At what point do you need an FFL?

[pergoman]

I load ammo for a very small group of close friends who do not roll their own. These guys are not high volume or competitive shooters so its really not a big hassle for me. Lately I have had a few other acquaintances ask about buying ammo from me. I understand that the legal risk is great if something goes wrong. What is the point where you NEED a FFL to sell your ammo?

[jmort]

"At what point do you need an FFL?"

Before you manufacture/sell your first bullet/round of ammunition.

[Nickle]

The ATF says "if you're in the business".

They would also tell you that you already need one. Money changing hands isn't the issue.

And, a Type 06 or 07 has to register under ITAR. That's $2250 a year. No, I didn't miss the decimal point, that's Two thousand, two hundred and fifty dollars a year. Yes, they are busting people on this, and getting back due registration fees and penalties. No, the ATF doesn't enforce this, the State Department does. The ATF found out about it, after the fact (that type 06 FFLs came under it), and thankfully got that info out. The amount you import or export is irrelevant, even if you don't import or export. Still need to register.

http://pmddtc.state.gov/regulations_laws/itar_official.html

http://pmddtc.state.gov/registration/wmr.html


Who Must Register

All manufacturers, exporters, and brokers of defense articles, related technical data and defense services as defined on the United States Munitions List (Part 121 of the ITAR) (PDF, 7MB) are required to register with the Directorate of Defense Trade Controls (DDTC). Registration is primarily a means to provide the U.S. Government with necessary information on who is involved in certain manufacturing, exporting and brokering activities. Receipt of ITAR §123.9 retransfer authorization does not confer any export rights or privileges, but is a precondition for the issuance of any license or other approval for export.

Yes, it's a nasty piece of junk. Adding Type 06 FFLs that don't import or export was done a very few years ago. The Sec State at the time we all know well. Hillary Rodham Clinton, and I'm sure the POTUS wanted her to. I think their idea was to drive the small time Type 06s out of business. Or at least rob a significant amount of their profit.

FWIW, I am a Type 01 and 06 FFL, and I do feel your pain.

[Nickle]

"At what point do you need an FFL?"

Before you manufacture/sell your first bullet/round of ammunition.

I do believe they'll tell you it applies to reloading as well. Money isn't part of it either.

[Smoke4320]

"Before you manufacture/sell your first bullet/round of ammunition."

jmortimer & Nickle are correct on the issue.. you are opening a can of worms you really do not want ..
do not load and sale/trade any ammo without the license..

[Thompsoncustom]

So you can't even reload ammo and just give it to a friend legally?

[Nickle]

Thanks for the back up.

Folks, you may not like what I said, but it is the truth, no guesses, no hot air.

The info comes from the ATF, and we've got a couple really good agents in the area. The kind that want to help folks do right, not prosecute them and throw them in jail. And, they won't come out and say this, but some of them aren't very fond of ITAR either.

[Nickle]

So you can't even reload ammo and just give it to a friend legally?

That one is a real touchy issue. Bottom line, you shouldn't. They can interpret that as a "get around" the law. And, if that's what you're thinking of doing (getting around the law), don't even try. The gain is near nothing, the penalties can run up to a felony conviction with 10-20 years in jail. And, they don't always parole in these cases, can be the full sentence.

[Nickle]

By the way, the money end of it is not relevant. Give or sell, it's the same to the law.

[Smoke4320]

loading for yourself is fine. loading for a non immediate family member is Manufacturing .. Like Nickle said its the law.
You may never hear from them but if you do lookout
and if anyone ever got hurt from one of your reloads you will hear from them

[jonp]

I load some rounds for a few friends. What it is is they want to try some different boolit weights with their guns before going out and buying a box to see if it works and they like it. I'm not in business in doing it and won't be.
I always steer them toward reloading on their own.
A kid at work can't find ammo and asked me to load up 500 rounds for him. I said no and offered to show him how to load his own. Since money is tight for him I loaded some different boolit weights using different powders to see what worked in his gun so he could buy what worked right off the bat and not have to spend money he didn't have experimenting.

[243winxb]

Q: Is a person who reloads ammunition required to be licensed as a manufacturer?

Yes, if the person engages in the business of selling or distributing reloads for the purpose of livelihood and profit. No, if the person reloads only for personal use.

[18 U.S.C. 922(a) (i) and 923(a), 27 CFR 478.41]
http://www.atf.gov/firearms/faq/manufacturers.html#ammo-reloading

[Nickle]

That's all fine and well, until you start looking at legal cases and talk to a few of them (ATF, that it).

It isn't arguable, and you can do whatever your little hearts desire. I'm not the big bad guy here, nor am I trying to scare anybody off, so I could make more profit. I don't and won't take business away from any of you. But, if I can keep a few of you out of the "cross bar motel", it's worth it.

I know what I say is the way it really is. You can jump up and down, scream your lungs raw, look up whatever you wish and post anything you want.

