United States v. Rock Island Armory, Inc., 773 F.Supp. 117 (C.D.Ill. 1991)
UNITED STATES of America, Plaintiff,
ROCK ISLAND ARMORY, INC., and David R. Reese,
United States District Court, C.D. Illinois.
June 7, 1991.
Bradley Murphy, Asst. U.S. Atty., Peoria, Ill., for
Richard Parsons, Peoria, Ill., for Armory.
Thomas Penn, Peoria, Ill. and Stephen P. Halbrook, Fairfax,
Va., for Reese.
MIHM, District Judge.
Pending before the Court are Defendants' motion to dismiss the original
indictment and a motion to dismiss the superseding indictment. On May 24, 1991,
the United States filed a motion to dismiss the original indictment of August
23, 1990, in favor of the superseding indictment. That motion is granted. The
original indictment is dismissed. The Court finds that Defendants Rock Island
Armory, Inc. and David R. Reese have stated a valid challenge to certain counts
of the superseding indictment. Accordingly, the Court hereby dismisses Counts
1(a) and (b), 2, and 3 of the superseding indictment.
After oral argument on the above motions, but before entry of a final order,
the United States filed a motion to reconsider the Court's decision to dismiss
the above counts. After careful consideration, the Court hereby denies the
motion to reconsider.
The superseding indictment alleges that Defendants committed acts in respect
to the making and registration of "firearms," i.e.,
machineguns, in the years 1987 and 1988
which violated parts of the National Firearms Act, Chapter 53 of the Internal
Revenue Code, 26 U.S.C. §§ 5801 et seq. Specifically, Count I
alleges in part that Defendants conspired "(a) to manufacture firearms in
violation of Title 26, United States Code, Sections 5822 and 5861(F) [AND] (B) to knowingly deliver into interstate commerce
firearms in violation of Title 26, United States Code, Sections 5822 and
5861(j)...." Count 2 alleges that
in 1988, Defendants made machineguns "in violation of the registration
provisions of Title 26, United States Code, Section 5822," which is
alleged to have violated 26 U.S.C. § 5861(f). Count 3 alleges that
Defendants delivered into interstate commerce the same machineguns as in Count
2, and that these machineguns "had not been registered as required by the
provisions of Title 26, United States Code, Section 5822," in violation of
26 U.S.C. § 5861(j).
Since its passage in 1934, the registration, taxation, and other
requirements of the National Firearms Act ("NFA") have been upheld by
the courts under the power of Congress to raise revenue. However, 18 U.S.C. § 922(o), which became
effective on May 19, 1986, prohibits possession of machineguns, and thereby
repealed or rendered unconstitutional the portions of the National Firearms Act
which provided for the raising of revenue from the making, possession, and
transfer of machineguns made after such date. As the government conceded at
oral argument, the United States refuses to register or accept tax payments for
the making or transfer of machineguns made after 1986. Thus, § 922(o), as applied to machineguns
made after May 19, 1986, left the registration and other requirements of the
National Firearms Act without any constitutional basis.
(1) Except as provided in paragraph (2), it shall be unlawful
for any person to transfer or possess a machinegun.
(2) This subsection does not apply with respect to —
(A) A transfer to or by, or possession by or under the authority of, the
United States or any department or agency thereof or a State, or a department,
agency, or political subdivision thereof; or
(B) any lawful transfer or lawful possession of a machinegun that was
lawfully possessed before the date this subsection takes effect.
As interpreted and administered by the Bureau of Alcohol, Tobacco and
Firearms ("BATF"), U.S. Department of the Treasury, § 922(o)
prohibits the private possession of any machinegun not made and registered
before May 19, 1986. Thus, since May 19, 1986, BATF has refused to approve any
application to make, transfer, register, and pay the $200 tax on any machinegun
made after that date. Before that date,
BATF approved such applications pursuant to 26 U.S.C. §§ 5812 and
5822. Farmer v. Higgins, 907 F.2d 1041, 1042-44 (11th Cir.1990),
cert. denied, 498 U.S. 1047, 111 S.Ct. 753, 112 L.Ed.2d 773 (1991)
(upholding BATF's denial of an application to make and register a machinegun by
a private collector under § 5822).
