Manufactoring license???????????

Yeah, it was that Wilson boy. Never did like him as president. The excise tax was first imposed on the manufacture and remanufacture of firearms in February 1919. I guess you need a little pocket change to recover all the wealthy people's properly lost in the great war too.
 
I'm a government employee, an enforcer of rules and regulations, but not these rules and regulations. However, I do have considerable experience in reading, interpreting and applying gov't regulations.

First the caveat. I am not an expert on BATF regulations and I'm not a lawyer and I haven't stayed at Holiday Inn Express recently, - but - I can tell you this, regulatory enforcement people can and do make mistakes regarding the inpretation of regulations. Even agencies that are charged with the responsibility to create regulations from legislation can get it wrong. That is what the courts are for.

That being said:

My take on reading the posted BATF regulations is that the mfg of the action with a serial # clearly needs a mfg license. Any gunsmith/company buying the action from the mfg and using it to build a rifle for sale to a customer is also a mfg and needs the mfg license. If a customer buys a custom action from an FFL and gives it to a gunsmith to add a barrel, trigger, stock etc. this is not mfg and does not need a mfg license. My interpretation is that a mfg can sell the action (considered the firearm) to you and have it sent to an FFL (that may or may not have a mfg license) to do the paperwork. The FFL dealer in essence sells you the action. You can then give the action to an FFL gunsmith to add the barrel, stock, trigger etc and this would not be considered mfg per paragraph 5.

This is how I read the regulation, as it was presented here. If I was given the regulations, as presented here, and asked to enforce it - that is how I would interpret it. Someone else could read it and decide otherwise. This type of stuff happens all the time. Inspectors in my agency have disagreements on the interpretation/enforcement of regulations all the time. Most of the time the Agency chimes in with the "official interpretation" and sometimes even they get it wrong too. Again, that is what the courts are for.

As I read it, the gunsmiths that might get into trouble here are the ones making spec guns for sale. If the gunsmith is buying the action from the action Mfg., adds the barrel, stock, trigger etc to the action and then sells the assembled firearm, that seems to me to meet the definition of manufacture, unless it was a one time event. Anyone routinely selling spec rifles or adding components on an action that the smith has purchased and is reselling, would be mfg.

If you are a mfg or gunsmith being visited by the BATF and facing this issue, there is nothing wrong with politely saying to the agent "As I read it, I'm not a mfg because I'm not buying the action, my customer is buying the action and I am just adding the barrel and stock and, as indicated in paragraph 5, this does not qualify as manufacturing." If the agent disagrees and especially if they can not explain clearly why your interpretation is wrong, direct him/her to your lawyer. You don't have to just roll over and accept a verbal interpreation presented to you by an agent, inspector, or regulator. Ask for an official interpretation in writing and then give that to your attorney for review.

An agency's interpretation can be wrong and courts overturn these interpretations all the time. Professional organizations are oft times the best ones to handle these issues. Has the mfg in question contacted the National Shooting Sports Federation (NSSF) or the NRA? If not, they should do so.
 
Don Stith said:
Tim/RBS
You don't know the story nor the current BATF interpretation. Unfortunately, DJB is correct, . Apparently only one of the custom action makers has 'gotten the word'. I don't know the whole story, so maybe the problem is limited to the maker DJB ordered from.

The exise tax on a finished rifle is a lot more than on just an action. Just guess which interpretation the Govt. is going to choose.
Action @ $1100 times 11% vs Action plus trigger plus custom barrel plus finished stock. roughly $2800 times 11% Add on the paper work that will be required of the smith to collect and report the tax and his fees will go up again.
It is going to be a long 4 years
Don
Click to expand...

No Don, I know the story and the ATF response to "some"questions depending on how the question is asked. Go over to the other forums. Do you really believe, with all the BR smiths here and the CF side that nobody but you and one guy and Wi. got this down? When you buy the action as the end user you effectively bought the gun and can have it stocked or barreled/rebarreled.
 
