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manufacturers license to build ar-15s?

Discussion in 'Legal' started by classiccola999, Dec 3, 2012.

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  1. classiccola999

    classiccola999 Member

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    if you are a ffl dealer do you need a manufacturers license to piece together ar-15s and then sell them as whole rifles?
     
  2. Twmaster

    Twmaster Member

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  3. NavyLCDR

    NavyLCDR member

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    What he said...
     
  4. M-Cameron

    M-Cameron member

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    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?
     
  5. classiccola999

    classiccola999 Member

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    even if you just buy already registered lowers and just put parts on them? and why?
     
  6. dogtown tom

    dogtown tom Member

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    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".

    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
     
  7. Twmaster

    Twmaster Member

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    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)
     
  8. Sam1911

    Sam1911 Moderator

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    Here is a copy of the (or one of the?) letters the ATF has written on the subject:

     
  9. Bubba613

    Bubba613 member

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    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.
     
  10. Twmaster

    Twmaster Member

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    One of the key 'take away' terms would be "for resale".
     
  11. Bubba613

    Bubba613 member

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    There's an exemption for small manufacturers up to iirc 50 guns a year.
     
  12. classiccola999

    classiccola999 Member

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    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.
     
  13. Sam1911

    Sam1911 Moderator

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    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.)
     
  14. Bubbles

    Bubbles Member

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    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.
     
    Last edited: Dec 5, 2012
  15. Bubba613

    Bubba613 member

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    ONly if that is central to your business, which may or may not be the case here.
     
  16. Frank Ettin

    Frank Ettin Moderator

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    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.
     
  17. Bubba613

    Bubba613 member

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    It's in the ATF's newsletter.
     
  18. Frank Ettin

    Frank Ettin Moderator

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    Not good enough. Exactly which newsletter, published when and available where?
     
  19. classiccola999

    classiccola999 Member

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    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?
     
  20. Frank Ettin

    Frank Ettin Moderator

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    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).
     
  21. Bubba613

    Bubba613 member

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    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.
     
  22. Frank Ettin

    Frank Ettin Moderator

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    Of course if an 07 FFL is legally required for your business plan, you'd need to do it anyway.
     
  23. Bubbles

    Bubbles Member

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    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.
     
  24. NavyLCDR

    NavyLCDR member

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    Nevermind. Still researching.
     
    Last edited: Dec 5, 2012
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