As applied to machineguns alleged to be possessed after May 19, 1986,
prosecutions may no longer proceed under 26 U.S.C. § 5861. This is because
the National Firearms Act is part of the Internal Revenue Code, and its
provisions — including registration of machineguns possessed after May 19,
1986 — are valid only to the extent they aid in the collection of tax
revenue. Since BATF would not register and accept tax payments for any
machinegun after May 19, 1986, registration of machineguns made and possessed
after that date no longer serves any revenue purpose, and such registration
requirements are invalid. Since 18 U.S.C. § 922(o) is interpreted to ban
registration and taxation of machineguns under the National Firearms Act,
§ 922(o) effectively repeals such registration and taxation provisions.
Congress has no enumerated power to require registration of firearms. However,
since registration of firearms may assist in the collection of revenue,
Congress passed the National Firearms Act in 1934 pursuant to its power to tax.
Section 922(o) destroys the constitutional basis of registration.
In the 1934 hearings, Attorney General Homer S. Cummings explained in detail
how the NFA would be based on the tax power. National Firearms Act: Hearings
Before the House Committee on Ways and Means, 73rd Cong., 2d Sess., 6 (1934).
Cummings denied that machineguns could be banned, because "we have no
inherent police power to go into certain localities and deal with local crime.
It is only when we can reach those things under ... the power of taxation, that
we can act." Id. at 8.
When Congressman Harold Knutson asked "why should we permit the
manufacture, that is, permit the sale of the machine guns to any one outside of
the several branches of the Government," Congressman Sumners suggested
"that this is a revenue measure and you have to make it possible at least
in theory for these things to move in order to get internal revenue?"
Id. at 13-14. Cummings agreed: "That is the answer exactly."
Id. at 14. The following dialogue ensued:
Attorney General CUMMINGS.... If we made a statute absolutely
forbidding any human being to have a machine gun, you might say there is some
constitutional question involved. But when you say, "we will tax the
machine gun," ... you are easily within the law.
Mr. LEWIS. In other words, it does not amount to prohibition, but allows of
Attorney General CUMMINGS. That is the idea. We have studied that very
Id. at 19.
The National Firearms Act was originally passed as a taxing statute under
the authority of Nigro v. United States, 276 U.S. 332, 48 S.Ct. 388, 72
L.Ed. 600 (1928). See National Firearms Act: Hearings Before the
Committee on Ways and Means, supra, at 101-02, 162. Upholding the
Harrison Anti-Narcotic Act, Nigro noted:
"In interpreting the act, we must assume that it is a
taxing measure, for otherwise it would be no law at all. If it is a mere act
for the purpose of regulating and restraining the purchase of the opiate and
other drugs, it is beyond the power of Congress and must be regarded as
276 U.S. at 341, 48 S.Ct. at 390. The Court added:
Congress by merely calling an act a taxing act cannot make it a
legitimate exercise of taxing power under § 8 of article 1 of the Federal
Constitution, if in fact the words of the act show clearly its real purpose is
Id. at 353, 48 S.Ct. at 394.
The committee reports on the National Firearms Act mention the
constitutional basis of federal jurisdiction. The House Ways and Means
Committee report, which the Senate Finance Committee report repeats verbatim,
explained the basis of the NFA in part as follows:
In general this bill follows the plan of the Harrison
Anti-Narcotic Act and adopts the constitutional principle supporting that act
in providing for the taxation of fire-arms and for procedure under which the
tax is to be collected.
Rept. No. 1780, Committee on Ways and Means, U.S. House of Representatives,
73rd Cong., 2d Sess. 2 (1934); Rept. No. 1444, Committee on Finance, U.S.
Senate, 73rd Cong., 2d Sess. 1 (1934).
