07 FFL questions

Status
Not open for further replies.

mlaustin

Member
Joined
Aug 25, 2009
Messages
111
Location
Davis, CA
I can't seem to find much detail from ATF regarding whether or not they treat different classes of FFL's differently in terms of what they're looking for. It's a few years off yet until I'll have the means, but I'd love to get my 07 FFL (manufacturer) in a few years. I have a few years of experience with machine work and although I know I wouldn't make much doing it (nor hope for more than breaking even), I'd love to run a little side business building guns and doing transfers for local folks buying guns interstate. And before someone points out the "make a profit" bit of ATF's criteria, you don't need to be buying yachts with your gun money to be a turning a profit - hell, most gun shops LOSE money their first few years. To my understanding, you just need to be business minded with your eye towards making money, and building guns to sell with a manufacturer license seems to fit that quite well, even if you also take advantage of easy transfers for yourself and only work on a small scale.

My questions, which I cannot find answers to either from ATF or google, are:

1) Is it considered bad if an 07 FFL holder does more transfer business than manufacturing business? If I wind up having a tough year at work, limited time to spend on my side business, and wind up doing a lot more internet transfers for local folks than actually building and selling guns in a given year, is ATF going to want a word about why I have an 07 instead of an 01, or is this considered acceptable behavior?

2) Licensing and zoning issues aside, does anyone know if ATF shows more leniency about facilities for 07's than 01's? I can understand why they would want an 01 to have an actual store and take a harder look at and be less likely to approve "kitchen table" 01's, but is there precedent for them being fine with "garage machine shop" 07's, assuming all permit/zoning/licensing bits are on the level?

And I know I could call ATF and get definite answers. I'm just getting a feel for the environment at this point and don't need to waste time on the phone or wait for letters from them to get legally binding answers for this, I'm just trying to build my understanding so I know where to inquire in a year or two when I have the means.
 
For question 2, I would assume that if your zoning and licensing issues are good to go, the ATF isn't going to care how large your manufacurting facilities are. I had a friend who ran a manufacturers FFL out of small, family owned, machine shop. The only concern was zoning and once he showed that location was grandfathered in, he was good.

Oh, and for question 1, he wound up never going into production with the custom rifle he designed. Everything in his bound book wound up being transfers, except for a prototype or two he built and logged in.
 
I know for a fact that the BATFE has no problem with the idea of a garage shop being an 07FFL. Hell, the one I know has his SOT paid, too! The main thing they want is: alarm system, a safe, and locked doors. :)
 
Trebor - thanks, just what I needed to know! Out of question, was this pre- or post-Clinton, since I know the ATF really turned up the heat on FFL's across the board as far as meeting requirements during that era.
 
First, visit the FFL Forum at AR15.com http://www.ar15.com/forums/forum.html?b=6&f=44 Quite a few knowledgeable 07's there.

mlaustin: ...the "make a profit" bit of ATF's criteria...
ATF has no way of knowing how much profit a licensee earns each year. They don't inspect your Quickbooks or accounts ledger, they will inspect your bound book/4473's/inventory. ATF requires an FFL to be "engaged in the business", meaning you are doing this with profit in mind, not mainly as a hobby or for enhancing your collection.


mlaustin: Is it considered bad if an 07 FFL holder does more transfer business than manufacturing business?
No.

mlaustin:...I can understand why they would want an 01 to have an actual store and take a harder look at and be less likely to approve "kitchen table" 01's...
ATF is not "less likely to approve "kitchen table" 01's..." than anyone else. If you meet the requirements, you get the license. Kitchen table, garage, 10x10 storage shed in your back yard- all will be approved as long as you meet all city/county/HOA/state regulations. There are several home 07's in the Dallas area.

Be aware that in addition to your ATF license fees, 07FFLs are also required to pay the ITAR fee (currently $2250 per YEAR), whether you manufacture one or a thousand.

PTK: The main thing they want is: alarm system, a safe, and locked doors.
Not required by any ATF regulation.









.
 
dogtown tom said:
PTK: The main thing they want is: alarm system, a safe, and locked doors.
Not required by any ATF regulation.

From my understanding, it's up to the local BATFE office what "securely stored" means. Mind, if anyone can access them without the license holder or the employees of said license holder, that's an unlawful transfer of an NFA item.
 
PTK Quote:
From my understanding, it's up to the local BATFE office what "securely stored" means. Mind, if anyone can access them without the license holder or the employees of said license holder, that's an unlawful transfer of an NFA item.

OP isn't asking about NFA items.
 
Thanks all. The ITAR fee makes getting an 07 a LOT less attractive, since my hope was to run a small business, and paying $2k a year would require me to have a lot larger business, since I would need my firearms business to be somewhat self sufficient or at least not represent a HUGE loss at this point. If I can't use it as an outlet to build guns, I honestly don't think it's worth the trouble to get an 01, since once you add the costs of the FFL, an alarm system, and a nice safe together, it adds up to a whole lot of FFL transfers.

Guess I'll have to wait a few more years for this dream of the 07. I'm still in disbelief that even if you never plan to do business more than 10 miles away from your house, you get dinged to the cost of a nice used car for some "international" arms trade agreement.
 
Duh, sorry about the mix-up. I'm so used to any 07 also holding an 02 and SOT that I grouped them together in my mind.
 
Status
Not open for further replies.
Back
Top