Not one of those things I just mentioned will change what the ATF thinks in any way, shape, for or manner. And, it's THEIR opinion that counts, not yours, and certainly not mine.

I wouldn't recommend trying "technicalities" on them, they've seen them before, you aren't afraid to try you anyways and let a judge sort it out. Takes a few years, costs a LOT of $$$ to pay for a defense attorney too. Oh, you may think you'll defend yourself? I wouldn't attempt that myself, and I'm no coward. I am a qualified paralegal though, and I know better. It isn't small claims court.

Now, as to the situation mentioned in post #11. May or may not be legal. That said, I don't think they will bother you that much. Looks like "one shot deals", other than that 500 round one. That could be trouble.

As to "livelihood", it has yet to stop them from busting a guy (for dealing without a Type 01 FFL) that bought a gun at a gun show and sold it at the same show for a little more money to an undercover ATF agent. The person that got busted was clearly not "in the business", but that didn't matter. And it's happened more than a few times.

They don't cut much slack, especially in some localities. They don't let people off with warnings, just because they can (has happened, don't bank on you getting one).

You've been warned by someone friendly to your situation. Don't shoot the messenger either. I never said I liked what they're doing, just said they do it.

[MT Gianni]

A kid at work can't find ammo and asked me to load up 500 rounds for him. I said no and offered to show him how to load his own. Since money is tight for him I loaded some different boolit weights using different powders to see what worked in his gun so he could buy what worked right off the bat and not have to spend money he didn't have experimenting.

It would be best to have him buy components and allow him to use your equipment to start.

[fcvan]

Years ago, I loaded a lot 'for' friends. Generally, that meant I got them involved at some stage of the process. I had buddies priming brass, buddies casting boolits, buddies collecting and smelting. "Hey, I need some rounds" was usually followed with "buy some powder/primers and come on over." Once they got the knack of loading with me they usually started loading on their own.

Friends I felt like going shooting with were friends I felt like reloading with. I used to cast a lot and trade with my buddies for primers or powder but that meant they brought components over for assembly. I think the only safe way to avoid hassles is to load with someone not for someone. Having a reloading get together coupled with burgers and hot dogs makes for a great afternoon.

[Mike W1]

I don't remember exactly how Dean Grenell put it, but it was to the effect if you charge them enough to make anything they won't want to pay the price and if you sell it to them at their price you're making cooly wages. I've maybe got too much time on my hands I suppose but I'm not wasting it doing someone elses ammo. Guy asked me today about bringing some lead and have me cast and lube/size bullets for him. I put him off till winter when I'll be able to come up with something kinder than telling him to go take a dip in the nearest lake. And besides, far as I'm concerned ANY risk with the law is not something I'm about to do.

[462]

This has been much discussed and dissected, but the reality of it all is that a license is required, even to sell boolits that you've cast.

[pergoman]

So I can cast lead sinkers for fishing and sell them at a flea market without issue but the same alloy in differently shaped molds lands me in the big house? I will keep that in mind when I get too old to care for myself and want three hots and a cot.LOL
I appreciate all of the info and certainly won't go near this dangerous business. This really highlights how screwed up our government has made our country and how ridiculous some of the stuff is that we have to tolerate.

[dbosman]

So I can cast lead sinkers for fishing and sell them at a flea market without issue but the same alloy in differently shaped molds lands me in the big house?

Fact. Not a nice fact, but fact.
If that doesn't chill you, check out this book. Since NPR has been covering it, your local city library should have it available.

Three Felonies A Day: How the Feds Target the Innocent
by Harvey Silverglate and Alan M. Dershowitz (Jun 7, 2011)
Publisher: Encounter Books (June 7, 2011)
Language: English
ISBN-10: 1594035229
ISBN-13: 978-1594035227

There are lots of other books on the same topic, but this one is particularly well documented and citations are easily verified.

[N4AUD]

My son and I load together for our own shooting but I turn down all offers to load for others. I don't want to go to jail and won't accept the responsibility of someone else perhaps getting a defective gun and blaming their gun blowing up on me. Just don't do it, it's not worth it.

[mpmarty]

So furnishing ammo to the cartels in Mexico isn't a great career move?

[N4AUD]

So furnishing ammo to the cartels in Mexico isn't a great career move?
Only if you work for certain federal departments.

[MaryB]

I looked into casting and selling, found out the cost and decided it isn't worth the headache or paperwork.

[MakeMineA10mm]

I manufactured and sold bullets for awhile, goodness - 20 years ago now, and that eventually grew into manufacturing ammo for a short time too.

The FFL wasn't real bad. Application, a little gov't red tape, and a fee. Had to have a location compliant to their regs (zoned, follow all local laws, having set biz. hours so ATF can inspect)

The local laws were actually more expensive and difficult. Had to have a bunker to store primers, and a separate one for powder. Limits of quantity/weight I could store inside too. Fire Dept. came by and inspected twice. ATF never did...