The Seventh Circuit was the first to enunciate the rule that the National
Firearms Act is solely a tax measure. In Sonzinsky v. United States, 86
F.2d 486 (7th Cir.1936), aff'd, 300 U.S. 506, 57 S.Ct. 554, 81 L.Ed. 772
(1937), the Court of Appeals considered the validity of the requirement that a
dealer in firearms register with the collector and pay a special excise tax of
$200 per year. The Court found the NFA to be constitutionally valid as under
the taxing power of Congress in Article I, § 8 of the Constitution.
Rejecting the argument that the NFA's real purpose was suppression of crime,
the Court held:
The act ... evidences no announced purpose outside the
constitutional authority. [It is] unusually free from regulative
provisions, merely providing for a tax in varying amount upon different
classifications of persons and requiring such persons to register....
Id. at 490.
The Supreme Court affirmed the Seventh Circuit in Sonzinsky, 300 U.S.
506, 57 S.Ct. 554. The defendant argued:
that the present levy is not a true tax, but a penalty imposed
for the purpose of suppressing traffic in a certain noxious type of firearms,
the local regulation of which is reserved to the states because not granted to
the national government.
Id. at 512, 57 S.Ct. at 555. In other words, the defendant contended
that the Tenth Amendment power of the states to regulate firearms in their
criminal codes was an exclusive power not delegated to the federal government.
The Supreme Court found the National Firearms Act on its face to be a
revenue measure and nothing more. The Court noted:
The case is not one where the statute contains regulatory
provisions related to a purported tax in such a way as has enabled this Court
to say in other cases that the latter is a penalty resorted to as a means of
enforcing the regulations.... Nor is the subject of the tax described or
treated as criminal by the taxing statute.... Here Section 2 contains no
regulations other than the mere registration provisions, which are obviously
supportable as in aid of a revenue purpose. On its face it is only a taxing
Id. at 513, 57 S.Ct. at 555.
The Court upheld its validity precisely because the National Firearms Act
was a revenue measure only and did not purport to exercise any general criminal
power not delegated to Congress by the Constitution. Moreover, the Court
refused to speculate into any reasons why Congress might have taxed certain
Inquiry into the hidden motives which may move Congress to
exercise a power constitutionally conferred upon it is beyond the competency of
the courts.... They will not undertake, by collateral inquiry as to the measure
of the regulatory effect of a tax, to ascribe to Congress an attempt, under the
guise of taxation, to exercise another power denied by the Federal
Here the annual tax of $200 is productive of some revenue. We are not free
to speculate as to the motives which moved Congress to impose it, or as to the
extent to which it may operate to restrict the activities taxed. As it is not
attended by an offensive regulation, and since it operates as a tax, it is
within the national taxing power.
Id. at 513-14, 57 S.Ct. at 556.
Since the rule is unquestioned, the Seventh Circuit has had no occasion to
consider it further, other than to cite Sonzinsky and to note that
"the constitutionality of this Act has already been sustained."
United States v. Lauchli, 371 F.2d 303, 313 (7th Cir.1966).
Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923
(1968) invalidated certain registration requirements of the Act as being in
violation of the rights against self-incrimination. The court described the
registration requirement as "part of the National Firearms Act, an
interrelated statutory system for the taxation of certain classes of
firearms." Id. at 87, 88 S.Ct. at 725. "All these taxes are
supplemented by comprehensive requirements calculated to assure their
collection.... [For example,] every person possessing such a firearm is obliged
to register his possession with the Secretary...." Id. at 88-89, 88
S.Ct. at 726.
In Haynes, the government argued "that the registration
requirement is a valid exercise of the taxing power, in that it is calculated
merely to assure notice to the Treasury of all taxable firearms."
Id. at 98, 88 S.Ct. at 730. Citing Sonzinsky, the Court replied:
We do not doubt, as we have repeatedly indicated, that this
Court must give deference to Congress' taxing powers, and to measures
reasonably incidental to their exercise; but we are no less obliged to heed the
limitations placed upon those powers by the Constitution's other commands. We
are fully cognizant of the Treasury's need for accurate and timely information,
but other methods, entirely consistent with constitutional limitations, exist
by which such information may be obtained.
