Legal requirements for doing gunsmith work?

Vernon Tuck · Dec 14, 2011

In another thread I understood somebody to say: "If you have a FFL you can legally do gunsmithing work even if you don't know how".

First question: Did I understand this correctly?

Second question: Does this mean that being an FFL holder is a requirement for doing gunsmith work?

Third question: What is the legal line in the sand between "working on a firearm" and "building one"? To use a crude analogy: In Texas you can build a trailer and get it titled through a paperwork process. Is there a similar process for building a firearm, stamping a serial number on it, and registering it?

If so, can anybody do it? Or do you have to be a gunsmith to do it?

All of this is academic and intended to satisfy my curiosity. I haven't the skill to build a firearm and have no plans to do so. I'm just wondering about how the regulatory framework for doing so.

Thanks,

Vernon

DocAV · Dec 14, 2011

FFLs and other permits

Dear Mr. Tuck,
Although I write from a Foreigner's perspective, I have seen the requirements in Fed.Regs etc, and also seen the Requirements not only for "Normal" Gunsmithing" but also such nice things as "NFA "(MGs) repair and manufacture, which are a higher level of compliance than just "Normal "Guns.

1. A private citizen in the USA can "make" a Gun or "Repair" a Gun, as long as it is not covered by the NFA rules ( ie, Not a Short Barrelled Rifle, Not a machine gun, not a smoothbore Handgun/SBR)...for these latter functions, one must have the appropriate ATFE Class Licence and pay the SOT (Special Occupational Tax) and maintain records etc.

"Make" includes make from raw steel, make from parts, convert from an existing gun, etc.

2. The private citizen can only "Make" or "Repair" on and for his own account and personal use...There is not even a requirement to "serial" the Piece.

3. Once the private citizen wishes to "loan", "sell", "trade", or otherwise dispose of said "homemade" firearm (By Bankruptcy, Family court property settlement, Testamentary legacy), then the necessary paperwork has to be done, a serial number applied in the correct format (UN mandated rules) and any Tax paid to the ATFE as required, also the correct forms filed.

4. Any Making or Repairing Firearms on the account of others, whether for personal profit or not, is regulated by the FFL rules.

5. Once one has an FFL and paid any taxes connected with it, one has effectively signed away certain Constitutional rights regarding Search and seizure, Warrantless searches, etc; The Paperwork trail has to be maintained, and Records kept in good, up to date, working order.

6. An FFL is a Federal Licence; the States & Counties and Cities have other legislation to cover how an FFL can carry on business, some with taxes, some without. All of these have to be adhered to as well.

The States etc. cannot prevent you getting an FFL if your are "clean", but they can make it very difficult Bureaucratically, to carry on Business, whether in a "shopfront" style, or privately. ( Planning Laws,Business Permits, Fire Regulations, etc, etc.). Availablility of Public Liability Insurance is also a Limiting Factor.

7. So far, I have NOT mentioned any "Technical Qualifications" for the Issue of an FFL...there are none. Some jurisdictions may require that a person supplies proof of technical training before advertising oneself as a "Gunsmith"
( " Fair trading" or "Trade descriptions" laws.). But the federal sphere does not interest itself in a purely "commercial" matter.

8. I think that about covers it. I will not go into the NFA area, as that is a two-inch book on its own....Contact Small Arms Review for a copy of "The Rules" or any information in this specialised field.

Regards,
Doc AV
AV Ballistics Film Ordnance Services
"Down Under"

1911MAN · Dec 14, 2011

The FFL licence for gunsmith and retailer are the same licence and allow you to purchase serial# receivers/frames i.e. the firearm by federal regulation and transfer (sell) them to other persons. The BATFE really doesn't care if you have any skill at gunsmithing or not that's between the gunsmith and customer. Technically you don't need a licence to simply work a someones gun long as it's their gun and you return the same gun to them. Considering the reputation of BATFE if you do this too often expect them to cause your heartache and discontent.

speerchucker30x3 · Dec 14, 2011

I thought it was a prerequisite to swear on a stack of bibles and write (I DON'T GOT A BLOODY CLUE, BUT IT DON'T MATTER NONE CAUSE I GOTS ALL KINDS OF GNARLY OLE TOOLS AN STUFF) on any business license application these days?

