07 FFL

[tstuart34]

Any 07 FFL holders willing to answer a few questions? I am trying to get my ducks in a row and need to decided 01 and 07. Shoot me a PM if your interested in a Q and A.

[Tim McBride]

I held an 07ffl/02sot for many years, what do you plan to do?

[tstuart34]

Thanks for replying Tim. I guess my biggest question is about ITAR... For sake of conversation stick to ar15s. A gunsmith operating with a 01 can preform work on a customers firearms, He can assemble and refinish the persons AR and so forth. Under a 07 I could assemble parts make a complete rifle refinish complete rifles in inventor and sell along with working on customers weapons. By far the 07 is the better way to go but ITAR requires you to pay $2000ish... Did you just pay the State department? Did you ever try and get exempt?

[Tim McBride]

Good old ITAR.... I know plenty who do not pay it. ATF does not enforce it....yet. When I had mine I didn't pay ITAR, but honestly without an exception from them I was more than likely in the wrong.
An 07 let's you do a lot more than any other FFL, but does place additional burdens on you for zoning and things like the aforementioned ITAR. I had an 07 because I wanted an 02, I did a lot of business building SBR/SBS's and custom AOWs. I also had a decent side business building and selling Post Samples to other dealers.

Thanks for replying Tim. I guess my biggest question is about ITAR... For sake of conversation stick to ar15s. A gunsmith operating with a 01 can preform work on a customers firearms, He can assemble and refinish the persons AR and so forth. Under a 07 I could assemble parts make a complete rifle refinish complete rifles in inventor and sell along with working on customers weapons. By far the 07 is the better way to go but ITAR requires you to pay $2000ish... Did you just pay the State department? Did you ever try and get exempt?

[tstuart34]

Good old ITAR.... I know plenty who do not pay it. ATF does not enforce it....yet. When I had mine I didn't pay ITAR, but honestly without an exception from them I was more than likely in the wrong.
An 07 let's you do a lot more than any other FFL, but does place additional burdens on you for zoning and things like the aforementioned ITAR. I had an 07 because I wanted an 02, I did a lot of business building SBR/SBS's and custom AOWs. I also had a decent side business building and selling Post Samples to other dealers.

Thanks for confirming my thoughts. From all my research in the past couple of weeks I have read that some pay most don't. The ATF says you have to register but that is as far as it goes. I would love to have a 07/02 but I do not have the machinery to start anything like that and I am not in a position to start a big capital venture like that.

We want to focus on Cerakote Coatings, Kydex holsters, and some sales. We will sell AR stripped lowers/uppers, parts kits and gunsmithing packages all separate to avoid the manufacturing issue. A 07 would make things much simpler but we want to make sure that we are doing this as correct as possible. Though it would be more money and paperwork we can always resubmit for the 07.

[shooter]

 I may be wrong. but cant a type 1 dealer, buy registered lower  and build rifles to sell? I though you only needed a 7 , if you were making your own lowers

[Tim McBride]

I may be wrong. but cant a type 1 dealer, buy registered lower  and build rifles to sell? I though you only needed a 7 , if you were making your own lowers

No, as a lower has not had excise tax paid but a complete rifle would need to have that tax paid. You'd be building a rifle and placing it into commerce. I imagine the ATF would not get upset at the occasional assemble of an AR, but doing it on a regular basis, ya they will not be happy.

[tstuart34]

Yeah they might not but personally I don't want to play around with it. Might as well have a little inventory that could be processed in several different ways. Items can be sold as individuals or as a package deal with gunsmithing. It will lower my operating cost by requiring me to carry less inventory.

I believe I can assemble Uppers freely correct Tim?

[Tim McBride]

I believe I can assemble Uppers freely correct Tim?

Yes as they are not in pieces or assembled a firearm.
Also if someones brings you all the pieces, you could assemble it for them to make a complete gun.

[tstuart34]

Yes as they are not in pieces or assembled a firearm.
Also if someones brings you all the pieces, you could assemble it for them to make a complete gun.

That's the game plan. Sell parts THEN put parts together. Stupid games

[Tim McBride]

That's the game plan. Sell parts THEN put parts together. Stupid games

Well be cautious with even that. If I sold you a stripped lower and all the parts to assemble a gun, then I've sold you a rifle that excise tax should be paid on.
Unfortunately with the ATF at what point they say you are manufacturing the gun, versus assembling the parts is arbitrary by the agent it seems.

[tstuart34]

I will do some more research. Maybe even call the ATF about it just to make sure. I am starting to bang my head against the wall with it all. Starting to question if the market will cover the expense....

[newfalguy101]

I have an 01 and I called ATF and asked if it were legal for me to put a COMPLETE lower onto a COMPLETE upper and SELL the gun as a complete rifle, mind you, this entire process entails a whopping TWO pins.

 The answer:  NO, that's is manufacturing!! 

Its legal for individuals to buy uppers and lowers and then sell their completed gun, but dealers ( holding an 01 ) cannot, go figure....

[Tim McBride]

I have an 01 and I called ATF and asked if it were legal for me to put a COMPLETE lower onto a COMPLETE upper and SELL the gun as a complete rifle, mind you, this entire process entails a whopping TWO pins.

 The answer:  NO, that's is manufacturing!! 

Its legal for individuals to buy uppers and lowers and then sell their completed gun, but dealers ( holding an 01 ) cannot, go figure....

It is because lower was sold as a receiver/frame and not a rifle. By selling it that way the manufacturer didn't have to pay an 11% excise tax. When you assemble them and sell them as a dealer you are making a complete rifle, which is subject to that 11% excise tax.