The National Firearms Act was reenacted as Title II of the Gun Control Act
of 1968. Congress rejected a proposal that would not have been based on the
power to tax. Fred B. Smith, General Counsel of the Treasury Department, noted
that the proposal "would make it unlawful for a person under 21 years of
age to possess a National Firearms Act firearm." Federal Firearms Act:
Hearings Before the Subcommittee to Investigate Juvenile Delinquency, Judiciary
Committee, U.S. Senate, 90th Cong., 1st Sess., 1088 (1967). Smith stated:
It seems doubtful that the ... provision can be justified under
the taxing or commerce powers, or under any other power enumerated in the
Constitution, for Federal enactment. Consequently, the Department questions the
advisability of including in the bill a measure which could be construed as an
usurpation of a (police) power reserved to the states by Article X of the
United States Constitutional Amendments.
Id. at 1089.
Since reenactment of the National Firearms Act, the various circuits have
continued to follow the Sonzinsky rule. United States v. Ross,
458 F.2d 1144, 1145 (5th Cir.1972), cert. denied, 409 U.S. 868, 93 S.Ct.
167, 34 L.Ed.2d 118 states:
The test of validity is whether on its face the tax operates as
a revenue generating measure and the attendant regulations are in aid of a
revenue purpose.... Section 5861(d) making possession of an unregistered weapon
unlawful is part of the web of regulation aiding enforcement of the transfer
tax provision in section 5811. Having required payment of a transfer tax and
registration as an aid in collection of that tax, Congress under the taxing
power may reasonably impose a penalty on possession of unregistered weapons.
Such a penalty imposed on transferees ultimately discourages the transferrer on
whom the tax is levied from transferring a firearm without paying the tax.
The prosecution argues that the NFA is still a tax act because criminal
violators only will be assessed the "tax." Response to Defendant's
Motion to Dismiss the Indictment at 6. This begs the question, because the
government refuses to register the making or transfer of a post-1986 machinegun
on behalf of an applicant who is not being prosecuted, and will not register
any firearm even when it imposes a tax assessment. Thus, the registration requirement — which
the government interprets as repealed by § 922(o) — is still left
without any tax nexus. Moreover, the
"tax" assessed cannot be voluntarily paid by a would-be taxpayer, but
is paid only by tax violators. This indicates that the $200 "tax" is
really a fine, just as is the $10,000 for which one may be "fined"
upon conviction of an NFA offense. 26 U.S.C. § 5871. Since both apply only
to NFA criminal violators, both the $200 assessment and the $10,000 fine are
"fines," not taxes. Criminal fines are not constitutional as
encompassed under Congress' power to raise revenue, but must pass
constitutional muster under an enumerated power. Under the prosecution's
argument, the federal government could totally usurp all local criminal
jurisdiction, under the guise that the fines imposed would really be taxes
because they raise revenue.
The above use of the word "fine" was made clear in
Browning-Ferris v. Kelco Disposal, 492 U.S. 257, 109 S.Ct. 2909, 106
L.Ed.2d 219 (1989). Commenting on the Eighth Amendment's proscription on
"excessive fines," the Court noted that "at the time of drafting
and ratification of the Amendment, the word 'fine' was understood to mean a
payment to a sovereign as punishment for some offense." Id. at 266,
109 S.Ct. at 2915, 106 L.Ed. at 232. Similarly, as stated in United States
v. Mississippi Tax Comm'n, 421 U.S. 599, 606, 95 S.Ct. 1872, 1877, 44
L.Ed.2d 404 (1975): "An 'enforced contribution to provide for the support
of government,' [is] the standard definition of a tax. United States v. La
Franca, 282 U.S. 568, 572 [51 S.Ct. 278, 280, 75 L.Ed. 551] ...
(1931)." The reference to La Franca, which invalidated a
"tax" on alcohol made illegal by state law, explains:
By § 35, supra, it is provided that upon evidence of an
illegal sale under the National Prohibition Act, a tax shall be assessed and
collected in double the amount now provided by law. This, in reality, is but to
say that a person who makes an illegal sale shall be liable to pay a
"tax" in double the amount of the tax imposed by pre-existing law for
making a legal sale, which existing law renders it impossible to make. A tax is
an enforced contribution to provide for the support of government; a penalty,
as the word is here used, is an exaction imposed by statute as punishment for
an unlawful act. The two words are not interchangeable, one for the other. No
mere exercise of the art of lexicography can alter the essential nature of an
act or a thing; and if an exaction be clearly a penalty it cannot be converted
into a tax by the simple expedient of calling it such.
