(The Center Square) – Arkansas Attorney General Tim Griffin said Wednesday he is appealing a federal judge’s dismissal of a case in Arkansas challenging a new gun sales rule and the case’s transfer to a Kansas court.
Arkansas was part of a 26-state lawsuit challenging a new rule that requires anyone selling a firearm to register as a dealer.
Judge James Moody Jr. dismissed the case in the U.S. District Court for the Eastern District of Arkansas Delta Division and moved the case to a federal court in Kansas. The court ruled Arkansas lacked standing to challenge the rule because it would benefit because the sales tax on gun sales would be higher than a 1% tax the state collects on gun show tables.
“It appears that the court believed that (1) firearms sold at gun shows by unlicensed sellers are not subject to sales tax in Arkansas, and as a result of the Final Rule (2) gun show sales would be ‘diverted to a licensed dealer’ who would charge sales tax. Thus, an increase in collected 6.5% sales tax could offset the loss of 1% table-rental tax revenue,” the attorney general’s office said in the challenge.
But that’s not the case, Griffin said.
“…contrary to the unbriefed assumption by the Eastern District of Arkansas, any firearm sales which previously would have been made by unlicensed sellers at gun shows that are diverted to licensed sellers as a result of the Final Rule would not result in any increase in sales-tax revenue,” Griffin said. “Instead, Arkansas would suffer a loss in special-event tax revenue from a lower number of table rentals at gun shows. Additionally, to the extent that sales by unlicensed sellers at gun shows—who are required to collect sales tax—are diverted to different unlicensed sellers outside of gun shows—who may not be required to collect sales tax—that would result in a further decrease in revenue.”
Griffin said the court also skirted a rule requiring district clerk courts to wait a “reasonable period” before transferring a case.
“That precedent exists to ensure the Eighth Circuit can review and correct erroneous transfer orders before they become effective, yet the Little Rock order unlawfully short-circuited that process, depriving Arkansas of the opportunity to obtain reversal of the district court’s erroneous order,” Griffin said in a statement.
The gun sales rule is another example of overreach by the Biden administration, the attorney general said.
“This rule harms Arkansans, and Arkansas’s standing in the case should never have been in question,” Griffin said.
