Wanting to sell bulk ammo in Texas, do I need an ffl?

[GuyinTexas]

Hey all, I've been a lurker for years but finally joined because i need help with an issue.

A friend of mine was a collector and is now liquidating all of his ammunition. I'm helping him sell very large amounts of pretty pricey ammunition. My problem is, I don't know the legality of it, so I have been trying to contact ffl holders to sell to. I'm trying to sell this stuff at half off, but I don't even know where to begin.

Am I doing right by trying to find a dealer or an ffl? Should I be strictly trying to sell to people in Texas only? Am I allowed to ship ammo to an ffl?

I see conflicting information all of different forums Any information would be greatly appreciated.

 

[Telekinesis]

No, you don't need a FFL to sell ammo. I also don't believe any FFL would buy ammo from you for resale because of liability.

The good news is that you can sell it however you like to whomever you choose without any licensing or record keeping requirements. you can ship ammo, though you will want to check the carrier's policies regarding ammunition. I believe some (if not all) require you to notify them that it is ammo for safety reasons. Shipping will be relatively expensive because of weight.

To sell it, I would recommend trying to post flyers at local ranges or posting WTS ads in the FS sections of gun boards. You may also want to mention it to some of your shooting friends as well. You never know who's looking for a new gun or some more ammo.

 

[dogtown tom]

GuyinTexas Hey all, I've been a lurker for years but finally joined because i need help with an issue.

A friend of mine was a collector and is now liquidating all of his ammunition. I'm helping him sell very large amounts of pretty pricey ammunition. My problem is, I don't know the legality of it, so I have been trying to contact ffl holders to sell to. I'm trying to sell this stuff at half off, but I don't even know where to begin.

Am I doing right by trying to find a dealer or an ffl? Should I be strictly trying to sell to people in Texas only? Am I allowed to ship ammo to an ffl?

I see conflicting information all of different forums Any information would be greatly appreciated.

No FFL is needed to sell commercially manufactured ammunition.

If you sell ammunition you have loaded/reloaded/manufactured you need to get aan 06FFL.

 

[bushmaster1313]

The BATFE Website:

http://www.atf.gov/firearms/faq/licensees-conduct-of-business.html#small-arms-ammo-licensing

Q: Is a license required to engage in the business of selling small arms ammunition?
No. A license is not required for a dealer in ammunition only, but a manufacturer or an importer of ammunition must be licensed.

[18 U.S.C. 922 (a)(1)(B)]

YMMV

 

[hogshead]

Post it on here!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[Trent]

If the ammunition has been reloaded / made from components / re-manufactured, you cannot resell it (legally).

If it's commercial boxed ammo, fair game.

Be aware:

You cannot sell handgun ammunition to someone under 21!

You cannot sell certain ammunition to certain jurisdictions directly. (There are a LOT of state and local laws on this, it's annoying).

Certain states REQUIRE certain things - such as in Illinois, you must be an FOID card holder and provide proof of such prior to obtaining ammunition from any source.

You need to obtain a drivers license image and/or a signed affadavit specifying that the purchaser is of legal age, doesn't have any felony convictions, etc, etc (basically the same stuff that's on a 4473), to completely CYA.

And, POST THE AMMO ON HERE. You will get buyers if it's half off.

Since I helped you maybe give me first crack over a PM. ;-) (just kidding...)

 

[Trent]

also - if you SHIP ammo, it must go GROUND, and must be labeled "ORM-D." Ask the person at the UPS counter for stickers. Note, UPS stores (as in the little shipping kiosk stores popping up in shopping strips) probably will reject it, you may have to take it to an actual UPS depot.

 

[bushmaster1313]

No shipping ammo U.S. Postal Service

 

[GuyinTexas]

Wow thanks guys. What a great forum here. I've never gotten that many responses to a question on a forum that were all polite and full of value information. I should have joined THR years ago. I'm going to become a regular here.

Maybe I'll go post what's being sold in the trading section here. The only problem is how much of it there is. 400 Boxes(20 rounds per box) of Corbon .458 Socom 300 and 405 grain is just one of the many things I need to help him sell I want to do this in large orders. I'm gunna go hit the trading section!

Thanks again fellas.

 

[Telekinesis]

You cannot sell handgun ammunition to someone under 21!

There is no requirement to do this unless you are a FFL. Unlicensed individuals are not bound by this law.

You need to obtain a drivers license image and/or a signed affadavit specifying that the purchaser is of legal age, doesn't have any felony convictions, etc, etc (basically the same stuff that's on a 4473), to completely CYA.

There's no requirement to do this either. The reason online stores do is because most are FFLs and have to abide by the age restrictions. Not saying that it isn't a good idea, but there's no requirement to do so. I personally wouldn't want to give someone access to all the information on my drivers license when I only know them by a web forum alias.

 

[NavyLCDR]

If the ammunition has been reloaded / made from components / re-manufactured, you cannot resell it (legally).