This issue was again resolved adverse to the government in United States
v. Constantine, 296 U.S. 287, 294, 56 S.Ct. 223, 226, 80 L.Ed. 233 (1935).
A statute provided for a federal assessment for one who violated a state liquor
law. The Court held that it would be invalid "if, in fact, its purpose is
to punish rather than to tax." Id. No federal jurisdiction existed
to enforce alcohol Prohibition, because the Eighteenth Amendment had been
repealed. Id. Similarly, no federal jurisdiction exists to ban mere
possession of machineguns, and the NFA provisions at issue are not supported by
the tax power to the extent they enforce a prohibition rather than taxation.
As Constantine held, "a penalty cannot be converted into a tax
by so naming it ... [W]e hold that it is a penalty for the violation of State
law, and as such beyond the limits of federal power." Id. The Court
The condition of the imposition is the commission of a crime.
This, together with the amount of the tax, is again significant of penal and
prohibitory intent rather than the gathering of revenue. Where, in addition to
the normal and ordinary tax fixed by law, an additional sum is to be collected
by reason of conduct of the taxpayer violative of the law, and this additional
sum is grossly disproportionate to the amount of the normal tax, the conclusion
must be that the purpose is to impose a penalty as a deterrent and punishment
of unlawful conduct.
We conclude that the indicia which the section exhibits of an intent to
prohibit and to punish violations of State law as such are too strong to be
disregarded, remove all semblance of a revenue act and stamp the sum it exacts
as a penalty. In this view the statute is a clear invasion of the police power,
inherent in the States, reserved from the grant of powers to the federal
government by the Constitution.
Id. at 295-96, 56 S.Ct. at 227.
It is well established that Congress may tax both legal and illegal
activities. Marchetti v. United States, 390 U.S. 39, 44, 88 S.Ct. 697,
700, 19 L.Ed.2d 889 (1968). Gambling
and other acts which may be illegal under state law may be taxed, and
registration may be required to assist in collection of the tax as long as
registration information is not shared with the police, since such sharing
would violate the privilege against self-incrimination. Id. Registration
is among the "ancillary provisions calculated to assure their [i.e., the
taxes] collection."Id. at
42, 88 S.Ct. at 699. In contrast with the federal taxation and registration of
conduct made illegal under state law, which the courts have upheld, the case at
bar involves federal taxation and registration requirements which the
government interprets as repealed by a federal statute making post-1986
machineguns illegal. In short, the government registers gamblers and accepts
their tax payments; it refuses to accept registrations and tax payments for the
making of machineguns.
The prosecution also asserts that "machine guns may still be
manufactured, and therefore taxed, under 18 U.S.C. § 922(o)(2)(A)."
Response at 6. Yet the government has successfully argued that that provision
allows manufacture only for official government use. Farmer v. Higgins,
907 F.2d at 1042-44. Manufacture for government use is exempt from any tax. 26
U.S.C. §§ 5852, 5953. Also, this argument fails to address the fact
that the United States refuses to register any post-1986 machineguns, thereby
severing any tax nexus for this registration requirement, with which compliance
In its motion to reconsider, the prosecution reiterates that the government
can tax an item or activity which is illegal. Yet the very framing of this
proposition presupposes that the activity can and will be taxed. By contrast,
in the case at bar, the government interprets 18 U.S.C. § 922(o) to
prevent the registration and taxation of post-1986 machineguns made for private
purposes under the National Firearms Act, 26 U.S.C. § 5801 et seq.
