manufacturers license to build ar-15s?


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classiccola999
December 3, 2012, 08:54 PM
if you are a ffl dealer do you need a manufacturers license to piece together ar-15s and then sell them as whole rifles?

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Twmaster
December 3, 2012, 08:59 PM
yes.

NavyLCDR
December 3, 2012, 09:00 PM
What he said...

M-Cameron
December 3, 2012, 09:08 PM
how is that different than selling just a lower and just an upper?


or does the ATF consider it "doing work on a firearm" and therefore is the same as traditional gunsmithing?

classiccola999
December 3, 2012, 09:08 PM
even if you just buy already registered lowers and just put parts on them? and why?

dogtown tom
December 3, 2012, 11:24 PM
classiccola999 if you are a ffl dealer do you need a manufacturers license to piece together ar-15s and then sell them as whole rifles?
Yes, an 07FFL is required.
If a customer brings in a parts kit, upper and lower receivers an 01FFL can assemble them as that is considered "gunsmithing".

classiccola999 even if you just buy already registered lowers and just put parts on them? and why?
Because ATF says so. They consider it a manufacturing activity to buy parts kit, lowers and uppers and build the gun.

Read this:http://www.atf.gov/regulations-rulings/rulings/atf-rulings/atf-ruling-2010-10.htm

Twmaster
December 3, 2012, 11:36 PM
even if you just buy already registered lowers and just put parts on them? and why?

how is that different than selling just a lower and just an upper?

The other aspect is tax. There is an 11% tax imposed on each new assembled firearm sold. Whether it's true or not I've had dealers refuse to sell me an upper and a stripped lower on my same order. The excuse was they've be considered a manufacturer and they'd have to pay the 11% tax (and add that to my bill)

Sam1911
December 3, 2012, 11:39 PM
Here is a copy of the (or one of the?) letters the ATF has written on the subject:

U.S. Department of Justice
Bureau of Alcohol, Tobacco,
Firearms and Explosives
Firearms Technology Branch
August 15, 2008
Martinsburg, West Virginia 25405
www.atf.gov

Manufacturing of Firearms

Below are examples of operations performed on firearms and guidance as to whether or not such operations would be considered manufacturing under the Gun Control Act (GCA). These examples do not address the question of whether the operations are considered manufacturing for purposes of determining excise tax. Any questions concerning the payment of excise tax should be directed to the Alcohol and Tobacco Tax and Trade Bureau, U.S. Department of the Treasury.

Generally, a person should obtain a license as a manufacturer of firearms if the person:

1) is performing operations that create firearms or alter firearms (in the case of alterations, the work is not being performed at the request of customers, rather the person who is altering the firearms is purchasing them making the changes, and then reselling them);
2) is performing the operations as a regular course of business or trade; and
3) is performing the operations for the purpose of sale or distribution of the firearms.

1. A company produces a quantity of firearm frames or receivers for sale to customers who will assemble firearms. The company is engaged in the business of manufacturing firearms and should be licensed as a manufacturer of firearms.

2. A company produces frames or receivers for another company that assembles and sells the firearms. Both companies are engaged in the
business of manufacturing firearms, and each should be licensed as a manufacturer of firearms.

3. A company provides frames to a subcontractor company that performs machining operations on the frames and returns the frames to the original company that assembles and sells the completed firearms. Both companies are engaged in the business of manufacturing firearms and should be licensed as manufacturers of firearms.

4. A company produces barrels for firearms and sells the barrels to another company that assembles and sells complete firearms. Because barrels are not firearms, the company that manufactures the barrels is not a manufacturer of firearms. The company that assembles and sells the firearms should be licensed as a manufacturer of firearms.

5. A company receives firearm frames from individual customers, attaches stocks and barrels, and returns the firearms to the customers for the customers’ personal use. The operations performed on the firearms were not for the purpose of sale or distribution. The company should be licensed as a dealer or gunsmith, not as a manufacturer of firearms.

6. A company acquires one receiver, assembles one firearm, and sells the firearm. The company is not manufacturing firearms as a regular course of trade or business and is not engaged in the business of manufacturing firearms. This company does not need to be licensed as a manufacturer.

7. An individual acquires frames or receivers and assembles firearms for his or her personal use, not for sale or distribution. The individual is
not manufacturing firearms for sale or distribution and is not required to be a licensed manufacturer.

8. A gunsmith regularly buys military-type firearms, Mausers, etc., and sporterizes” them for resale. The gunsmith is in the business of
manufacturing firearms and should be licensed as a manufacturer.

9. A gunsmith buys semiautomatic pistols and modifies the slides to accept a new style of sights. The sights are not usually sold with these
firearms and do not attach to the existing mounting openings. The gunsmith offers these firearms for sale. This would be considered the manufacturing of firearms, and the gunsmith should be licensed as a manufacturer.

10. A gunsmith buys government model pistols and installs “drop-in” precision trigger parts or other “drop-in parts” for the purpose of resale. This would be considered the manufacturing of firearms, as the gunsmith is purchasing the firearms, modifying the firearms, and selling them. The gunsmith should be licensed as a manufacturer.

11. A gunsmith buys surplus military rifles, bends the bolts to accept a scope, and then drills the receivers for a scope base. The gunsmith offers these firearms for sale. This would be considered the manufacturing of firearms, and the gunsmith should be licensed as a manufacturer.