Vernon Tuck · Dec 14, 2011

Doc and everybody...

I LOVE THIS PLACE!

Thanks!

Vernon

keydiverfla · Dec 15, 2011

To muddy the waters a bit more, I'll toss this in.
#1-True, you do not have to know what you are doing if you have the proper lic.
#2-To do work or firearms you must have the proper lic.. Even doing painting on a firearm requires it.
#3- You can build, make, repair your own firearms. Only time you need a license is when commerce is involved.
Not all FFL lic are equal. I have a class 07 license which is a manufacturer. Gunsmiths typically operate under a class 01. Once they begin to disassemble and start modifying things does BATF get cranky about the lic classification.

Ducati900ss · Dec 5, 2013

I have been looking into this and to update something said before. If you are to work on someone elses firearm and they are NOT present while you are working on it, say they just drop it off, you MUST have an FFL and log it in and back out.

bardell · Dec 6, 2013

Fun fact - in The Peoples Republic of NJ, where I reside, technically you'd need a firearms manufacturers permit/license to build any gun at all...and 'we' don't honor the Federal Gubbmints dictations regarding pre-1899/blackpowder guns. Just plain stupidity, you need an FPID for a BB gun here.

67Cuda · Dec 6, 2013

I've heard that you can work on anything you want with no FFL anything, you just couldn't keep it on the premises overnight.
Which wouldn't make since if your running a gunsmiths business. You would need an FFL of some type.

Tom

keydiverfla · Dec 7, 2013

Just get an 07 lic and be done with it. The 01 lic is too fuzzy on what you can and can't do depending on ATF agent you talk to. And don't sweat ITAR, not in your realm.

Cole2534 · Dec 7, 2013

keydiverfla said:
Just get an 07 lic and be done with it. The 01 lic is too fuzzy on what you can and can't do depending on ATF agent you talk to. And don't sweat ITAR, not in your realm.

Can you elaborate more on this? I'd love get my 07/02, but I was under the impression it was more effort than some docs and cutting checks? Specifically, I want to build/test silencer designs and possibly an MG or 2 for testing.

Seems like the cost is about $2250/yr plus ITAR. What are the pitfalls?

keydiverfla · Dec 9, 2013

If you will be building suppressors, MG's (class 3) thats past me. You can read up on ITAR if you google it.

Dieseldoc · Dec 10, 2013

If you have an 07 manufacturers' license you are definitely supposed to register with ITAR. Regs state "manufacturer". They do not differentiate between what you manufacture or how much. I recently surrendered my 07 document and acquired an 01 account of vicious rumors about the coming enforcement of ITAR rules that would be retroactive. In other words if you have been doing business for years without registering you could be liable to the tune of the ITAR fee every year you have been in business. Not worth the risk to me.

Tom-C · Dec 26, 2013

I also have been looking at this.

I AM NOT A LEGAL EXPERT, just someone that has been looking into this for a while.

Having an FFL does not imply any ability or confer any competence.

If you get a Type-1 license you can do “Gunsmithing”. That is defined by the BATFE as any work on a customer’s gun.

If you want to do ANYTHING on a frame or pistol the company owns (like changing a grip screw), you need a Type-7 license. That includes buying a frame, selling it to a customer and then taking it back to build.

It's the ownership of the gun that determines whether you are "gunsmithing" or "manufacturing."

Customer owns the firearm and brings it to you = gunsmithing
Dealer buys the firearm or receiver, works on it and sells it = manufacturing

If you get a Type-7 manufacturing license and modify and sell guns, you MUST register with the ITAR at an additional cost of $2250.00 per year.

If you manufacture more than 50 guns a year you must collect excise tax on each one and mark them with your company name and address.

Another point, having a manufacturer’s license can significantly increase insurance, drive zoning and licensing people batty. The can only see some big commercial operation regardless of how you explain it.