The prosecution relies on Marchetti v. United States, supra, 390 U.S.
at 44, 88 S.Ct. at 700, which held that reporting requirements for taxation of
illegal gambling may not violate the privilege against self-incrimination. Yet
implicit in Marchetti is the rationale that registration provisions are
constitutional if and only if they assist in collection of revenue. As
The taxes are supplemented by ancillary provisions calculated to
assure their collection. In particular, § 4412 requires those liable for
the occupational tax to register each year with the director of the local
internal revenue district.
Id. at 42, 88 S.Ct. at 699. Illegal gamblers are allowed to register
and pay the tax. Alleged makers of machineguns after 1986 are not.
The prosecution also relies on dictum in a footnote in Minor v. United
States, 396 U.S. 87, 90 S.Ct. 284, 24 L.Ed.2d 283 (1969), which held that a
reporting requirement by drug buyers does not violate a drug seller's privilege
against self-incrimination. The prosecution, relying on a statement in the
dissenting opinion (396 U.S. at 100, 90 S.Ct. at 290), claims that it was
impossible to pay the drug tax in that case. The Act in question required
dealers to register with the Internal Revenue Service and pay a special
occupational tax, and required producers or importers to purchase stamps and
affix them to the package. Registered dealers could secure order forms to
transfer drugs. Id. at 94, 90 S.Ct. at 287. While the Court focused on
the self-incrimination issue, it noted that "there were some 400,000
registered dealers under the Harrison Narcotics Act in 1967 and that registered
dealers can readily get order forms issued in blank." Id. at 97, 90
S.Ct. at 289.
As the Court noted, a tax measure is valid even though it may deter an
activity, revenue is negligible, or the activity may be illegal. 396 U.S. at 98
n. 13, 90 S.Ct. at 289 n. 13. Indeed,
since being passed in 1934, the National Firearms Act has imposed occupational
taxes, making and transfer taxes of $200 per firearm, and stringent
registration requirements. Yet these taxation requirements did not amount to a
prohibition, and registration retained a tax nexus.
In any event, the interpretation of the constitutional basis of the specific
statute in this case is governed by Sonzinsky v. United States, supra,
300 U.S. 506, 57 S.Ct. 554 and its progeny, not by dictum in a footnote in an
unrelated narcotics case. Sonzinsky held that "the mere
registration provisions ... are obviously supportable as in aid of revenue
purpose." Id. at 513, 57 S.Ct. at 555. Haynes v. United
States, supra, 390 U.S. at 87, 88 S.Ct. at 725, repeated that the National
Firearms Act is a tax measure, and that registration is "calculated to
assure [tax] collection." Id. at 88-89, 88 S.Ct. at 725-26. The Act
was described as a tax measure again in United States v. Freed, 401 U.S.
601, 602-03, 91 S.Ct. 1112, 1114-15, 28 L.Ed.2d 356 (1971).
The enactment of 18 U.S.C. § 922(o) in 1986 removed the constitutional
legitimacy of registration as an aid to tax collection. This is because the
government interprets and enforces § 922(o) to disallow registration, and
refuses to collect the tax. Farmer v. Higgins, 907 F.2d 1041, 1042-44
(11th Cir.1990), cert. denied, 498 U.S. 1047, 111 S.Ct. 753, 112 L.Ed.2d
773 (1991). Thus, § 922(o) undercut the constitutional basis of
registration which had been the rule since Sonzinsky.
Finally, the prosecution quotes an enactment passed in 1968 that the
provisions of Title I of the Gun Control Act shall not modify or affect the
National Firearms Act. However, the
1968 Congress cannot bind the Congress of 1986, which decided to ban transfer
and possession of machineguns. P.L. 99-308, 100 Stat. 453 (May 19,
1986). Further, a Congressional
declaration in 1968 does not solve a constitutional problem which arose in
1986. The ban enacted in 1986, and the government's refusal to accept
registrations and tax payments, simply left the registration requirements with
no constitutional basis. It is the duty of the judiciary to declare such laws
unconstitutional. Marbury v. Madison, 1 Cranch. 137, 176-77, 2 L.Ed. 60
In sum, since enactment of 18 U.S.C. § 922(o), the Secretary has
refused to accept any tax payments to make or transfer a machinegun made after
May 19, 1986, to approve any such making or transfer, or to register any such
machinegun. As applied to machineguns made and possessed after May 19, 1986,
the registration and other requirements of the National Firearms Act, Chapter
53 of the Internal Revenue Code, no longer serve any revenue purpose, and are
impliedly repealed or are unconstitutional. Accordingly, Counts 1(a) and (b),
2, and 3 of the superseding indictment are
1. "The term firearm means ... (6) a
machinegun...." 26 U.S.C. § 5845(a).