Then, you better get liability insurance, because, sure as shooting, someone's going to blow up a gun with your ammo (even if it's nothing you did wrong). That was $1200.00/year 20 years ago, but I could sleep at night, so worth it to me. I wonder what it costs these days? (I'd bet at least twice as much.)

I did this before ITAR, but there's another $2250.00/year.

I'm guessing, without having any equipment or materials to load with, you're looking at $5000.00/year just for licenses and insurance.

I ran a Ballisti-cast machine and Magma sizer, and 2 Dillon 650s, and was looking for a cheap (used) Ammoload or Camdex. I was selling a lot of bullets and a moderate amount of ammo, and all I had in the end was a minimum-wage job for myself and my partner. In the end, that wasn't enough, we quit and found better jobs. For a long while loading wasn't fun and I did virtually none for myself while operating the biz. I highly caution anyone to think twice before pondering this idea...

[Adam10mm]

http://www.atf.gov/firearms/faq/manufacturers.html#ammo-reloading
Your point of livelihood according to the ATF is attempt. If you receive any consideration for your effort, materials, etc that's considered by them to make an attempt at profit and livelihood therefore you need an FFL. They can define it and put it into context. The very same ATF agent said she wished the ATF just focused on guns and left the "bullet and ammo stuff alone".


I don't remember exactly how Dean Grenell put it, but it was to the effect if you charge them enough to make anything they won't want to pay the price and if you sell it to them at their price you're making cooly wages. I've maybe got too much time on my hands I suppose but I'm not wasting it doing someone elses ammo.
I have no problem selling my ammunition or my bullets. I've been an 07 FFL for a few (6 or 7) years now. Commodity stuff won't work unless you're running machinery. Dillon isn't a machine, it's a press. I'm talking a Magma casting machine with Camdex loaders going 10 hours a day. I'm hand casting hunting boolits and buying SWC boolits from a subcontractor. Revolver only, plus 45 ACP for locals because the eat that stuff for breakfast. Put it this way, my most profitable ammo product...if I could sell only 40,000 rounds of it would be enough to quit my full time job, load for 40 hours a YEAR, and spend the rest of the time selling and spending time with family.


I manufactured and sold bullets for awhile, goodness - 20 years ago now, and that eventually grew into manufacturing ammo for a short time too.

The FFL wasn't real bad. Application, a little gov't red tape, and a fee. Had to have a location compliant to their regs (zoned, follow all local laws, having set biz. hours so ATF can inspect)

The local laws were actually more expensive and difficult. Had to have a bunker to store primers, and a separate one for powder. Limits of quantity/weight I could store inside too. Fire Dept. came by and inspected twice. ATF never did...

Then, you better get liability insurance, because, sure as shooting, someone's going to blow up a gun with your ammo (even if it's nothing you did wrong). That was $1200.00/year 20 years ago, but I could sleep at night, so worth it to me. I wonder what it costs these days? (I'd bet at least twice as much.)

I did this before ITAR, but there's another $2250.00/year.

I'm guessing, without having any equipment or materials to load with, you're looking at $5000.00/year just for licenses and insurance.

I ran a Ballisti-cast machine and Magma sizer, and 2 Dillon 650s, and was looking for a cheap (used) Ammoload or Camdex. I was selling a lot of bullets and a moderate amount of ammo, and all I had in the end was a minimum-wage job for myself and my partner. In the end, that wasn't enough, we quit and found better jobs. For a long while loading wasn't fun and I did virtually none for myself while operating the biz. I highly caution anyone to think twice before pondering this idea...
Liability insurance starts out at $2,100 annually. ITAR is Carter Administration 1976. You would have been subjected but I think in its infancy it wasn't understood by ATF and thus didn't come to light until the past decade.

But really, if you are an 06 FFL $10/yr, plus $2,100/yr insurance and plus $2,250/yr ITAR, what business do you have in this business if you can't pay that or it eats up your profit? If $4,360 annual licensing fees are going to ruin your bottom line, you're a hobby trying to deduct taxes, not a business for profit.

Not a "you" as directed toward you personally, MMA10mm. Just in general.

I don't do a high volume, but if you followed my posts on the two forums I post a lot on, you can see the change in my attitude from fun to burden. I fired a single round in the last 3 years. It was to kill a pig that I then butchered. Making ammo and boolits for others changes not only your outlook on those commodities but also the process itself. Loading a thousand rounds in an hour changes from a weekend of fun to a 5 year supply for yourself.

[Bill Davis]

Hmmm... This makes a substantial amount of sense.... I have been out of touch for a while, attending to other things while life tossed me grenades of one sort or another for the last approximately 7 years (since Judy's death), and I had not considered these points this thread brings to light. It makes sense that if they want us to not have bullets (aka buying options to about all commercial ammo they can, with market pressures evaporating the rest because of the scare of 1.6 Billion rounds optioned to DHS, roughly), it makes sense that they would attempt to make our lives as impossible as they could at the Federal level so that we would be forced out if we were cottage level... THAT sux.... Here I was considering getting back into it..