To go a little deeper, this is out of the BAFTE FAQs:
http://www.atf.gov/regulations-rulings/ ... 010-10.htm

"In contrast, a dealer-gunsmith may make or acquire his/her own firearms, and repair, modify, embellish, refurbish, or install parts in or on those firearms. If the dealer-gunsmith then sells or distributes those firearms for livelihood and profit, the dealer-gunsmith is engaged in his/her own business of manufacturing firearms. A person engaged in the business of manufacturing firearms for sale or distribution is required to be licensed as a manufacturer, identify/mark all firearms manufactured, maintain permanent records of manufacture, submit annual manufacturing reports, and pay any taxes imposed on firearm manufacturers. A licensed dealer-gunsmith who becomes licensed as a manufacturer must also segregate all firearms manufactured for that business separately from firearms for which gunsmithing services are being performed.

To facilitate inspection and ensure that ATF can determine that a licensed dealer-gunsmith is not engaged in the business of manufacturing firearms for his own sale or distribution without a manufacturer’s license, licensees may take the following steps:

(1) maintain a copy of the current, active license of all contracted licensees;

(2) maintain a copy of the contract and all instructions for gunsmithing services rendered;

(3) maintain a copy of the invoices for gunsmithing services;

(4) timely and accurately reflect all firearms acquisitions and dispositions consistent with the contract for gunsmithing services rendered; and

(5) in the case of a licensed dealer-gunsmith, maintain required bound acquisition and disposition records for all gunsmithing activities separate from other dealer’s records.

Unless licensees take these steps, ATF may presume that a particular dealer-gunsmith is engaged in his own business of manufacturing firearms for sale or distribution without a manufacturer’s license, and take corrective administrative or other enforcement action

Claude Wright · Jan 3, 2014

Tom-C said:
I also have been looking at this.

I AM NOT A LEGAL EXPERT, just someone that has been looking into this for a while.

Having an FFL does not imply any ability or confer any competence.

If you get a Type-1 license you can do “Gunsmithing”. That is defined by the BATFE as any work on a customer’s gun.

If you want to do ANYTHING on a frame or pistol the company owns (like changing a grip screw), you need a Type-7 license. That includes buying a frame, selling it to a customer and then taking it back to build.

It's the ownership of the gun that determines whether you are "gunsmithing" or "manufacturing."

Customer owns the firearm and brings it to you = gunsmithing
Dealer buys the firearm or receiver, works on it and sells it = manufacturing

If you get a Type-7 manufacturing license and modify and sell guns, you MUST register with the ITAR at an additional cost of $2250.00 per year.

If you manufacture more than 50 guns a year you must collect excise tax on each one and mark them with your company name and address.

Another point, having a manufacturer’s license can significantly increase insurance, drive zoning and licensing people batty. The can only see some big commercial operation regardless of how you explain it.

To go a little deeper, this is out of the BAFTE FAQs:
http://www.atf.gov/regulations-rulings/ ... 010-10.htm

"In contrast, a dealer-gunsmith may make or acquire his/her own firearms, and repair, modify, embellish, refurbish, or install parts in or on those firearms. If the dealer-gunsmith then sells or distributes those firearms for livelihood and profit, the dealer-gunsmith is engaged in his/her own business of manufacturing firearms. A person engaged in the business of manufacturing firearms for sale or distribution is required to be licensed as a manufacturer, identify/mark all firearms manufactured, maintain permanent records of manufacture, submit annual manufacturing reports, and pay any taxes imposed on firearm manufacturers. A licensed dealer-gunsmith who becomes licensed as a manufacturer must also segregate all firearms manufactured for that business separately from firearms for which gunsmithing services are being performed.

To facilitate inspection and ensure that ATF can determine that a licensed dealer-gunsmith is not engaged in the business of manufacturing firearms for his own sale or distribution without a manufacturer’s license, licensees may take the following steps:

(1) maintain a copy of the current, active license of all contracted licensees;

(2) maintain a copy of the contract and all instructions for gunsmithing services rendered;

(3) maintain a copy of the invoices for gunsmithing services;

(4) timely and accurately reflect all firearms acquisitions and dispositions consistent with the contract for gunsmithing services rendered; and

(5) in the case of a licensed dealer-gunsmith, maintain required bound acquisition and disposition records for all gunsmithing activities separate from other dealer’s records.