No person shall make a firearm unless he has (a) filed with
the Secretary or his delegate a written application, in duplicate, to make and
register the firearm on the form prescribed by the Secretary or his delegate;
(b) paid any tax payable on the making and such payment is evidenced by the
proper stamp affixed to the original application form; (c) identified the
firearms to be made in the application form, in such manner as the Secretary or
his delegate may by regulation prescribe; (d) identified himself in the
application form in such manner as the Secretary or his delegate may by
regulation prescribe, except that, if such person is an individual, the
identification must include his fingerprints and his photograph; and (e) obtain
the approval of the Secretary or his delegate to make and register the firearm
and the application form shows such approval. Applications shall be denied if
the making or possessing of the firearm would place the person making the
firearm in violation of the law.
3. 26 U.S.C. § 5861 provides that
"it shall be unlawful for any person — ... (f) to make a firearm in
violation of the provisions of this chapter...."
4. 26 U.S.C. § 5861 provides that
"it shall be unlawful for any person — ... (j) to transport, deliver,
or receive any firearm in interstate commerce which has not been registered as
required by this chapter...."
5. Article I, § 8 of the Constitution
provides: "The Congress shall have power to lay and collect taxes, duties,
imposts, and excises...."
6. The preface to the superseding
indictment states that under federal law and regulation:
(g) Machine guns registered according to law before May 19,
1986, could be sold to the general public; and
(h) machineguns registered on or after May 19, 1986, could
be sold only to governmental bodies and police agencies, and not to the general
(c) ... [M]anufacture.... Manufacturers qualified
under this part may ... manufacture machine guns on or after May 19, 1986, for
sale or distribution to any department or agency of the United States or any
State or political subdivision thereof ... The registration of such machineguns
under this part and their subsequent transfer shall be conditioned upon and
restricted to the sale or distribution of such weapons for the official use of
Federal, State or local governmental entities. Subject to compliance with the
provisions of this part, manufacturers qualified under this part may
manufacture machineguns on or after May 19, 1986, for exportation in compliance
with the Arms Export Control Act (22 U.S.C. 2778) and regulations prescribed
thereunder by the Department of State....
(e) The making of machineguns on or after May 19,
1986. Subject to compliance with the provisions of this part, applications
to make and register machineguns on or after May 19, 1986, for the benefit of a
Federal, State or local governmental entity (e.g., an invention for possible
future use of a governmental entity or the making of a weapon in connection
with research and development on behalf of such an entity) will be approved if
it is established by specific information that the machinegun is particularly
suitable for use by Federal, State or local governmental entities and that the
making of the weapon is at the request and on behalf of such an entity.
8. In a second case involving the same
defendant, the Court noted that tax stamps for transfer of NFA firearms could
be purchased from the Internal Revenue Service like postage stamps, with no
information demanded of the buyer. Lauchli v. United States, 481 F.2d
408, 410, 412 (7th Cir.1973).
9. The prosecution reiterated at oral
argument on May 22, 1991, that the United States will not accept tax payments
or registrations, but will assess a "tax" only on the illegal making
of a machinegun.
10. The duty of the Secretary of the
Treasury to register firearms, which the government considers to be repealed by
18 U.S.C. § 922(o) as to post-1986 machineguns made for the private
market, is set forth in 26 U.S.C. § 5841 as follows:
(a) Central registry —
The Secretary or his delegate shall maintain a central
registry of all firearms in the United States which are not in the possession
or under the control of the United States. This registry shall be known as the
National Firearms Registration and Transfer Record. The registry shall include
(1) identification of the firearm;
(2) date of registration; and
(3) identification and address of person entitled to
possession of the firearm;
(b) By whom registered —
Each manufacturer, importer, and maker shall register each
firearm he manufactures, imports, or makes. Each firearm transferred shall be
registered to the transferee by the transferror.