Wrong. I person cannot sell ammunition that I have not reloaded myself for the purpose of making a profit, as that is manufacturing ammo. However, if I come across ammunition that has been commercially reloaded, or let's say my dad dies and leaves me a few thousand rounds of ammunition that he has reloaded, there is no law that prevents me from selling that ammo without a license.[/Quote]

Be aware:

You cannot sell handgun ammunition to someone under 21!

Wrong again. Only FFLs are prohibited from selling ammunition intended to be used in a handgun by the purchaser to persons under 21 years of age. The age limit is 18 for persons selling ammunition as a private party without an FFL (18 USC 922(x)).

You need to obtain a drivers license image and/or a signed affadavit specifying that the purchaser is of legal age, doesn't have any felony convictions, etc, etc (basically the same stuff that's on a 4473), to completely CYA.

Wrong again. The requirement is to not have reasonable belief or actual knowledge the person is not prohibited.

Since I helped you maybe give me first crack over a PM. ;-) (just kidding...)

I would not consider posting a lot of false information to be of much help. Ooops...I did notice you were just kidding now...

 

[bushmaster1313]

I have thought it would be a nice service to buy ammo from different manufacturers and sell it as a variety pack so shooters could determine which ammo shot best in their rifle.

As a shooter, I would pay $40 a box for $20 a box ammo if I could get four rounds from 5 different manufacturers in one box of 20 instead of paying $100 to buy 5 $20 boxes.

 

[Trent]

Navy;

I was trying to give generic advice if he's selling online (e.g. anywhere in the US).

Selling someone else's reloads (who is unlicensed) if you are unlicensed doesn't negate the requirement to have an FFL. At that point the manufacturing of ammunition has simply been "outsourced" - YOU, as the original seller (for profit) of ammunition, are acting as the manufacturer. Unless there has been a clarification from the BATF in recent years, which I'm not aware of, selling newly manufacturered (reloaded or otherwise) ammunition without an FFL - FOR PROFIT (key words) - or distributing such ammunition, would violate 923(a), 27 CFR 478.41.

Some states have laws which restrict the sale of handgun ammo to anyone under 21. E.g. if he sold pistol ammo to someone under 21 in those states, he'd be guilty of a felony. They WILL extradite you over a felony. I.e. he could get shipped from Texas to Iowa, to stand trial.

The documentation of license (or state ID) is for PROOF of age if selling to a state with age requirements. A signed affidavit is also good enough (if you don't want to ask people for their ID's).

Personally, I've sold a LOT of ammo on Gun Broker, WAS a licensed ammunition manufacturer, AND an FFL. Never had anyone throw me flack over a drivers license. (Yes, the license # and address were blacked out on a couple, but as long as I could see name, birthdate, and state, I didn't care).

 

[GuyinTexas]

Is there a forum here in which I might find an ffl to handle these transactions for me for a fee? Since I'm not a lawyer, or a dealer, I think I might just want to get an ffl in Texas to do these transactions just in case. The laws are so different state to state, I don't want to unknowingly break any rules.

 

[rajb123]

Beware, Mass has a requirement that buyers have a special Mass license in order to buy ammo.

..don't even think of shipping ammo to this location.

This is the only state that has this restriction, I believe.

 

[beatledog7]

...let's say my dad dies and leaves me a few thousand rounds of ammunition that he has reloaded, there is no law that prevents me from selling that ammo without a license.

First, I hope your dad doesn't die, but if he does and leaves you this ammo, don't be surprised if you have a hard time selling it. Most people would not buy ammo loaded/reloaded by an unlicensed loader/reloader who is unknown to them unless all they were going to do is take it apart and reuse the components.

Legal to sell or not, I wouldn't shoot it.

 

[fatcat4620]

What does he have? I am sure we could take it off his hands (for a nominal fee of course)

 

[medalguy]

I don't know where you are located in Texas, but you might want to consider getting a table at a gun show. I recently helped the widow of a friend dispose of quite a large amount of ammunition, powder and primers by offering it at a gun show for 75% of the local retail store's prices. I was inundated by buyers all weekend and sold every single round I brought, and I brought a lot. I sold all the powder and primers on Friday as I was setting up my table and had none to offer the public on Saturday or Sunday. Too bad.

 

[GuyinTexas]

Thank you for the responses guys. My buddy has decided to try to sell it all back to the store he bought it from. It was too daunting a task to try to sell it piecemeal.

 

[NavyLCDR]

Navy;

I was trying to give generic advice if he's selling online (e.g. anywhere in the US).

Selling someone else's reloads (who is unlicensed) if you are unlicensed doesn't negate the requirement to have an FFL. At that point the manufacturing of ammunition has simply been "outsourced" - YOU, as the original seller (for profit) of ammunition, are acting as the manufacturer. Unless there has been a clarification from the BATF in recent years, which I'm not aware of, selling newly manufacturered (reloaded or otherwise) ammunition without an FFL - FOR PROFIT (key words) - or distributing such ammunition, would violate 923(a), 27 CFR 478.41.