Unless licensees take these steps, ATF may presume that a particular dealer-gunsmith is engaged in his own business of manufacturing firearms for sale or distribution without a manufacturer’s license, and take corrective administrative or other enforcement action

First you don't need a 07 to change a grip screw on inventory. A 01 can do that.
Second if you are a 07 you must mark every gun you make , the 50 number is the limit for paying the tax due.
Third I have 07 customers who operate a home as some 01 do.

wyop · Jan 4, 2014

As explained to me by my ATF contact/inspector, this are his criteria for "manufacturing" vs. "gunsmithing:"

1. You're making an operational firearm from a receiver which has never been assembled into an operational firearm before. His wrinkle was "even if the receiver, barrel, etc are all brought to you by a customer, i.e., you're not building a rifle/pistol/etc on speculation of someone buying it later..."

If you're assembling a receiver into a working firearm when you don't have a customer for that gun prior to doing so, then he believes that is absolutely manufacturing.

2. Making receivers or other numbers components is clearly manufacturing. A barrel/stock isn't a numbered component, an action, receiver or frame is.

3. Helping people turn 80% lowers into finished receivers is manufacturing as far as he was concerned, even if the party in question is standing there. If the person bringing you the lower is just asking for advise, and you tell them what they have to do and they then do it somewhere else, you're not manufacturing. Neither is making a fixture so that someone can do that operation with their own tools.

So: As far as my ATF contact is concerned, if you're just working on guns that already exist, were at some point fully operational guns, which were sold and on which the excise tax was collected (or would have been, if the maker made more than 50), then you don't need a 07 FFL.

As for other requirements for being a gunsmith: You should check your local zoning laws prior to apply for the FFL. You want all your local zoning, business/sales/use tax/licenses in a row before you apply for the FFL.

MIBill · Jan 5, 2014

Any time ANYONE takes legal advice form someone on a board, whether this one or ANY other, they are getting exactly what they have paid for! And PROBABLY getting exactly what they deserve.

wyop said:
As explained to me by my ATF contact/inspector, this are his criteria for "manufacturing" vs. "gunsmithing:"

1. You're making an operational firearm from a receiver which has never been assembled into an operational firearm before. His wrinkle was "even if the receiver, barrel, etc are all brought to you by a customer, i.e., you're not building a rifle/pistol/etc on speculation of someone buying it later..."

If you're assembling a receiver into a working firearm when you don't have a customer for that gun prior to doing so, then he believes that is absolutely manufacturing.

The law as written and interpreted does NOT support this. The "receiver" IS the firearm whether or not it has ever been assembled. Under this interpretation a smith/dealer who buys, say 5, Thompson Contender and or Encore frames (never assembled firearms) and a few barrels would be engaged in "manufacturing" simply because they have not identified the client(s) for whom these will later be assembled and sold?

Further EVERY licensed gunsmith I have ever met buys frames, and receivers as well as other parts to later assemble into salable firearms. It is a part of their business. The law is VERY clear on when manufacturing takes place. Internet advice on the topic is dubious at best! Read the law and consult with a lawyer who specializes in the topic!

wyop said:
2. Making receivers or other numbers components is clearly manufacturing. A barrel/stock isn't a numbered component, an action, receiver or frame is.

This IS exactly what manufacturing is. IF one is not making any component which legally requires a s/n, manufacturers name, place of manufacture... NO manufacturing is taking place.

wyop said:
3. Helping people turn 80% lowers into finished receivers is manufacturing as far as he was concerned, even if the party in question is standing there. If the person bringing you the lower is just asking for advise, and you tell them what they have to do and they then do it somewhere else, you're not manufacturing. Neither is making a fixture so that someone can do that operation with their own tools.

This is NOT how the laws have been interpreted either. In the case of "build parties" who is responsible for "manufacturing" a function of who is responsible for making the crank handles more. BATFE has taken a rather hard line on "build parties" where someone only puts a part in a machine and pushes the big GREEN "START" button.

