Proposition KK: What voters should know about Colorado’s proposed excise tax on guns, ammunition
Proposition KK, referred to the Nov. 5 ballot by the state legislature's Democratic majority, would impose a new 6.5% excise tax on guns and ammunition. If approved, the estimated $39 million it generates each year would fund an array of mental health and support services — some of which are at risk of running out of money.
Most of the money would go to nonprofits that run grant-funded support programs for victims of crime.
In Colorado, voter approval is required for tax increases under the state constitution's Taxpayer's Bill of Rights. A simple majority is needed for passage.
Here's what you need to know about the proposal:
How would Proposition KK affect gun and ammunition purchases in Colorado?Under the measure, most firearm dealers, gun manufacturers and ammunition sellers in Colorado would have to pay a 6.5% excise tax on qualifying sales starting April 1.
If approved, retailers would likely pass on many of those costs to consumers who buy guns and ammo in the state.
That translates to $33 in new taxes on a $500 handgun, or $65 in taxes on a $1,000 rifle; $20 worth of ammunition would cost an extra $1.30 in taxes.
In addition to firearms and ammunition, the tax would apply to many gun parts and accessories, as well as equipment used to manufacture firearms.
Some gun and ammunition sales would be exempt from the new tax. It would not apply to businesses with less than $20,000 in annual sales. Gun purchases by law enforcement agencies as well as police and active duty military officers would be exempt. Private sales from one individual to another would not be subject to the tax, either.
It's not clear how the tax might affect gun sales.
There have been few empirical studies of how taxes affect gun purchases or gun-related crimes. The new California law that the proposal was modeled after has only been in effect a few months, and it imposed an 11% excise tax, nearly double that of Proposition KK.
Nonetheless, supporters and opponents of the measure say it could reduce access to guns in Colorado.
Supporters hope that will lead to less gun violence. Opponents say it will just make it harder for law-abiding residents to buy one; they say it could also drive gun sales across state lines to places that don't impose extra taxes on firearms, hurting Colorado businesses.
How much tax money would Proposition KK raise, and how would it be spent?The measure, authorized by House Bill 1349 , is expected to generate up to $39 million a year.
State agencies expect to spend up to $400,000 on administrative costs. Here's how the rest of the money would be distributed:
The bulk of the money would go to Colorado's Crime Victim Services Fund, a grant program that's been shrinking for years as federal funding to support crime victims dries up.
Last year, the grants helped fund 23 programs that worked with more than 18,000 people harmed by crime — many of them women and children who have suffered domestic violence or sexual assault. Most of the programs are run by nonprofits, such as the Colorado Coalition Against Domestic Violence, Colorado Legal Services and the Tennyson Center for Children.
Federal funding for these services peaked in 2018, when Colorado received $57 million through the Victims of Crimes Act. But due in part to shifts in federal prosecution strategies, the fines and settlements that used to fund the program have dropped precipitously since then. Colorado is slated to receive just $14 million this year, and lawmakers won't have federal pandemic aid dollars to fall back on as they've done in recent years.
Without new funding, state budget officials say , the nonprofit grant recipients will likely have to lay off workers and scale back the services they provide.
How are guns taxed in Colorado today?Gunmakers today are charged a federal excise tax of 10% for handguns and 11% for ammunition and all other firearms. The proceeds fund national wildlife conservation and hunting programs.
In Colorado, gun buyers also pay state and local sales taxes, which apply to most goods. The sales tax rate varies by where you live, topping out at 11.2% in Winter Park. Denver residents pay 8.81%.
Who is spending money to support and oppose Proposition KK?Through Sept. 30, Colorado Supports Crime Victim Services had raised $75,936 this year and spent $66,772 in support of the measure. Donors include anti-gun violence groups and nonprofit organizations that work with victims.
A committee formed in opposition to the measure, Stop Tax Increases, had not filed a campaign finance report as of Oct. 4, drawing a series of delinquency notices from the Colorado Secretary of State's Office.
The Democratic-controlled state legislature passed the bill authorizing the referendum 60-33, largely along party lines.
Other resources:Nonpartisan legislative staff creates a guide for each initiative on the statewide ballot. You can find their analysis of Proposition KK here .You can read the full text of the ballot measure here .
