Tax exemptions
Law enforcement, states, and local governments are totally exempt from the making and transfer (either to or from) taxes, but must comply with the registration requirements. While the NFA only specifically provides that there is no transfer tax due when the US government is the transferee, (26 USC sec. 5852(a)), or a state governmental entity (26 USC sec. 5853(a)), ATF has made up an exemption from the transfer tax where any US or state governmental entity is the transferor, see ATF Chief Counsel Opinion numbers 20023 and 20400. Abuse of that exemption, as in transferring guns through governmental entities so as to avoid transfer taxes, has been prosecuted. See U.S. v. Fleming, 19 F.3d 1325 (10th Cir. 1994).
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