However, even in cases where someone is standing by your side when you move the handles from one position to the next. Bottom line... You can show others HOW but they must be responsible for actually doing!

wyop said:
So: As far as my ATF contact is concerned, if you're just working on guns that already exist, were at some point fully operational guns, which were sold and on which the excise tax was collected (or would have been, if the maker made more than 50), then you don't need a 07 FFL.

And this is the problem. Ask 50 BATFE agents ANY question and you are likely to get 50 different answers, and NONE or them correct! KNOW the laws and don not rely on internet advice!!!

wyop said:
As for other requirements for being a gunsmith: You should check your local zoning laws prior to apply for the FFL. You want all your local zoning, business/sales/use tax/licenses in a row before you apply for the FFL.

Consult with a legal PROFESSIONAL prior to applying for any FFL! Advice found on the internet is NOT complete OR reliable, EVER!!!

300sniper · Jan 5, 2014

MIBill said:
Any time ANYONE takes legal advice form someone on a board, whether this one or ANY other, they are getting exactly what they have paid for! And PROBABLY getting exactly what they deserve.

The law as written and interpreted does NOT support this. The "receiver" IS the firearm whether or not it has ever been assembled. Under this interpretation a smith/dealer who buys, say 5, Thompson Contender and or Encore frames (never assembled firearms) and a few barrels would be engaged in "manufacturing" simply because they have not identified the client(s) for whom these will later be assembled and sold?

Further EVERY licensed gunsmith I have ever met buys frames, and receivers as well as other parts to later assemble into salable firearms. It is a part of their business. The law is VERY clear on when manufacturing takes place. Internet advice on the topic is dubious at best! Read the law and consult with a lawyer who specializes in the topic!

This IS exactly what manufacturing is. IF one is not making any component which legally requires a s/n, manufacturers name, place of manufacture... NO manufacturing is taking place.

This is NOT how the laws have been interpreted either. In the case of "build parties" who is responsible for "manufacturing" a function of who is responsible for making the crank handles more. BATFE has taken a rather hard line on "build parties" where someone only puts a part in a machine and pushes the big GREEN "START" button.

However, even in cases where someone is standing by your side when you move the handles from one position to the next. Bottom line... You can show others HOW but they must be responsible for actually doing!

And this is the problem. Ask 50 BATFE agents ANY question and you are likely to get 50 different answers, and NONE or them correct! KNOW the laws and don not rely on internet advice!!!

Consult with a legal PROFESSIONAL prior to applying for any FFL! Advice found on the internet is NOT complete OR reliable, EVER!!!

Your first sentence I 100% agree with but the ATF FAQ disagrees with you as to what a "manufacture" is. Firearms - Frequently Asked Questions - Manufacturers | ATF

wyop · Jan 5, 2014

MIBill said:
Any time ANYONE takes legal advice form someone on a board, whether this one or ANY other, they are getting exactly what they have paid for! And PROBABLY getting exactly what they deserve.

The law as written and interpreted does NOT support this. The "receiver" IS the firearm whether or not it has ever been assembled. Under this interpretation a smith/dealer who buys, say 5, Thompson Contender and or Encore frames (never assembled firearms) and a few barrels would be engaged in "manufacturing" simply because they have not identified the client(s) for whom these will later be assembled and sold?

Further EVERY licensed gunsmith I have ever met buys frames, and receivers as well as other parts to later assemble into salable firearms. It is a part of their business. The law is VERY clear on when manufacturing takes place. Internet advice on the topic is dubious at best! Read the law and consult with a lawyer who specializes in the topic!

This IS exactly what manufacturing is. IF one is not making any component which legally requires a s/n, manufacturers name, place of manufacture... NO manufacturing is taking place.

This is NOT how the laws have been interpreted either. In the case of "build parties" who is responsible for "manufacturing" a function of who is responsible for making the crank handles more. BATFE has taken a rather hard line on "build parties" where someone only puts a part in a machine and pushes the big GREEN "START" button.

However, even in cases where someone is standing by your side when you move the handles from one position to the next. Bottom line... You can show others HOW but they must be responsible for actually doing!

