Question about a FFL

rebarreling, restocking is gunsmithing--if the FFL holder purchases the action and then installs barrel and or stock --it is manufacturing.

when a private citizen starts installing stocks and barrels and taking money for it--it falls into a different category--it is no longer treated as a casual sale.

Just trying to share some learning that I have had here to maybe save someone some grief--as always, you can take it or leave it.

Jim
 
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thanks Jim

people may be questioning this out of frustration (I am giving them the benefit of the doubt)

they can ask for a written answer from the proper authorities if they wish.

a number of now manufacturers have been contacted and requested to pay the tax. on the canadian website we use we get individuals dismissing or doubting this all the time with no backup information, some gunsmiths have confirmed this citing dealers or new manufacturers but the naysayers continue to rant on no way.

I thank you for your concern and wishing to provide some good information.

You and Joan are sure nice to have met and done business with, you continue to amaze me as has others who try to assist with dispassionate facts rather than just wishful thinking.
thanks again you have helped some of us speed up our decisions to buy while we still can at a reasonable cost.

(internal question to ponder---what is the new cost for bullets if the manufacturer only does 40K a year---answer they go up by $40 per 1000 or he goes to court for a fine in addition to the new tax WHEN caught)

Jefferson
 
Jim, If the gunsmith purchases the action then transfers it to the customer and in turn the customer asked the g/s to do xyz. Is it gunsmithing or mfg. ??? Thats my question from the BAFTE. Still NO answer from them.
 
This needs help from the NRA I suppose

Lew said:
Jim, If the gunsmith purchases the action then transfers it to the customer and in turn the customer asked the g/s to do xyz. Is it gunsmithing or mfg. ??? Thats my question from the BAFTE. Still NO answer from them.
Click to expand...

Shouldn't the excise tax have been paid when the action was made and sold?
And if you added value you would pay only for the added value to the finished firearm? And stocks or barrels alone aren't taxed are they?

The interpretations I read here seem wrong. Not wrong from the poster's part but maybe wrong from the government employee who supplied the information.

I think they are over reaching.
 
The excise tax is to paid on a complete rifle (action/stock/barrel) provided by the purchaser of those parts.

the definition of manufacturer by the atf for 07 classification, as I am told by them, has nothing to do with the tax or making a complete rifle. manufacture by them is if the ffl holder manufactures and action or purchases the action and then installs barrel or stock. That does not mean tax is due--but manufacturing has taken place and an 07 license is required if the ffl holder provided the action and did the other work.

have been told that selling an action to a customer and transferring it to that customer who then sends it back to have rifle built with parts provided by me--that unit counts as a manufactured rifle since I provide the key parts (action/stock/barrel)

This is the way I understand it and the way I have been advised.

Not sure why anyone would want to take the risk of working around the basic guidelines.
 
I have looked into the ITAR regulations and their is no requirement to get a license unless you are going to export defense articles . It specifically states that if a manufacture is making items that are used and designed mainly for non military use they are not required to be licensed.
I think people are confused by the following statement from the Department of States web site.
http://pmddtc.state.gov/docs/ITAR/2007/official_itar/ITAR_Part_122.pdf § 122.1 Registration requirements.
(a) Any person who engages in the
United States in the business of either
manufacturing or exporting defense articles
or furnishing defense services is
required to register with the Directorate
of Defense Trade Controls. For
the purpose of this subchapter, engaging
in the business of manufacturing or
exporting defense articles or furnishing
defense services requires only one occasion
of manufacturing or exporting a
defense article or furnishing a defense
service. Manufacturers who do not engage
in exporting must nevertheless
register. This last part is still referring to Any person who engages in the
United States in the business of either
manufacturing or exporting defense articles
or furnishing defense services.
Holders of type 7 ffl are not required to register unless they are importing or exporting military use items.
 
not saying you're wrong

Jim Borden said:
snipped.....

This is the way I understand it and the way I have been advised.

Not sure why anyone would want to take the risk of working around the basic guidelines.
Click to expand...

I'm not arguing with you. I'm stating that this thread is confusing with the different matters of tax and then manufacturing vs. gunsmithing.
 
koginam
quote "For the purpose of this subchapter, engaging in the business of manufacturing or exporting defense articles or furnishing defense services requires only one occasion of manufacturing or exporting a defense article or furnishing a defense service. Manufacturers who do not engage in exporting must nevertheless register. "

key word is defense articles--they do not have to be supplied to the military or exported. Barrels, stocks and receivers (actions) are all classed as defense articles. Otherwise the state department would not be calling unregistered 07 licensees and telling them they must pay the fee and register.

