April 27, 1994
Senator John H. Kerr, III Post Office Box 1616 Goldsboro, North Carolina 27533-1616
Re: Advisory opinion; Liability of holders of federal firearms dealer’s license for North Carolina firearms privilege license imposed by G.S. 105-80.
Dear Senator Kerr:
From Don Shirley we understand that you have requested our opinion as to the relationship, if any, between the respective state and federal provisions which license firearms. Specifically you inquire whether a holder of a federal permit is automatically liable for the "dealer’s" license required by G.S. 105-80.
18 USC §923(a) prohibits any person from "dealing in firearms" unless licensed by the Secretary of Treasury. Section 921(a)(11) in pertinent part defines "dealer" as an individual "engaged in the business of selling firearms at wholesale or retail. . . ." Section 921(a)(21)(C) defines "engaged in business" as: . . .a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms . . . .
Section 923(b) provides separate procedures for an individual wishing to be licensed as a collector. "Collector" is defined as any person "who acquires, holds, or disposes of firearms or ammunition as curios or relics. . . ." Section 921(a)(13).
G.S. 105-80 levies a license tax upon persons engaged in the business of selling or offering for sale firearms, other than antique firearms. "Engaged in business" is defined almost identically as under the federal provisions, but lacks an express exclusion for "hobby" collections.
There is unmistakable conformity between G.S. 105-80 and its federal counterpart. North Carolina licenses the identical activity which the federal government taxes.
Nevertheless, there is no link between the federal act and possible state liability. The legislature has not made federal licensure, per se, the basis for imposition of the privilege tax levied by G.S. 105-80. It would be improper for the Revenue Department to conclusively presume that a holder of a federal permit is automatically liable for the corresponding state license. There must be a separate inquiry as to liability.
But the department may properly assume liability, and as a general operating policy, regularly issue proposed assessments against holders of federal firearms dealer permits. It is fundamental that "tax assessments are presumed correct." Riggs v. Coble, Sec. of Revenue, 37 N.C. App. 266, 271 (1978). Given the presumptions accorded tax assessments, coupled with the availability of a federal collector’s license, the burden would fall upon the federal permittee to establish why the state license would not also be applicable.
We hope the foregoing is helpful.
Reginald L. Watkins Senior Deputy Attorney General
George W. Boylan
Special Deputy Attorney General