So, let me ask this, any rumors about muzzleloading ball? Basically we are talking cast lead and pre 1880 weapons that aren't even regulated, but what are the ATF and State Department saying about those?

All this seems to have exploded since I was active! "What this town needs is an enema!" (Jack Nicholson as "The Joker" in Batman (whatever the first one was...).)

[BubbaJon]

*sigh* It always seems these conversations turn to reloading.
Several things make no sense to me:
1 - if I buy a box of 22LR at the store and give it to my buddy because he has none - is that a violation?
2 - If I cast boolits and swap some for more lead is that a jailin?
3 - If a friend has a pistol that he wants to start loading for and I share some of my rounds at the range so he can "test" - is that a jailin?
4 - LGS says they have a few folks wanting small quantities of cast boolits locally. If I buy 1,000 from a commercial outfit and repackage 50 to a box - is that a jailin?

Sorry state of affairs to take common activities and make a federal case out of it - literally.

[Adam10mm]

So, let me ask this, any rumors about muzzleloading ball? Basically we are talking cast lead and pre 1880 weapons that aren't even regulated, but what are the ATF and State Department saying about those?
Off the radar. Muzzleloading firearms are not firearms according to federal law. It must accept fixed (ie cartridge) ammunition to be considered a firearm by the law.

Here's the federal law defining firearm.

http://www.law.cornell.edu/uscode/text/18/921

(3) The term “firearm” means
(A) any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive;
(B) the frame or receiver of any such weapon;
(C) any firearm muffler or firearm silencer; or
(D) any destructive device. Such term does not include an antique firearm.

and further down

(16) The term “antique firearm” means—
(A) any firearm (including any firearm with a matchlock, flintlock, percussion cap, or similar type of ignition system) manufactured in or before 1898; or
(B) any replica of any firearm described in subparagraph (A) if such replica—
(i) is not designed or redesigned for using rimfire or conventional centerfire fixed ammunition, or
(ii) uses rimfire or conventional centerfire fixed ammunition which is no longer manufactured in the United States and which is not readily available in the ordinary channels of commercial trade; or
(C) any muzzle loading rifle, muzzle loading shotgun, or muzzle loading pistol, which is designed to use black powder, or a black powder substitute, and which cannot use fixed ammunition. For purposes of this subparagraph, the term “antique firearm” shall not include any weapon which incorporates a firearm frame or receiver, any firearm which is converted into a muzzle loading weapon, or any muzzle loading weapon which can be readily converted to fire fixed ammunition by replacing the barrel, bolt, breechblock, or any combination thereof.

Next paragraph down is the definition of ammunition.

(17)
(A) The term “ammunition” means ammunition or cartridge cases, primers, bullets, or propellent powder designed for use in any firearm.

Again, reference (16) to find that muzzleloading firearms are not "firearms" as defined by federal law. The ATF enforces two groups of gun laws, the National Firearms Act of 1934 and the Gun Control Act of 1968.

In short, bullets for muzzleloaders are not ammunition as defined by the GCA of 1968 therefore not under ATF jurisdiction with regard to licensing. The State Department is silent on this and I don't think they really give a ****. They generally default to the direct regulatory agency on what something is, in my experience (I'm on the ITAR compliance team at my full time job- totally different industry but we deal with export shipments and the US military). If you want to cast and sell projectiles for muzzleloaders, you don't have any federal licensing to concern yourself with.

[BBQJOE]

It is a sad state of affairs. I'm willing to bet just about every caster here has sat in front of a few thousand bullets and thought, I wonder if I could sell some of these?
It's really too bad. At one time the barter system was pretty much all there was, and I can see us partially swinging back that direction. Next they'll tell us we can't trade animals, or feed stocks. It's a lot like home brewing beer. You can make it, but you can't sell it, nor can you give it away.

[Adam10mm]

The murders of King and Kennedy were the cause of the GCA of 1968. Before that the ATF only dealt with the NFA.

The big problem is everybody wants to do the right thing but there are stupid laws restricting it. All this complicated stuff just to sell lead chunks with some wax on it.

You can give homebrew away. You can gift it to others. It's legal. You just can't sell it unless you pay the tax on it. You can't pay the tax on it unless you're a licensed brewery.

[BBQJOE]

You can give homebrew away. You can gift it to others. It's legal. You just can't sell it unless you pay the tax on it. You can't pay the tax on it unless you're a licensed brewery.
Most of the laws on some of these things are state specific. When I lived in CO. 20 some years ago, there were limits on how much you could make, and you couldn't gift it. There were even laws about transporting it. Things may be different now. But basically my point was what you basically said, lots of stupid meaningless laws.

