Sam, here's what I went through. The FFL application CLEARLY says - are you in business to make money? If no, stop application. Are you becoming a licensee to improve a private collection? If yes, stop application.
The FFL is not a hobbyist license. It is a license for a business. As others have said you can have a small business with selective customers but it has to be a business.
Zoning is dependent on locality. I know 07 gunsmith's zoned in their house. They got a variance from the zoning board or they are zoned agricultural or other category that lets them conduct business. My zoning is commercial, but that's not a requirement.
You need a business license. In FL, if you sell used merchandise you are required to register as a secondhand dealer. Also, the city fire department will make sure you have the appropriate fire prevention equipment.
Insurance is optional. Good idea, but not required to be an FFL.
ITAR goes to the state department for firearm manufacturers. It's around $2250 if I recall.
Insurance is difficult. I called 20 insurance brokers. One called me back and gave me coverage with the stipulation that 15% MAX of my sales are firearm related. I did not clal him back.
Tax records? ATF looks at your business and only ATF. The investigators that visited me are more accountant and compliance oriented rather than heavy handed jack booted thugs the internet loves to preach about. I have nothing bad to say about ATF, all my interactions have been friendly, professional and pretty clear cut.
To clear up a few things that I've learned since becoming an FFL.
Myth #1 - ATF requires you to have an alarm.
False. ATF is looking at zoning and compliance with local laws.
Myth #2 - ATF requires you to have a safe
See above
Myth #3 - ATF requires you to have bars on your doors.
See above.
Myth #4 - ATF can come to your house and kick the door down with a no knock warrant anytime they want whenever they damn well please and you waive your right to privacy by becoming an FFL.
Some FFL's are licensed in their house. I know of one gunsmith who when getting his annual inspection had the inspector say "Where is this integrally suppressed 22?" He said: Give me a minute to get it, it's in my sons room.
My business is zoned commercial. I may store firearms anywhere I please so long as my records are reflective of where they are kept. For instance, if I have a storage unit at Joes Mini Storage - I note that AR15 serial # ABC1 is located at Joes Mini Storage. If I need to take something to the range for testing, I note that. If I say, stored in my home garage hanging upside down covered in cosmoline and ATF wants to come by and look at it, I am required to comply with their request and bring them to my house and show them that firearm. Noncompliance from what I understand is automatic license revocation.
Hope this info helped.
In what ways is it the same, and how is it different? I'd very much like to see the costs broken out like I mentioned before.
Do you need a legal (properly zoned, adequate parking, etc.) place of business? Do you need a business license? Do you need insurance? Do you need to pay ITAR as well as the other yearly taxes? How much do these things cost?
What kind of "huge issue" is liability insurance?
Who will be checking your tax records to prove that you're "in the business of?" And what satisfies them that you are?
Again, "if you've got $10,000 or so to spend on the business stuff (not on guns & ammo) is this workable?"
How do the penalties stack up for minor mistakes with records keeping & such compared to the level of commitment most of us gun-hobbyists dedicate to such things?
And how is this different for an SOT03?
None of this is to be argumentative. I'm very curious. However, I've read a LOT of descriptions of how things are not (or are no longer) favorable for the hobbyist and very few that claim that the "fun" is worth the work -- absent a desire to make a career out of it.
) On the other hand, only a very small percentage of folks who are Title II weapons enthusiasts (to whatever degree) are willing to make the commitments to be one.