(c) How registered —
.... Each importer, maker, and transferor of a firearm
shall, prior to importing, making, or transferring a firearm, obtain
authorization in such manner, as required by this chapter or regulations issued
thereunder to import, make or transfer the firearm, and such authorization
shall effect the registration of the firearm required by this section.
11. This issue was also addressed in
Lipke v. Lederer, 259 U.S. 557, 561-62, 42 S.Ct. 549, 550-51, 66 L.Ed.
1061 (1922), concerning the National Prohibition Act, which imposed a
"tax" on illegal liquor. The Court held:
The mere use of the word "tax" in an act primarily
designed to define and suppress crime is not enough to show that, within the
true intendment of the term, a tax was laid.... When by its very nature the
imposition is a penalty, it must be so regarded.... It lacks all the ordinary
characteristics of a tax, whose primary function "is to provide for the
support of the government," and clearly involves the idea of punishment
for infraction of the law, — the definite function of a penalty.
Id. at 561-62, 42 S.Ct. at 550-51.
12. Marchetti does not describe
pre-1986 law under the National Firearms Act regarding the making of
machineguns, because such activity was lawful when all applicable taxes were
paid and registration requirements were fulfilled. Lauchli v. United
States, 481 F.2d 408, 411-12 (7th Cir.1973) ("these provisions were
clearly directed at law-abiding persons as well as criminally suspect
13. In contrast with Treasury's
regulations prohibiting registration of the making of machineguns after 1986
for private purposes, 27 C.F.R. § 179.105, gamblers — including
illegal gamblers — are allowed to register on a special form and to pay
the tax. See 26 U.S.C. § 4412; 26 C.F.R. § 44.4412-1.
14. In this footnote, the Court remarked
that the stringent requirements "operated to prevent" many
people from obtaining drugs (id. 396 U.S. at 98 n. 13, 90 S.Ct. at 289
n. 13) (emphasis added), but does not suggest that it was impossible to
register as a dealer and to pay applicable taxes. Indeed, the cases cited by
the court upheld the drug taxes because they could be paid, and because
reporting requirements assisted in collection of the revenue. United States
v. Doremus, 249 U.S. 86, 39 S.Ct. 214, 63 L.Ed. 493 (1919) ("the
legislation enacted [must have] some reasonable relation to the exercise of the
taxing authority conferred by the Constitution"); Nigro v. United
States, 276 U.S. 332, 341, 48 S.Ct. 388, 390, 72 L.Ed. 600 (1928) ("in
interpreting the act, we must assume that it is a taxing measure, for otherwise
it would be no law at all.").
Nothing in Minor suggests that tax payments would not
be accepted, and no registration scheme was at issue. No further jurisprudence
on this statute has been forthcoming because in 1970, Congress repealed the
Harrison Narcotics Act and the provisions of the Internal Revenue Code at issue
in Minor, and enacted the Comprehensive Drug Abuse Prevention and
Control Act under the constitutional power to regulate interstate commerce.
P.L. 91-513, Tit. II, § 101, 84 Stat. 1242 (October 27, 1970); U.S.Code
Cong. & Admin.News 1970, at 4566, 4567, 4595, 4647. As the Congressional
findings codified in 21 U.S.C. § 801 state, Congress deemed it
constitutional to regulate mere transfer and possession of drugs only because
they were found to have a substantial and direct effect on interstate
15. Section 104 of the Gun Control Act of
1968, P.L. 90-618, 82 Stat. 1226, states: "Nothing in this title or the
amendment made thereby shall be construed as modifying or affecting any
provision of (a) of the National Firearms Act (Chapter 53 of the Internal
Revenue Code of 1954)...."
16. Indeed, § 109(b), P.L. 99-308,
100 Stat. 460, created a Title I provision, which modified or affected a
provision of the NFA. Clearly, the 1986 Congress did not feel bound by the 1968