And this is the problem. Ask 50 BATFE agents ANY question and you are likely to get 50 different answers, and NONE or them correct! KNOW the laws and don not rely on internet advice!!!

Consult with a legal PROFESSIONAL prior to applying for any FFL! Advice found on the internet is NOT complete OR reliable, EVER!!!

Here's the bottom line:

There's a guy who comes to inspect my records. You aren't that guy.

Unless and until you are, your interpretation of the regulations doesn't mean much. My ATF inspector, who might well be incorrect, is the guy who can pull my FFL. I'm in the process of building a pile of documentation to help him out the next time he stops by, but until I get him turned around on the issue, I'm not going to get into an adversarial relationship with him. I don't think he invented his position out of thin air - I've met the high level people out of the Denver office, and they tell me that the field inspectors get their interpretation from DC or West Virginia.

Another recent example that shows how complicated this stuff is recently is the definition of "bound record." A change in the Federal Register changed the definition of "bound" and per that definition you can use a three-ring binder with loose forms and the FR called that "bound."

Another FFL out of New Mexico showed his inspector the Federal Register entry, chapter and verse, and his ATF inspector said "OK." That information didn't propagate through the Denver office and if I wanted to change my inspector's mind, I'm going to have to show all the same documentation. So you're right that this is much like the IRS and IRC - ask 10 agents one question, get 12 answers/interpretations. The one that matters is your inspector - s/he's the person who can get your FFL pulled.

Once you lose your FFL, it would be highly costly to gain another one.

wyop · Jan 5, 2014

300sniper said:
Your first sentence I 100% agree with but the ATF FAQ disagrees with you as to what a "manufacture" is. Firearms - Frequently Asked Questions - Manufacturers | ATF

Here's the irony with my inspector:

Per that FAQ, he has his interpretation exactly backwards. He thinks that sporterizing surplus rifles (that are already functional firearms before you start) is NOT manufacturing, but having a customer come in with a receiver, barrel, stock, etc and assembling it for him is manufacturing.

The confusion comes from the ATF's history as a tax collection agency. Here's what the TTB has to say on what is manufacturing vs. gunsmithing:

TTB | FAET Gunsmiths

And even then, there's a discrepancy between what the ATF considers manufacturing in that FAQ vs. what the TTB thinks is manufacturing. The TTB still uses some of the "substantial increase in value" idea that the ATF was trying to peddle only a couple years ago. See the below document:

http://www.ttb.gov/applications/pdf/gunsmith-letter-revised.pdf

Here's the key howler for me:

"Engraving performed on a firearm could be considered an act of manufacture when the engraving substantially increases the value of a firearm. Engraving that does not substantially increase the value of the firearm is generally not an act of manufacture. "

Oooookay. Since much of the valuation of an engraving job is the artistic merit, now we're talking of aesthetics, taste and art evaluation to arrive at some value, and then we have to start dickering about what is "substantial." Is this a dollar amount or a percentage gain on top of the original valuation?

The following ATF ruling, however, adds weight to my inspector's position:

http://www.atf.gov/regulations-rulings/rulings/atf-rulings/atf-ruling-2010-10.htm

NB the following area:

"ATF’s long-standing position is that any activities that result in the making of firearms for sale or distribution, to include installing parts in or on firearm frames and receivers, and processes that primarily enhance a firearm’s durability, constitute firearms manufacturing that may require a manufacturer’s license." Later on in the same letter, they make a distinction between guns owned by a customer brought in to have parts installed/replaced and guns which the gunsmith bought to modify.

When you read the ATF FAQ and the TTB FAQ's, you're left with more questions than answers. The TTB considers taking in a Mauser, bending down the bolt handle, drilling for scope mounts and selling the result to be "manufacturing." But they consider assembling an action, barrel and stock supplied by the customer into a workable firearm to not be manufacturing.

The most consistent commonality I see between the ATF and TTB is whether or not the gunsmith owned the gun on his books when the modifications/rebarreling/etc were done, or did a customer own the gun, then bring it in for all the work to be done. If the latter, the gunsmith appears to be much less likely to be a manufacture.

Legal requirements for doing gunsmith work?

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