If the original poster is correct, the ATF is telling the action maker that he (the action maker) cannot ship the action to anyone who is not another manufacturer.

The problem is not the ATF telling the buyer that he can't buy it, they are telling the action maker that the action maker can only ship it to another manufacturer, and that excise tax is due on the completed rifle.

If the ATF does this to all the action makers, then it will become very difficult if not impossible to buy an action unless you are another manufacturer. It looks like the ATF is being asked to ensure that excise taxes are being collected for the completed rifles, not just for the actions. Follow the money.
 
As the original

mfr of an action, this makes no sense. Why would it have to be sent to another mfr versus a dealer. The action in itself is the controlled firearm. IF this is the law, how can a dealer ever buy an action. The middleman mfr would be under the same rules. This really seems ridiculous. I will bet that the specific ATF officer is wrong. I would call the ATF weapons technology branch if in question. One thing for sure though, the action mfr DOES NOT pay excise tax. We are told not to. They do want to collect from the final builder, even if it is the individual. Like I said before though, no excise tax is due if there are less than 50 guns made in a year.
 
Jetmugg said:
If the original poster is correct, the ATF is telling the action maker that he (the action maker) cannot ship the action to anyone who is not another manufacturer.

The problem is not the ATF telling the buyer that he can't buy it, they are telling the action maker that the action maker can only ship it to another manufacturer, and that excise tax is due on the completed rifle.

If the ATF does this to all the action makers, then it will become very difficult if not impossible to buy an action unless you are another manufacturer. It looks like the ATF is being asked to ensure that excise taxes are being collected for the completed rifles, not just for the actions. Follow the money.
Click to expand...

Jetmugg,

Looks like you finally caught up. I've been saying this all day. There's still something you seem to be missing. He's saying Mfr to Mfr to dealer. That's ridiculous. Either this was started to inflame something, or somebody this guy is dealing with does not have the proper license and is giving him a run around.
 
Making sense

I would like to thank Mr Stiller, Madrox and others for posting about the manufacture license issue. After looking over alot of past posts on the law, Madrox Stiller and others brought up a good point. When I was told that I was going to have to go through a person with a manufacture license, I interpreted it to mean that there was going to be another person involved in the new action transfer. As I posted yesterday, the action builder is expecting another ATF vist in a couple days to clairify the excise tax and the manufactor license. I asked again about who can and can not build on a new action and I was told that he now wants to talk to the ATF so he is 100% sure of what needs to be done in the future. I find it hard to believe that I am the only one that talked to him about this. There may be others that decided to wait for more info. One reason I wrote the first post was to try and find out just exactly was is going on, and what to expect in the future, if I our anyone else wants to build a new rifle etc. I have to depend on a smith like alot of others, to do all my building, and when the action builder tells me that someone with a manufacture license will be required to get it done, I was very suprised. Then after the smith talked to the action builder, the smith called me and told me that he refuses to get a manufacture license and will no longer be building on a new action. My new sporter rifle build has been canceld. I was suprised to hear what is now going on, and I would not say that was cause to panic. I am real concearned about the future of our sport and getting rifles built etc. There is a fast way to find out what is going on, and so I chose to mention what happened to me to the knowlagable people on this site. I and others are now getting a better idea of what is going on pertaining to the manufacture license, and I hope others will learn from this also. I did get off on the wrong foot by stating that a manufacutre has to take possesion of the action before the smith can do anything, and realize that is now not the case. I have now learned something about the manufacture involvement, but this situation has still not been totally resolved 100% as far as what it will take to get a new rifle built etc. I was told that if I wanted to rebarrel an action (rifle) I already own, that would be ok. That does not require a manufacture license. If I am wrong about this please be sure to let me and others know what will be required. I hope to find out what the ATF told the action builder, in the next few days. Others may find out what is going on before I do, and I hope that they will let the rest of us know what the real deal is with the enforcement of the manufacture license pertaining to smiths and others while working on rifles etc. Thanks for helping me and others to get things figured out. That was my goal all along. We all need to know what is going on so we may be able to put a stop to what is happening with our gun rights. DJB in Wi
 
MY take on the whole thing.

