OSD 273: Estimating gun sales through Pittman-Robertson taxes
Every month, the NSSF publishes some data that looks like this:
That takes the number of NICS checks (which the FBI publishes) and adjusts it to produce the “NSSF-adjusted NICS” check estimate:
The adjusted NICS data are derived by subtracting out NICS purpose code permit checks and permit rechecks used by several states such as Connecticut, Illinois, and Utah for CCW permit application checks as well as checks on active CCW permit databases.
(Side note, since the blog post from which that excerpt comes was published, Utah has gone to permitless carry. But the methodology still holds up for other states.)
This is a useful, albeit rough, proxy for the number of guns that are sold each month. But it doesn’t tell us much about the size of the industry. Let’s get to the dollars.
The most useful data source comes from tax revenues, of all things. Since 1937, the Pittman-Robertson Act has taken an excise tax on outdoors equipment and allocated the proceeds towards government wildlife programs. The tax is collected from manufacturers and importers, and it’s charged based on the wholesale price of the goods. The tax rates are:
Handguns: 10%
All other firearms, as well as ammo, gun parts, and archery equipment: 11%
The NSSF reported that in 2023, $944 million out of $998 million in Pittman-Robertson excise tax was paid for guns and ammo. The breakdown of annual averages is that 34% of P-R tax comes from ammo, 25% from handguns, 32% from other firearms and gun parts, and 9% from archery equipment. So put that all together and you get that in 2023, P-R tax was:
Ammo: $353 million
Handguns: $259 million
Other firearms and gun parts: $332 million
Given the tax rates for each category, that means total wholesale revenue for US sales in those categories was:
Ammo: $3.21 billion
Handguns: $2.59 billion
Other firearms and gun parts: $3.02 billion
Wholesale → retail markup varies widely, so we’ll estimate it conservatively at an average of 15%. That would mean that total retail revenue for US sales in 2023 was:
Ammo: $3.69 billion
Handguns: $2.98 billion
Other firearms and gun parts: $3.47 billion
That lands you at guns and ammo being a $10 billion/year business in the US, and that’s before you count the almost-certainly-even-bigger industry of all related accessories. This roughly tracks with the NSSF’s estimate of $33.49 billion in direct economic output from the industry.
Some other industries for comparison:
Golf equipment in 2022: $7.2 billion
Ski equipment in 2022: $13.5 billion
Not too shabby. We often discuss how guns are a small industry that punches above its weight. And that’s true if the industries you’re comparing to are the truly massive ones like real estate, finance, or tech. But if you compare to consumer-goods industries, it turns out that guns aren’t so small after all.
This week’s links
Gun owner killed by police after coming to the door armed
Unfortunately a story we’ve seen many times before. We covered the underlying themes in:
Civil War as radical literalism
A novel review of the movie.
Is your car safe from supermaneuverable air-fefense fighter aircraft?
Good NFA news from Ian at Forgotten Weapons
The new batch of machine guns is a nice bonus. But one-week eForm 4’s is an absolute gamechanger. If it holds, it is going to revolutionize the silencer and SBR markets. The silencer market is already on a rocket ship, as we described two weeks ago.
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It’s really interesting to see that the civilian gun industry seems to be just as big as the golf and ski industries which are much more normalized. I wish more people would realize this, six months ago I wrote an article encouraging people to talk about their guns because too many people think that it is something abnormal.
Based on this evidence having guns is clearly normal, talking about guns and going shooting should be normalized so that more people recognize it is normal and less people feel like the second amendment is some outdated dangerous law that should be done away with.
Great data and way to show how big the industry really is. The comparison does show how normal it is as well. The industry seems small but it's not, and all the companies that choose not to do business are short sighted and missing out. That's ok it gives other companies the opportunity to fill the void.