Home Forums Hunting & Shooting Gunsmithing Applying for an FFL

Hey folks,

I'm starting a gunsmithing/machining/welding/etc business out of my garage and will be applying for an FFL (as required by law). I was wondering if anyone here would be willing to share their experiences: what to expect, what to watch out for, any other tips, etc.

Also, I've owned and been involved with running several other businesses but nothing gun related so I'd really appreciate any sage advice.

Thanks in advance,

Tony

Leave plenty of time to get the ffl.Mine took 6 months and I have been told that is relatively quick. Do not give up your day job just yet. It is a hard business to make money in.

You will get a visit from a ATFE employee, most likely an office nerd, not an enforcement guy. The guy that interviewed me was not a gun guy at all. He asked questions like "Do you plan to make a living doing this?, Do you have a safe place to secure the weapons?, Questions like that in order to fulfill some sense of filling out paperwork. Then you will discuss some bookkeeping issues. Don't buy any kit you may see in Shotgun News or anything like that. Everything can be downloaded off the internet or bought from Brownells. They try to discourage hobby dealers so if you admit you are doing it to advance your hobby or collection you will be rejected. You don't have to make money at your business, just be in business. The IRS handles profit...

cliff444 - Thanks for the info. I hadn't thought of the potential time frame, but it makes sense due to the agency and paperwork involved. I'm in a pretty good situation as my 'day job' is raising my son, who starts kindergarten next year. Also, running it out of my garage will give me very low overhead (it's paid for).

supercrewd - Thanks for the advice. I had seen those kits and was already wary of them as they seemed unnecessary. It's good to hear that affirmed from another source. The bookkeeping that you refer to, is that the 'bound book' that I saw mentioned on the ATF website?

Be sure your local laws will allow you to operate the "busines" out of your house/garage...I was issued a FFL here at my home but then had to return it as it was found that my city law prohibited having the "shop" at my home.
I am a C&R holder now and can buy Relic guns(50 year old) without doing transfer thru an FFL dealer.

Yes, the "bound book" does not have to follow any particular look, it just has to have all the necessary info in it for them to easily access the information. I downloaded a copy off the internet and have been using that. Or you can make your own. Oh, and it has to be connected together or "bound" instead of a loose pile of papers. Make the cover say "bound book" on it (use a crayon if necessary, they don't care).

Must you apply for a sales & use tax license when you obtain an FFL in order to show you have the capacity to run a business rather than a hobby/collection?

More great info, thanks guys!

I just finished going through the zoning board and city commission to get approved for a 'conditional use permit' which allows me to run a business out of my shop/garage even though it's in a R2 district. Fortunately my neighbors are cool (several spoke in support at the public hearing) and the city is very business friendly.

A requirement for issuance of a federal FFL is that you be in total compliance with ALL state and local laws and regulations...both gun laws and business laws/regulations. Each state is different so you should contact your state and local authorities. Many states require an actual �storefront� in order to sell firearms to the public, and many locales prohibit certain home businesses. When you renew your FFL you have to get a signed statement from your local law enforcement agency that you are in compliance with ALL state and local firearms laws.

Other than a C&R (curios and relics) FFL there are no provisions that I am aware of for obtaining a class 01 FFL license for hobby/collection purposes. In order to get an 01 license you have to be operating as either a dealer or a gunsmith, or both. Gunsmithing would include engravers and stock makers who take possession of firearms to do their work. The ATF doesn�t care if you make a profit (though the IRS does) but you do have to show that you are actually making/having transactions that require the use of the license. Most states do not require sales tax on �labor� only businesses.

The ATF does not issues 01 licences just to allow people to buy personal firearms through the mail at wholesale prices. If your bound book shows nothing but �transferred to personal collection� under the disposition section you will have a hard time convincing them that you are operating a �business.�

I was told I had to have a storefront or I couldn't get a license. This was directly from the BATF, had nothing to do with the state at all. Be sure to call them and check. It so happens that I had an existing service station to operate out of.The BATF guy that came by me was an enforcement agent and he came and looked over my situation before he would interview me. They will call the local police and the city government to see what kind of person you are. So happens in this community, I happen to be personal friends with the city manager and police chief, so was told what was going on. It is much more involved than it appears to be, but in the end was well worth all the hassle.

Thanks for the tip on the storefront Cliff, I'll check that out.

I have an FFL and operate from my home as a gunsmith and the ATF and the California DOJ have absolutely no problem with that. California requires a storefront if you are �selling� firearms to non-licensees...not if you are operating as a gunsmith and/or conducting business in person or through the mail with other licensees.

RickB: Nice to hear from someone else operating out of their home. I did some checking on the ATF website and found a requirement to have "premises for conducting business". If the city has granted me a license to conduct business out of my garage I should meet the ATF's requirement as well. At least that's my line of thinking.

I'm currently looking into Montana's laws regarding firearm dealers. Any fellow Montanans familiar with these laws?

Tony,

You are correct. The ATF doesn�t give a hoot if you have a store front or you do it in your bathroom...as long as you are in compliance with state and local laws and have all the required licenses and/or permits.

The ATF just doesn�t want people operating out of the trunk of their car.

I thought you had to have a store front if your were selling handguns. Long guns could be sold out of your shoe box.

I may be wrong...I have not had my FFL since 93.

With certain exceptions you are only �supposed� to conduct your firearms business at the premises listed on your FFL.

It�s my opinion that specific questions regarding firearms laws should be directed (in writing) to the governing agency just to be on the safe side. These things change all the time (depending on who you speak with) and new rulings and interpretations come about on a fairly frequent basis.

Better safe than sorry.

The ATF does not issues 01 licences just to allow people to buy personal firearms through the mail at wholesale prices. If your bound book shows nothing but �transferred to personal collection� under the disposition section you will have a hard time convincing them that you are operating a �business.� [/quote]

You will find that the dealer discounts are pretty pathetic if you do not do large volume. I can usually buy cheaper or same price from wal-mart or online.

The Gun Control Act of 1968, Public Law 90-618

See section 923, paragraph(2)

"(2) The Secretary must approve or deny an application for a license within the 60-day period beginning on the date it is received. If the Secretary fails to act within such period, the applicant may file an action under section 1361 of title 28 to compel the Secretary to act. If the Secretary approves an applicant's application, such applicant shall be issued a license upon the payment of the prescribed fee."

Ha, good luck. I have a friend that applied the same time as me, 2 years ago next month. He hasn't gotten his yet. He called and they told him to apply again. Oh yea, he is out the $200 bucks, too. They cashed his check.

Doesn�t say they �have� to issue the license within 60 days...just that if they don�t you have the right to file a claim.

The ATF is a government agency and it�s pretty silly (naive?) to assume they will be any more efficient than the others are.