1. Original mfr of action can send to another type 7, type 1 or individual with 4473 form. (99% sure per atf regs)

2. Upto 49 guns can be built in a year without paying excise tax. (100% per ruling and circular put out in oct 07 or 08)

3. Individual can build a "few" guns for themselves including the action (90% sure per atf regs and interpretations of tech branch)

Here where it gets a little iffy:

4. Type 1 dealers take parts and build rifle whether action is supplied or transfered through them. My take on this is that a type 1 is a dealer, not a builder. By builder I mean install barrel, install stock and deliver. From what I can tell, this is not allowed.

5. Same as above but type 7. This is OK. Here is the deal on type 7. According to the ITAR (arms regs) any mfr in US (whether they export or not) is required to register with state dept. I think yearly fee is $2250. My belief is this person is completely covered to build guns if registered. If building more then 49, all of them need excise tax paid. Excise tax is paid at completion level of gun on total price.

6. Same as 4 above but no license at all. I think this guy may do a "few" for himself and a few tight lipped friends and get away with it, but is probably in violation of law, both atf and state dept due to the ones going to friends.

In addition, I have noticed that if you build any gun parts, you are supposed to be registered. One of our trigger makers is not. The last time I put one of their triggers on the paperwork to apply for export it was denied due to the company making the trigger was not licensed. Based on that, I would say yes, they are somewhat keeping track of whats going on.
 
manufacturing license

The last paragraph explains my post.
Assuming you were the builder.
Actions need a number if made by you.

I have to agree government is out of control
Both partys no exceptions
 
Madrox said:
I've been saying this all day. There's still something you seem to be missing. He's saying Mfr to Mfr to dealer. That's ridiculous. Either this was started to inflame something, or somebody this guy is dealing with does not have the proper license and is giving him a run around.
Click to expand...

I have understood the situation all along.

I didn't want to accuse the Wisconsin poster of anything suspicious, but it seems that he may have been trying to circumnavigate the ATF "recommendation" to the action manufacturer. I think that the ATF wants the new action to be handled only by "licensed manufacturers" until it is ultimately delivered to the customer, who will be expected to pay the full excise tax. I understand the WI poster's desire to not pay this tax, also.

It will certainly be interesting to see how this plays out over the near future - especially if the ATF tells all the gunsmith "assemblers" that they are now "manufacturers" and must pay the fees, have the license, and charge their customers the FET if they assemble more than 50 per year.

SteveM.
 
I think the whole thing is a load of crap. No ATF agent is going out of his way to see to it that the thing stays between manufacturers so they collect the excise tax. The tax has been out there since 1918. No reason not to pay it. The Mfr would send it to the dealer and the ATF would not give a crap.

Bottom line it real quick. No Obama conspiracy here. Just a load of crap either on the poster or his gunsmith.
 
Hypothetically

then if I had 5 rifles setup as switch barrel rigs with 10 barrels each I would need to pay the tax ? Is each barrel combo classed as a NEW rifle ?
 
No, if you built them for resale that may be a stretch of the law though I doubt it. You would simply have 10 custom rifles. If you had them built for yourself, you would not pay the tax unless the gunsmith building them chose to think of them as 50 different rifles, in which case, he's an idiot. Then he pays the tax and passes it on to you. People are fond of saying the ATF wants the customer to pay the tax. The ATF doesn't care who pays the tax but it's assessed at the manufacturers level. Don't believe that just go ask your local gun dealer to look at a blank copy of the excise tax form. Unless he manufactures all you'll get is a blank stare, probably a suspicious one. But who pays the tax? Well, again, unless idiocy is involved, the customer, only he doesn't know it. The manufacturer builds a $100 gun (for simplicity) pays the ATF $11 and charges the customer $115. As far as the customer knows, he's charged $140 plus sales tax by the dealer. Most don't know they're paying an excise tax, which is generally 11% on long guns and 10% on handguns. You millions of Americans do not realize that gasoline is not tax free.
 
