Colorado鈥檚 new voter-approved gun initiative has a target unlike those of previous measures meant to reduce gun violence. The tax on guns and ammunition is meant to generate revenue to support cash-strapped victim services, and it鈥檚 an open question whether it will affect firearms sales.
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The 6.5% tax on manufacturers and sellers 鈥� including pawnbrokers 鈥� of guns, gun parts, and ammunition will generate an estimated $39 million a year. The money is aimed primarily at crime victim services, including groups that help victims of domestic violence. Some of it is earmarked for behavioral and mental health for veterans and youth, and a sliver will support school security.
Firearm deaths in Colorado since at least 2006, growing more quickly than the state鈥檚 population, and with a notable bump in homicides early in the covid pandemic, which prompted a national . The tax could have public health effects beyond generating money for social services, researchers said. But they don鈥檛 know for sure because only one other state, California, has a gun-and-ammo tax 鈥� an 11% tax that has been in effect only since July.
directs the Firearm Injury Prevention Initiative at the University of Colorado School of Medicine and wonders if the tax will change consumer behavior. 鈥淭he question is whether that will change gun sales or not,鈥� she said.
A has been levied on gun manufacturers for more than a century 鈥� currently at 10% for pistols/revolvers and 11% for other kinds of firearms, plus cartridges and shells.
Colorado state Rep. and Majority Leader Monica Duran, a Democrat, co-sponsored , scheduled to take effect in April. Voters approved it in November as Proposition KK. The connection between firearms and domestic violence is stark: Nationally, every month are killed by an intimate partner using a gun. that 59% of mass shootings between 2014 and 2019 in the United States were related to domestic violence.
Support groups for victims of domestic violence and other crimes receive funding through the 1984 federal Victims of Crime Act. Those dollars mostly come from fines and penalties from convicted federal criminals and fluctuate annually the Department of Justice pursues. Federal prosecutions and fines have dropped, so the state鈥檚 pot of money has , when Duran was first elected, to about $14 million in 2024 鈥� a 76% drop.
But the need for victim support services has grown, said Duran, who is a gun owner and a survivor of domestic violence who used such services to escape homelessness.
Colorado鈥檚 new tax is what economists call a 鈥� which seeks to compensate financially for the societal toll or damage a product causes. For example, people who drive cars pay a tax on gas, which goes toward repairing roads.
鈥淚t鈥檚 not because you鈥檙e a bad driver that we鈥檙e taxing gasoline. It鈥檚 because we need this money to be able to improve our infrastructure in ways that allow people to continue to use that product,鈥� said , an economist who co-directs the Rand Gun Policy in America initiative.
She said Colorado鈥檚 gun tax is similar: It supports the social infrastructure that鈥檚 required in a society with firearms.
In 2022, the U.S. that people can carry a gun outside their homes for self-defense. Smart said the decision made it harder to pass laws restricting gun possession and highlighted the importance of historical precedent. Both the California and Colorado tax laws cite taxes passed by eight states and then-independent Hawaii between 1844 and 1926.
The actual effect of the Colorado and California laws won鈥檛 be known for some time. But should other states pursue similar policies, researchers think focusing taxes on specific weapons or places might be more effective at reducing harm, rather than simply generating revenue.
Smart, for example, found that if the goal is to reduce harm, would be to follow the lead of alcohol policies and have based on an item鈥檚 likelihood to cause harm.
, a doctoral candidate in economics at Stanford University, at the national level, by rejiggering the federal tax to be 13.3% on handguns and nothing on long guns, would prevent deaths while holding industry profits steady.
The Colorado tax applies to firearms dealers, manufacturers, and ammunition vendors that make at least $20,000 a year (excluding sales to law enforcement or active-duty military). Neither state officials nor lawmakers nor industry groups could confirm what fraction of firearm businesses that represents. According to , about 2,200 firearms dealers or pawnbrokers and manufacturers of ammunition/firearms operate in the state. Ammunition sellers aren鈥檛 tallied in that figure.
Some firearms businesses worry the tax will drive people across state lines to purchase guns.
鈥淲e鈥檝e already got people saying, 鈥榃ell, we can run over to Utah or Wyoming instead,鈥欌�� said Frank Sadvar of Northwest Outfitters, a gun store and pawn shop in Craig. The city is a 40-minute drive to Wyoming and 1陆 hours to Utah.
鈥淭he way it was worded on the ballots, it looked really good,鈥� he said. But Sadvar suspects the revenue will fall short of the $39 million estimated because supporters didn鈥檛 factor in sales lost to other states.
In Cortez, which is a half-hour drive from New Mexico, Jesse Fine said he鈥檚 heard people say they鈥檇 rather drive there to buy a gun than pay the tax in Colorado 鈥� even though they鈥檇 face a there.
Fine, who manages Goods for the Woods, an outdoor gear shop carrying a range of firearms and hunting equipment, said he believes the tax discriminates against gun owners who are exercising their civil rights.
鈥淚t makes it hard for a mom-and-pop shop to stay in play,鈥� he said. 鈥淲e鈥檙e going to take the biggest hit because we鈥檙e not a big corporation.鈥�
Victim services organizations said they will be in a tight spot financially until the new tax鈥檚 revenue starts to fully flow in 2026.
Courtney Sutton, public policy director of the , said most victim service agencies in the state, many of which are members of COVA, 鈥渉eavily, heavily rely on鈥� the federal funds that have been ballooning up and down.
鈥淲e did get $6 million from the state budget, but that鈥檚 not very much across 215 programs,鈥� she said, referencing the state鈥檚 four victim services coalitions.
The new tax is estimated to bring in $30 million a year to such groups.
Rocky Mountain Victim Law Center executive director said she hopes the new tax revenue will help the center restart a program for people sorting out protection orders, housing issues, and name changes, among other things. Nestaval said that, for now, crime victims in Colorado are on their own.
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