[JonB_in_Glencoe]

what about the The Firearms Owners' Protection Act of 1986 ?
if you scroll through this page...

http://www.justice.gov/archive/opd/AppendixC.htm


Part III: A Step Backward: The Firearms Owners' Protection Act of 1986

second item:
Narrowed the scope of those who "engage in the business" of dealing in firearms (and are therefore required to have a license) to include only those who devote "time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms." Significantly, FOPA excluded those who buy and sell firearms to "enhance a personal collection" or for a "hobby," or who "sell all or part of a personal collection." The complex definition made it difficult to identify illegal dealers who claim that they are merely "hobbyists" or trading firearms from their personal collection;

fifth item
Permitted sales of ammunition without a license;
and we all know how they define ammunition...
from freakshow's post
http://www.law.cornell.edu/uscode/text/18/921

(17)
(A) The term “ammunition” means ammunition or cartridge cases, primers, bullets, or propellent powder designed for use in any firearm.

Am I just reaching too far by assuming an occasional trade/barter of cast boolits for personal collection or hobby is NOT different from the occasional firearm swap for personal collection or hobby?

[Adam10mm]

Am I just reaching too far by assuming an occasional trade/barter of cast boolits for personal collection or hobby is NOT different from the occasional firearm swap for personal collection or hobby?
Not at all.

In fact I know of a few "big name" bullet casting companies that don't have an FFL. They just cast and sell without regard to the law.

[Nickle]

Am I just reaching too far by assuming an occasional trade/barter of cast boolits for personal collection or hobby is NOT different from the occasional firearm swap for personal collection or hobby?


Not at all.

In fact I know of a few "big name" bullet casting companies that don't have an FFL. They just cast and sell without regard to the law.

Sale, you're 100% OK. No license required. Manufacture is a whole different story, and that includes reloading ammo and casting or swaging bullets.

I doubt they'll hassle you over the genuine occasional trade or barter to better your collection or use. But, that would be extremely rare, maybe a time or two per year, and it's still iffy. Best bet? Talk to your local ATF folks.

Those companies ignoring the law and still casting and selling bullets? Well, when they get caught, the penalties will be severe. They'll certainly get hit for past ITAR registrations, almost certainly with penalties and interest, at $2250 per year (before penalties and interest), none of which is administered or under the ATF, but the Secretary of State (the current head of which is definitely anti-gun, along with the previous one). I doubt they'll cut much slack. Then there's the ATF penalties, which may include jail time, and their past record tells me they will pursue a case, even if it's hard to prove. The penalties exceed one year in prison, which automatically negates future gun rights.

Is it worth the trouble? I think not.

And, Type 06 FFL's (ammo manufacture) falling under ITAR is fairly recent. The ATF themselves got blindsided by it, and enforcement is just starting. So, haven gotten away with not registering in the past couple of years doen't mean they won't catch you.

[wmitty]

Nickle

Thanks for taking the time to present the information you have posted. I appreciate someone warning me when I might be walking into a "minefield"; and this certainly looks like that type of situation. I have a couple of friends who want me to show them how to reload, and I'll be glad to do so. However, I was told years ago it was o.k. to reload for someone if you were loading their fired brass which they had brought to you. The old gunsmith I hung around used to do this for his customers back in the 60's and I never heard any different. A word to the wise is sufficient. Thanks!

[Nickle]

Back in the 60's, the rules were different.

Now, something I didn't mention was collecting and reporting the 11% excise tax. That's been around about forever, and doesn't apply to reloading someone's brass. New or used, no difference, just if it's already theirs or not.

Teaching someone how to reload doesn't require a license or ITAR. Helping them reload doesn't either. Just doing it for them.

[Adam10mm]

Those companies ignoring the law and still casting and selling bullets? Well, when they get caught, the penalties will be severe. They'll certainly get hit for past ITAR registrations, almost certainly with penalties and interest, at $2250 per year (before penalties and interest), none of which is administered or under the ATF, but the Secretary of State (the current head of which is definitely anti-gun, along with the previous one). I doubt they'll cut much slack. Then there's the ATF penalties, which may include jail time, and their past record tells me they will pursue a case, even if it's hard to prove. The penalties exceed one year in prison, which automatically negates future gun rights.
Some have been around longer than I've been alive (I'm 32yo) and never held an FFL. The number of people who have been put in jail for manufacturing ammunition without an FFL is precisely 0.

And, Type 06 FFL's (ammo manufacture) falling under ITAR is fairly recent.[/QUOTE]
No it hasn't. It's been that way since the day ITAR was passed. If you manufacture barrels for firearms, you are a manufacturer of defensive articles and must register for ITAR. That's nothing new either, it's been that way since the law was passed in the 1970s.


Back in the 60's, the rules were different.
Pre 1968 there was no FFL. Traditionally gunsmiths reloaded ammo for customers as a side gig for extra revenue.


Now, something I didn't mention was collecting and reporting the 11% excise tax. That's been around about forever, and doesn't apply to reloading someone's brass. New or used, no difference, just if it's already theirs or not.
That is correct about the Pitman Roberston Act. I think 1930s is when that was passed. And there's different rules with the tax rate as well. If you sell consumer direct and no wholesale, it's a reduced tax.

