For bulk purchasers, a new M-4 costs about $800 per rifle
I actually thought the cost would have been much lower. A bulk price of $800 seems very steep. I suppose these are not comparable to your average low end AR-15 though.
Full Article on the New York Times website – HERE
Hat Tip: SayUncle
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One thing to remember is that the US government pays excise tax. I would assume the $800 includes excise tax. On a side note, that is considerably cheaper than distributor cost with excise tax.
I don’t think foreign entities have to pay excise tax, but Colt may charge the same just for ease of record keeping.
Are you sure about that? That really seems kind of counterintuitive. That would be as senseless as paying sales tax on items purchased by federal agencies – paid right back to the federal government. In fact, as I think about it, the only taxes I thought government agencies would be responsible for are payroll taxes.
On another note, I’ve seen the unit price listed as 1,000+ from other sources in the past. And I don’t think those estimates include Knights Armament mods.
I am positive. Definitely Peter paying Paul, but the Federal government pays excise tax on firearms. Their are a few exceptions, but I am pretty sure that the DOJ is not one of them.
26 USC §4182(b)
“No firearms, pistols, revolvers, shells, and cartridges purchased with funds appropriated for the military department shall be subject to any tax imposed on the sale or transfer of such articles.”
This leads me to believe that the DOD does not, in fact, pay excise tax on firearms.
I should also point out that it looks like 27 C.F.R. §53.62 also covers exemption for DOD and Coast Guard, and 27 C.F.R. §53.131 covers exemptions for, among other entities, state and local governments.
So it looks like this price does not include the 11% tax on firearms (10% for pistols).
I stand corrected.
It didn’t sound right to me… I had to get to the bottom of that one!
A large chunk of the price is due to the butt load of paperwork necessary for any government contract. Back when I worked for Boeing Military Airplanes we had a joke: the aircraft is ready for delivery when the weight of the paperwork exceeds the weight of the aircraft.
“the aircraft is ready for delivery when the weight of the paperwork exceeds the weight of the aircraft.”
LOL that’s awesome.