12. A gunsmith buys surplus military rifles or pistols and removes the stocks, adds new stocks or pistol grips, cleans the firearms, then sends the firearms to a separate contractor for bluing. These firearms are then sold to the public. This would be considered manufacturing of firearms, and the gunsmith should be licensed as a manufacturer.

13. A company purchases surplus firearms, cleans the firearms, then offers them for sale to the public. The company does not need to be
licensed as a manufacturer.

14. A company produces firearms or firearm receivers and sends the firearm/receivers out for colorizing (bluing, camouflaging, phosphating, or plating) and/or heat treating. Do the companies performing the colorization and/or heat treating need to be licensed as manufacturers, and are the companies required to place their markings on the firearm? ATF has determined that both colorization and heat treating of firearms are manufacturing processes. The companies performing the processes are required to be licensed as manufacturers. If the companies providing colorization and/or heat treating have not received variances to adopt the original manufacturer’s markings, they would be required to place their own markings on any firearm on which they perform the manufacturing process of colorization and/or heat treating.

Bubba613
December 3, 2012, 11:44 PM
Not necessarily. If that is a major source of business for the licensee then yes. If he is doing it only on an occasional basis incidental to his main work as a dealer then no.

Twmaster
December 3, 2012, 11:45 PM
One of the key 'take away' terms would be "for resale".

Bubba613
December 3, 2012, 11:45 PM
The other aspect is tax. There is an 11% tax imposed on each new assembled firearm sold. Whether it's true or not I've had dealers refuse to sell me an upper and a stripped lower on my same order. The excuse was they've be considered a manufacturer and they'd have to pay the 11% tax (and add that to my bill)
There's an exemption for small manufacturers up to iirc 50 guns a year.

classiccola999
December 4, 2012, 04:04 AM
thanks very much for the help guys. my idea was to do a special service in my shop where i ask the customer what his needs are and then put together a rifle to suit his needs using the ar-15 platform since it can be easily assembled and built to suit a variety of needs and uses from tactical shooting to long range to varmint hunting.

Sam1911
December 4, 2012, 08:06 AM
That certainly makes sense, but will require you to have a manufacturer's license.

If you want to offer suggestions on what a customer should buy, and s/he brings the lower receiver to you (or even buys it at your shop, I suppose) and then you assemble the rifle on their frame, the BATFE would consider that a gunsmithing function so you'd be ok under a Type 1 FFL. (Number 5 in the list of examples.)

Bubbles
December 4, 2012, 09:31 AM
There's an exemption for small manufacturers up to iirc 50 guns a year.
While the exemption exists, you still have to be licensed as a manufacturer to engage in the activity of assembling AR15's from parts for resale. The exemption only states that the FFL does not have to collect and remit the excise tax.

Bubba613
December 4, 2012, 10:30 AM
ONly if that is central to your business, which may or may not be the case here.

Frank Ettin
December 4, 2012, 12:44 PM
Not necessarily. If that is a major source of business for the licensee then yes. If he is doing it only on an occasional basis incidental to his main work as a dealer then no. ONly if that is central to your business, which may or may not be the case here. Since if the OP pays attention to you and you're wrong the OP will get into a lot of trouble, you need to cite applicable legal authority to support your assertions.

Bubba613
December 4, 2012, 02:09 PM
It's in the ATF's newsletter.

Frank Ettin
December 4, 2012, 02:26 PM
It's in the ATF's newsletter. Not good enough. Exactly which newsletter, published when and available where?

classiccola999
December 4, 2012, 03:20 PM
so what you guys are saying is just to be on the safe side i should get a manufacturers license if i plan on doing this. is it any more difficult to obtain than a standard ffl?

Frank Ettin
December 4, 2012, 03:49 PM
...so what you guys are saying is just to be on the safe side i should get a manufacturers license if i plan on doing this...That would be the best idea.

Alternatively, if you really want to try to avoid getting the 07 FFL and making do with a 01, seek the assistance of a qualified lawyer, instead of anonymous denizens in cyberspace. He could evaluate the details of your business plan (and the details could matter). He could even seek a formal, written advisory opinion from ATF (and if done properly you'd be able to rely on that).

Bubba613
December 4, 2012, 03:52 PM
Well, you can. But if you do you will be forced to sign up for ITAR and it's outrageous registration fees, in excess of $2,000/yr.

Frank Ettin
December 4, 2012, 03:57 PM
Well, you can. But if you do you will be forced to sign up for ITAR and it's outrageous registration fees, in excess of $2,000/yr...Of course if an 07 FFL is legally required for your business plan, you'd need to do it anyway.

Bubbles
December 5, 2012, 09:19 AM
so what you guys are saying is just to be on the safe side i should get a manufacturers license if i plan on doing this. is it any more difficult to obtain than a standard ffl?
Not really, the form is the same, just check the box for 07 manufacturer instead of 01 dealer.

The tricky part is your local zoning and any HOA CCR's that control what type(s) of businesses are permitted on your premises.

As was pointed out, ITAR registration is $2,250.00 per year for firearm manufacturers.

NavyLCDR
December 5, 2012, 12:06 PM
Nevermind. Still researching.

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