[Nickle]

Some have been around longer than I've been alive (I'm 32yo) and never held an FFL. The number of people who have been put in jail for manufacturing ammunition without an FFL is precisely 0.

Put in jail, you may be right (but, that's not fully relevant, is it). If you are convicted of a crime punishable by more than one year (as in a year and a day), then you lose the right to possess a firearm. Doesn't matter what your sentence is, it's the max penalty that matters.


"And, Type 06 FFL's (ammo manufacture) falling under ITAR is fairly recent."

No it hasn't. It's been that way since the day ITAR was passed. If you manufacture barrels for firearms, you are a manufacturer of defensive articles and must register for ITAR. That's nothing new either, it's been that way since the law was passed in the 1970s.

OK, I may have been wrong on that one. But enforcement apparently is. And knowing about it certainly is. This is common knowledge among Type 06 FFLs and ATF agents. Unless you fall into either group, you obviously wouldn't know that.



Pre 1968 there was no FFL. Traditionally gunsmiths reloaded ammo for customers as a side gig for extra revenue.

BS. I've got a family business, we've been FFL's since 1949. The Type 01 requirement dates back to I would say 1934, without looking it up. I've seen evidence that tends to back that. Now, ammo itself didn't come into play until GCA 68 passed. Remember, I was around for that, and worked part time in the family shop. Not sure if the Type 06 FFL was required of manufacturers before then or not. See further down for clarification on the excise tax issue.



That is correct about the Pitman Roberston Act. I think 1930s is when that was passed. And there's different rules with the tax rate as well. If you sell consumer direct and no wholesale, it's a reduced tax.

Wrong on so many levels. Again, you're not an FFL. I doubt you have the EIN, special taxpayer ID or collect excise tax. So, you're talking what's essentially rumor. Here's the skinny. It's 11% of the MSRP. If you set an MSRP (and you pretty much have to in this case), it's 11% of the retail price of the item. If you sell consumer direct, then it's 11% of that. If you sell wholesale, then it's 11% of what they are supposed to sell it for.

I'll tell you, reloading someone's brass requires a manufacturer's license (Type 06), but excise tax isn't paid, as you aren't selling complete ammo. And, the excise tax requirement predates GCA 68. And, that excise tax is paid to the IRS, not ATF, isn't ATF's rule.

Friend, you can do whatever you wish. Right now, I'd say you've just admitted you're engaged in illegal activity on an open website. Not a real smart thing to do, and previous posters have warned against this behavior. Just because you haven't been caught yet, doesn't mean you won't, and doesn't mean they'll grant you any leniency. Me, I'll stay legal. And, remember, there are LEOs and Federal employees that visit (and read posts) this website. They do so for the purest of reasons, they have an interest in cast and/or swaged bullets and reloading.

[Adam10mm]

BS. I've got a family business, we've been FFL's since 1949. The Type 01 requirement dates back to I would say 1934, without looking it up. I've seen evidence that tends to back that. Now, ammo itself didn't come into play until GCA 68 passed. Remember, I was around for that, and worked part time in the family shop. Not sure if the Type 06 FFL was required of manufacturers before then or not. See further down for clarification on the excise tax issue.
1938 and then changed again in 1968. Forgot about the FFA of 1938. Gets buried with the GCA of 1968 since it amended the FFA of 1938.

http://en.wikipedia.org/wiki/National_Firearms_Act_of_1934

http://en.wikipedia.org/wiki/Gun_Control_Act_of_1968


Wrong on so many levels. Again, you're not an FFL. I doubt you have the EIN, special taxpayer ID or collect excise tax. So, you're talking what's essentially rumor.
Actually yes I am an FFL. I have had an 07 FFL since 2008 and an 06 FFL two years prior to that. I have an EIN number and I was an SOT taxpayer for NFA weapons until July of this year. I do not collect excise tax because I reload customer brass and return it to them as loaded ammunition, thus exempt from FET. I also load for law enforcement agencies and these agencies are FET exempt, therefore I'm not liable for FET.


Here's the skinny. It's 11% of the MSRP. If you set an MSRP (and you pretty much have to in this case), it's 11% of the retail price of the item. If you sell consumer direct, then it's 11% of that. If you sell wholesale, then it's 11% of what they are supposed to sell it for.
You are wrong.

