Gunsmith License Costs / Issues?

[Colonel]

Kicking around the idea of cutting chambers, threading barrels, barreling actions, attaching triggers, fitting and bedding stocks, etc., for long-range bolt rifles for fun and profit.

What would the legal (specifically federal/state licensing) ramifications of such an enterprise be?
Costs?
Record-keeping?
Inspections?
Liability?

Manufacture would most likely be in Virginia, sale in interstate commerce.

TIA for any advice.

 

[dogtown tom]

Colonel Kicking around the idea of cutting chambers, threading barrels, barreling actions, attaching triggers, fitting and bedding stocks, etc., for long-range bolt rifles for fun and profit.

What would the legal (specifically federal/state licensing) ramifications of such an enterprise be?
Costs?
Record-keeping?
Inspections?
Liability?

Manufacture would most likely be in Virginia, sale in interstate commerce.

TIA for any advice.

To do what you describe would require an 07FFL Manufacturer of Firearms license $150 for the first three years plus ITAR fee of $2250 per year.

Same recordkeeping, etc as any other FFL.

 

[Colonel]

Thanks for the reply Dogtown Tom.

ITAR fee of $2250 per year.

This is absurd.

Is this for strictly domestic (by this, I mean exclusively inside the U.S.) sales as well?

FWIW, I would be a producer or wholesaler, rather than a retailer.

Question #2: I can do this for myself (to practice) in my home state before I try to sell, without a license of any kind? Right?

 

[Jim K]

I totally fail to see what international traffic in arms Colonel is proposing. He is not proposing buying or selling anything outside the country.

But I will add my usual note about not forgetting other federal laws as well as state/local laws and regulations, such as a business license, sales tax collection license, zoning law compliance, pollution laws (dumping the bluing tank into the creek is a no-no today), OSHA laws if you have employees, business tax filing, and on and on. Not to mention insurance, personal and shop to protect against both against loss of a valuable item while in your possession but also against goofing up and damaging a gun or making one unsafe.

I personally wouldn't try doing what Colonel proposes without incorporating a business for self-protection. A sole proprietorship leaves you too wide open on liability for my liking.

Now on the FFL. If you were to work retail, and simply modify customer's guns, you are probably not going to need a manufacturer's license. But if you buy guns, modify them and sell them, then BATFE says you are manufacturing and will need a manufactrer's license, not just an 01 dealer's license. If you work strictly for FFL holders, and do only limited modification, you MIGHT be able to work under your customer's FFL, but that is a gray area that needs to be discussed with BATFE.

Jim

 

[dogtown tom]

Colonel

Quote:
ITAR fee of $2250 per year.

This is absurd.

Yep.

Is this for strictly domestic (by this, I mean exclusively inside the U.S.) sales as well?

Every 07FFL must pay ITAR whether they plan to export or not. The only exemptions are for "scientific research" and certain sporting shotguns.

FWIW, I would be a producer or wholesaler, rather than a retailer.

ATF doesn't license producers, wholesalers or retailers.....they license you as either 01 Dealer, 02 Pawnbroker, 07 Manufacturer, etc. If you plan to do any manufacturing activity you would need to get an 07. Be aware that what many consider simple gunsmithing may be classified as manufacturing by ATF.

Question #2: I can do this for myself (to practice) in my home state before I try to sell, without a license of any kind? Right?

ATF regs allow you to manufacture firearms for your own use, as well as doing your own gunsmithing without need for an FFL.

Jim K I totally fail to see what international traffic in arms Colonel is proposing. He is not proposing buying or selling anything outside the country.

Certain gunsmithing activities REQUIRE an 07FFL "Manufacturer of Firearms". It doesn't matter whether you ever intend to export, what matters is whether the firearms you are performing manufacturing operations on are on the State Department list (pretty much everything except sporting shotguns).

For example: You want to buy stripped AR lowers, parts kits, buttstocks, upper assemblies, scopes/optics/etc and assemble them? You need to have an 07FFL........and pay ITAR PLUS Federal Excise Tax.

 

[Colonel]

Thanks again, Dogtown Tom and Jim.

Not to go off-topic, but who's the tax-payrolled rocket surgeon who committed me, as a U.S. citizen, to ITAR while I was sleeping?

I want to give that person a raise (j/k).

 

[Bubbles]

ITAR passed in 1976. Yes as a manufacturer you must register though most have no clue. ATF is starting to ask them about it during compliance inspections, as adherence to all local/state/fed laws is a requirement for keeping the license.

Straight gunsmithing requires a Type 01 (dealer) FFL.

Short answer to the difference between "gunsmithing" and "manufacturing" is if you take in a gun for a customer and make improvements on it, it's gunsmithing. If you buy a gun, it's in your inventory, you improve it, and then you re-sell it, you're manufacturing.

Longer answer courtesty of ATF:
http://www.atf.gov/firearms/faq/manufacturers.html#dealer-gunsmithing