So, let me ask this. My father dies and leaves me 10 guns with 1,000 rounds of his reloads for each gun. My father never held an FFL. I sell each gun for $1,000 and sell the 1,000 rounds of his reloads for $150 for each batch to a resident of my state who is not prohibited from possessing firearms or ammunition. I do not have an FFL. I make a total of $10,000 on the guns and $1,500 on the reloaded ammunition. Exactly what law have I broken?

I have in no way, by any stretch of even a lawyer's imagination, engaged in or intended to engage in the business of manufacturing ammunition.

If I buy ammunition from a distributor made by Winchester at wholesale prices, and sell it at the local gun show for a profit, I have in no way engaged in the business of manufacturing ammunition.

If I buy ammunition from Johnny Smith reloader down the street and sell it at a local gun show for a profit, I have in no way engaged in the business of manufacturing ammunition. In order to convict me for engaging in the business of manufacturing ammunition without a license, the prosecutor would have to prove that I conspired with Johnny Smith to illegally engage in the business....that I was his business partner. That is a far cry from simply buying ammo at a good price and not asking the source of the ammo about a manufacturer's license.

 

[Trent]

NavyLCDR;

Aside from the liability concerns (you ever price insurance on ammunition manufacturing? It's not pretty), there's also environmental forms you MUST fill out if you apply for an ammunition manufacturing license, basically stating what amounts of hazardous "stuff" your process would put in the environment. The law specifically states that reloading for YOURSELF is not regulated, but to SELL or DISTRIBUTE (note the "OR", it's intentional), you MUST have an ammunition manufacturing FFL.

Selling someone else's commercial ammunition is fine, as THEY have an ammunition manufacturing FFL, have done the environmental paperwork, and paid the license fee(s).

Selling someone else's handloaded/reloaded ammunition is not fine - you can't even GIVE handloaded ammunition away legally!

Technically, for the original Johnny Smith to GIVE you his reloads for NO COST violates the law (he "distributed" the ammunition).

Sorry, that's the way it is spelled out in the law. Has anyone ever been tried and convicted? Doubtful. But it's a statutory violation to do it, clear as day...

 

[RhinoDefense]

Liability insurance on ammunition manufacturing? Pretty cheap at $2,100 per year.

Environmental forms? All fields not applicable for those manufactures that essentially assemble components, like most small reloaders and manufacturers.

The law is posted in #4. No where does it state distribution of ammunition. It only states ammunition manufactured or imported by you. Ammunition distributors are not required to have an FFL if they are not manufacturing or importing. Read the ATF FAQ. If you deal, ie sell or resell, ammunition, no license is required.

Giving away ammunition you manufactured is legal. You are not doing it for livelihood and you've received no consideration (legal term for payment, barter, trade, or future compensation).

 

[MtnCreek]

Yes, s FFL with a manufacturing license is required to submit two environmental forms with the ffl application. Info on waste materials, emissions, etc. are submitted, but I don’t know how that information is used when processing the application. Yes, a person / entity in the business of manufacturing ammunition must be licensed to do so.

There is no license required to sell ammunition. If I want to make a business of selling ammunition, there are local/state considerations, but no federal law prohibits it. It would be good business to obtain copies of licenses and insurance certificates form my supplies if they were small companies, but this is not a requirement of federal law.

If an unlicensed person decided they wanted to sell all their guns and ammo, including a large stockpile of handloads, there is no federal law that prohibits it. If this same person then had the idea they could make additional money by producing more handloads for the purpose of re-sale, a license would then be required.

 

[Bubbles]

Thank you for the responses guys. My buddy has decided to try to sell it all back to the store he bought it from. It was too daunting a task to try to sell it piecemeal.

Don't be surprised if the store refuses to take it back. Most store policies are that sales of ammo are final due to liability issues.

 

[Trent]

Rhino; Aside from the obvious liability concerns (and my ammunition manufacturing quote for insurance was MUCH higher than yours - and required submitting for approval my box designs with disclaimers, quality control procedures, and so on)...

What about tax evasion?

Ammunition manufacturers are required to pay excise tax.

Making ammunition, giving it away to someone else, who then resells it for profit (zero cost, plus income), would sidestep this, and land you in the realm of tax evasion.

http://www.ttb.gov/forms/f530026.pdf

Also, if they ever found out that ANY money changed hands for components to keep the "supply" going, then you've effectively subcontracted the work. GIVING the components to someone else to reload, THEN selling the produced ammunition.. same deal. You've merely outsourced the work; compensated for time, or not, is irrelevant.

Giving away ammunition YOU manufactured is one thing. SELLING ammunition that someone ELSE made (who wasn't licensed, didn't pay excise fees, etc)... that's crossing the line, IMO.

As I said above, I doubt anyone has ever been charged with it, and if you're selling 10K rounds once-off that you inherited or were gifted, I doubt it would raise any flags whatsoever. As to the liability concerns of selling someone else's handloads ... I wouldn't think the risk was worth it. One KABOOM (whether the fault of the ammo, or not; could be a squib followed by a tap-rack-bang), and you're pretty much throwing your entire estate in to the wind.