http://ttb.gov/firearms/reference_guide.shtml#5


B. Sales to Retailers or at Retail.

Definitions.
Wholesale distributor. A person engaged in the business of selling articles to persons engaged in the business of reselling such articles. See 27 CFR Section 53.94(c)(1).
Sales to retailers or to a retail dealer. S ales to individuals who are engaged in the business of selling articles at retail. See 27 C.F.R. Section 53.94(c)(2).
Sales at retail. Sales of a taxable article to a purchaser who intends to use or lease the article rather than resell it. See 27 C.F.R. Sections 53.94(c)(1).
CSP Rule for Sales at Retail (General Rule): The taxpayer can elect to use the lower of its:
Actual sale price; or
Highest published tax-included price to wholesalers at the time of the taxable sale.
See 26 USC Section 4216(b)(1); 27 CFR Section 53.94
Revenue Ruling 82-273 : If the manufacturer does not make any sales at wholesale, then it can use 75% of its actual sale price as its taxable sale price.
CSP Rule for sales to retailers (Special Rule). To elect the CSP under this rule the taxpayer must:
Make regular sales of a taxable article to retailers; and
Regularly sell taxable articles to one or more wholesale distributors in arms length transactions.
If the above two conditions are met the taxpayer can elect to use the lower of its:
Actual sale price; or
Highest published tax-included price to wholesalers at the time of the taxable sale.
If these conditions are not met the taxpayer must use its actual sale price as its taxable sale price. See 26 USC Section 4216(b)(2); 27 CFR Sections 53.94(c)(1)-(3),.96.

Like I stated above in my previous post. If you make only retail sales and no wholesales, it's a reduced rate. It's 11% at 75% of the retail price. If you sold retail $20 box of ammunition and never sell wholesale, you don't pay 11% tax on the $20 sale, you pay 11% tax on 75% of the sale price, which is only $15. You pay 11% tax on $15, not $20, therefore a lesser rate because the effective rate is 8.25% tax rate. That is a fact. Read the law, read the ruling quoted nice, bold, and in red print for you.


I'll tell you, reloading someone's brass requires a manufacturer's license (Type 06), but excise tax isn't paid, as you aren't selling complete ammo.
Yes, I know that. I said that before.


And, the excise tax requirement predates GCA 68. And, that excise tax is paid to the IRS, not ATF, isn't ATF's rule.
Right. I thought it was in the 1930s that the Pitman Robertson Act was passed, but it was in fact 1919.


2. What agency collects FAET?

Since its inception in 1919, different Federal agencies have been responsible for overseeing the collection of FAET. From 1919 to 1990, the Internal Revenue Service (IRS) was responsible for collecting FAET. On January 1, 1991 , this function was transferred from the IRS to the Bureau of Alcohol, Tobacco and Firearms (ATF).

On November 25, 2002 , President Bush signed into law the Homeland Security Act of 2002. The Homeland Security Act divided the functions of ATF into two new agencies: the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in the Department of Justice and the Alcohol and Tobacco Tax and Trade Bureau (TTB) in the Department of the Treasury. On January 24, 2003 , TTB became responsible for administering the collection of FAET and handling the regulatory and taxation aspects of the alcohol and tobacco industries. The TTB's National Revenue Center performs all duties supporting the collection of FAET.



Friend, you can do whatever you wish. Right now, I'd say you've just admitted you're engaged in illegal activity on an open website. Not a real smart thing to do, and previous posters have warned against this behavior.
Right now I'd say you've just made an *** out of yourself by falsely accusing me of breaking the law and by you spreading false information about the law. I provided you with facts, citations, and the laws. Educate yourself about what you are talking about and whom you are talking to before you open your mouth and make a fool of yourself again.

[Nickle]

You're right, I have falsely accused you of breaking the law. I also had no knowledge you weren't, and your own posts led me to believe you were.

I also am not perfect. But then, I never said I was. Thanks for the info on excise tax, I wasn't aware of that part, but then, the other party in the business has handled that part of it over the years.

I do believe I already mentioned the fact that no excise tax is paid on reloading someone's brass they provide. And, obviously federal agencies are exempt of these taxes.

That doesn't make me an ***, it makes me guilty of being gullible enough to believe you on some issues.

You know, you've given a lot of folks the wrong impression, and came near to soliciting them to commit felonies. That isn't the right thing to do.

Right now I've come to the conclusion that no matter what I say, you'll dispute it. I've tried to keep good people on the right side of the law, maybe I have made a couple of mistakes quoting the law. None of them have a great relevance on the OP, by the way.

As to FFL's existing before 1968, you can trust Wikipedia or someone that worked in a licensed shop AND the ATF. It may nit have been called a Type 01 before 1968, but there were licensed gun dealers, the ATF managed them and they had bound books. Know who Wikipedia really is? I do.

[Adam10mm]

I apologize for taking harsh tone with you. I get fairly livid when I'm the target of false accusations. On just about every major gun forum, you'll notice I'm the one that educates others on the laws in regard to ammunition manufacturing and required licensure. I may be still fairly new at this industry, but I know a lot of what I'm talking about because I read the law and discussed it with attorneys to make sure I'm in the right.


And, obviously federal agencies are exempt of these taxes.
Actually not so. Federal agencies are NOT FET exempt. Local government agencies and the Department of Defense (which includes the US Coast Guard) are the only LE agencies that are exempt. Federal LE agencies such as the DOJ, FBI, ATF, DEA, Postal Inspectors, US Marshal Service all have to pay FET.