I talked to my gunsmith about this, it's pretty simple. A FFL1 gunsmith can build a rifle without consequence if the customer owns and provides all the parts; the gunsmith can provide the stock because it's not part of the firing mechanism.

DBJ ran into trouble because he wanted the mfg'r to send the action to the gunsmith who was going to build the rifle, this is a no-no, it's a straw purchase. What DBJ should have done is get a different FFL1 to order the action, then DBJ buys it from him and then gives it to his gunsmith to do the work. He has to give him the barrel and the trigger too.

Thanks, Douglas
 
Douglas

What you said I believe to be true. THE LAW! AS WRITTEN!

Would it not be good to hear our lawmakers explain just how this round robin of buying and shipping makes our country safer? Guns less likey to get in the wrong hands?

Did you ever wonder how many whiskey stores are robbed with a Benchrest Rimfire .22? Are these single shots used that often in drive by shooting?

Or was this law written for another purpose?

Freedom, Oh Freedom, what happened to our FREEDOM!:(
 
Douglas and Keith.

I would like to see the written law that agrees with your post. I dont see the straw purchase part because it is between dealers and dont quite understand how completely putting a gun together with supplied parts is not manufacturing per all the regs I have read and been told.
 
Mr. Stiller

Please understand I am not a lawyer, or ATF agent, nor a tax collector so I have no inside information. But from your post you seem to be saying if a gunsmith assembles parts into a finished rifle he is manufacturing. I don't read it that way. If he assembled all new parts that had never been used before and he had purchased for the purpose of resell then I would think you correct. But how about a gunsmith that receives a rifle that he simply modifies in some way. Perhaps he has to completely disassemble and reassembly nearly all of it's parts would that mean he manufactured the rifle?

This is where the detail of the original purchase of the parts comes into play. If I own the parts, and those requiring registering are registered in my home state then I think I have the right to send those parts/rifle to a gunsmith to improve or repair them and I don't think the gunsmith is actually manufacturing under the definition of the law. I may be wrong!
 
I dont believe

the ATF cares who buys the parts. An individual can put some small amount of personal guns together. A licensed person does not have the same priviledges as I can tell, especially for hire or others use. And to stay unlicensed, you are really pushing the line. Once you sign up for the FFL, you give up some rights and have more laws to follow. I am not 100% sure either, that is why I asked if you had it in writing. Probably the best way to know for sure is to write or email the ATF weapons technology branch and get a written response. Sometimes though, its be carefull what you ask if you dont like the answer. The easiest answer for licensed smiths to do this is to become a type 7 and not worry about it. It is really no big deal. I can tell you one thing though, one of my very good customers in the past was doing exactly this going through a few smiths. He got in serious trouble and now cannot get a license.
 
the way it was explained to me is it's all about ownership. For instance you can send a rifle to a FFL1 gunsmith for a re-barrel as long as he receives it with the old barrel attached; the gunsmith can supply the new barrel. This is the way it's always been done with no consequence. The manufacturing business comes into play when a gunsmith builds a rifle using his own parts and then in turn sells the finished product to his customer. To take it a step further, a person can build 49 rifles per yr for his own use, no consequence. The gunsmith must keep and use them for a period of one year before he can sell with no consequence. Another sceniaro, take an AR15 as an example, you can use the same lower (the gun) with say 3 different uppers of different caliber, it's really only one gun but not it's three.

Mfg'r "A" knew that DBJ was going to have FFL1 "B" assemble the rifle, therefore a straw purchase. We're not talking about someone using a .22 benchrest rifle in an armed robbery but it's still a gun. When "B" takes possession of a receiver he becomes the owner, logs it into his bound book, it's his gun. If he builds a rifle out of it he becomes a mfg'r. Let's not make more out of this than it is, this is not something new. If we take the alarmist's view, there would not be any gunsmiths left in the USA.

Thanks, douglas
 
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