a regulation changes, you can understand who is affected, answer questions consistently, and reach the right customers with the right information.

To learn more, visit coreware.com.