Like I said just trying to give a "heads up" based on FACTS that I have experienced or what has been shared with me by other 07's or what has been a result of inspection. I am not guessing, interpreting or otherwise conjecturing on this topic.

Jim
 
ATF/07 license

Jim is correct.

I asked for an explaination on this matter at the ATF forum meeting in Orlando 2007 during the Shot Show. Like it or not, it's exactly as Jim describes.
The American Pistolsmith Guild had lobbied for a number of years to get the 50 units a year exemption. The average small custom craftsman cannot do 50 units a year. (pistols)I have worked for over twenty years on an 01 license, but I am renewing with an 07. Even though my work is accurizing, modifications, and barrel changes,. etc., such still fars under the manufacturing blanket, as it was explained at the gunsmiths/dealer/ATF forum. I attended with the specific purpose of making this inquiry..

Jerry
 
This has been a very interesting thread.

I Can see just paying the extra few dollers for the 07 class liscense, however the manditory ITAR requirement seems way unfair, and a crock. Just another way for the make more money and squash out the little guys. $1750 is a big fee if your not going to take advantage of it's purpose (exporting).

Also when you say register with ITAR with the state dept....are all state's $1750?
 
Jim Borden is right

Do the research. Do I think it's right? By no means. The area of gun smithing (01) and manufacturing (07) has been a grey area of dispute for as long as I care to remember and it seems to be getting worse. Do you really think it's going to get any better? I am of the belief that all (01)'s will eventually be herded into 07 (manufacturing) along with being registered with the State Department at the tune of $1750.00/ year. I also know of 07's being contacted and ordered to register with the State Department. Since when was the government not concerned with collecting your money?

You can stand around and B**** about it or at least attempt to do something.

An earlier version of this: http://www.nraila.org/Issues/FactSheets/Read.aspx?id=224&issue=018
came close to passing in 06. Remember, politicians understand numbers
 
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Jim

My Brothers and I have been thinking of getting a FFL for our Business. My oldest Brother is into pistols and "AR's", and I do an occasional barrel for close friends. The main thing we want is convienience for ourselves, such as when I purchace a new action or any other item that must be handled in that fashion.
Since R.C. Schmidt & Sons Inc. (the official corporation name), has nothing to do with Firearms, what could be the drawbacks of aquiring a FFL. I am aware of the old "it gives them the right to get into your business", but could they be any worse than other agencies we already have to deal with, ie, IRS, OSHA, EPA, etc......jackie
 
Jackie

You kind of loose your individual gun rights--not exactly--but almost. You will have to log all of your rifles/shotguns and handguns in and then sign them out to personal inventory--then basically better not sell anything from personal inventory--sign back in and use the ffl to sell any that you want to sell.

Book work is key thing and then keeping up with all of the changes. It would also pretty much limit you from buying actions for your self to assemble your own rifles--kind of a catch 22 situation. So that would point toward an 07 license--then there is the State Department registration.

Of course-if you have the corporation get teh ffl--then individual sign out of actions to yourself for manufacturing a gun for yourself would be outside the umbrella.


Jim
 
The registration requirements for the $1750/year are written in such a gray manner they can be pushed about anywhere. There are very few exemptions. Sporting shotguns are one of the very clear exemptions. Manufacturing for scientific research is exempted as well. If you research the reasons that the NRA was founded, one of them was for the scientific study of guns and shooting. Manufacturing ammo also requires registration. Anybody loaded any ammo lately? I'm not sure how the registration (tax) or fee as the ST Dept calls it gets forced on voters when I don't think the huge dollar figure is at all regulated by those that can be voted in or out of office. What ever happened to "No taxation without representation". The only way this and the Type07ffl vs. type01 will get fixed is with millions of gun owners getting politicians elected that will push bills through that change this.

I wanted to manufacture custom rifle actions, and after my atf guy called me and thought I might have to register for $1750 a year, I had a change of heart. As for now working on high grade double shotguns looks better and better.
 
Why not do the sold to, bill to, ship to thing? Sold to customer John Doe, bill to gunsmith, ship to gunsmith. Wouldn't that equate to a gunsmith and not a manufacturer?
 
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