Tax-exempt sales

1. What is a tax-exempt sale?

A tax-exempt sale is a sale of an article where the tax never attaches.

2. Are certain types of sales exempt from FAET? When may I sell an article tax-exempt?

The following types of sales are exempt from FAET:

Sales of Firearms Subject to the National Firearms Act (NFA). [Refer to 26 U.S.C. 4182(a) , 5845 and 27 CFR 53.62(a)].
Firearms and Ammunition Purchased with Funds Appropriated for a U.S. Military Department [Refer to 26 U.S.C. 4182(b) and 27 CFR 53.62(b)].
Sales to the U.S. Coast Guard. [Refer to 14 U.S.C. 655 and 27 CFR 53.62(b)(2)].
Sales to Federal Reserve Banks. [Refer to 12 U.S.C. 531].
Sales by Small Manufacturers, Producers and Importers (Small Business Exemption). [Refer to 26 U.S.C. 4182(c) and 27 CFR 53.62(c)].
Articles Manufactured or Produced by Indians in Alaska. [Refer to 26 U.S.C. 4225].
In addition, the tax on the sale of firearms and ammunition also does not apply, under certain circumstances, to the following:

Certain Shell and Cartridge Reloading Services. [Refer to 27 CFR 53.11]
Firearms and Ammunition for personal use. [Refer to 27 CFR 53.112(b)]
and


Tax-free sales

1. What is a tax-free sale?

A tax-free sale is a sale of an article where the tax originally attaches. However, because of the nature of the sale, you are eligible to receive a refund of the tax.

2. Are certain types of sales exempt from FAET? When may I sell an article tax-exempt?

You may only sell an article tax-free:

For use in further manufacture [Refer to 26 U.S.C. 4221(a)(1), 27 CFR 53.131, and 27 CFR 53.132] ;
To a purchaser who will resell it for use in further manufacture [Refer to 26 U.S.C. 4221(a)(1), 27 CFR 53.131, and 27 CFR 53.132];
For export [Refer to 26 U.S.C. 4221(a)(2), 27 CFR 53.131, and 27 CFR 53.133];
To a purchaser who will resell it for export [Refer to 26 U.S.C. 4221(a)(2), 27 CFR 53.131, and 27 CFR 53.133];
For use as supplies on vessels or aircraft [Refer to 26 U.S.C. 4221(a)(3), 27 CFR 53.131, and 27 CFR 53.134];
To state and local governments for their exclusive use ( Note: this does not apply to Federal agencies) [Refer to 26 U.S.C. 4221(a)(4) , 27 CFR 53.131, and 27 CFR 53.135] ; and
To nonprofit educational organizations [Refer to 26 U.S.C. 4221(a)(5), 27 CFR 53.131, and 27 CFR 53.136]


Right now I've come to the conclusion that no matter what I say, you'll dispute it. I've tried to keep good people on the right side of the law, maybe I have made a couple of mistakes quoting the law. None of them have a great relevance on the OP, by the way.
No, only those which are false. I want people to have the correct information in front of them. If I say someone is wrong about something, I point out which statement(s) and then provide facts and links so they can see them for themself. I'm not always right.


As to FFL's existing before 1968, you can trust Wikipedia or someone that worked in a licensed shop AND the ATF. It may nit have been called a Type 01 before 1968, but there were licensed gun dealers, the ATF managed them and they had bound books. Know who Wikipedia really is? I do.
Read my last post again. I acknowledged that certain FFLs existed prior to the GCA of 1968 by the often forgotten about FFA of 1938. The FFA got changed with the GCA of 1968 and that's how it's most widely known as now. Same with the GCA of 1968 getting perverted with a bunch of other laws.

Yes I know "who" Wikipedia is and I rarely use them as a source. I only did this time because I had to leave for work and that was the first hit on the search engine.

[BubbaJon]

Enough info in those past few posts to make my head reel. Kudos to you guys that have to follow that letter of the law.
Now - a post was made that implied for "hobby"/occasional sales is ok for selling cast boolits. Can we get a straight answer on whether you can sell cast boolits if it isn't your full-time or even part-time job? I have several folks that would seriously like to buy a couple hunnerd cast boolits from me and it'd be nice to offset some of my costs by doing so.

[JonB_in_Glencoe]

Can we get a straight answer on whether you can sell cast boolits if it isn't your full-time or even part-time job?
I believe there isn't a straight answer, because the the 68 law prohibited that activity and the 86 law kind of relaxed it. I posted my interpretation/question in post #32 (see link) primarily in response to your post with 4 or 5 funny questions.
http://castboolits.gunloads.com/showthread.php?206488-At-what-point-do-you-need-an-FFL&p=2307533&viewfull=1#post2307533
To answer my own question(from the link), as I see it,
and I may be wrong here, BUT....
My simple rationalization has to to with intent ...and I use the comparison of a garage sale verses a gunshow.

Garage sale - you cast a bunch of boolits for yourself, sometime at a later date, you deside that you have too many, so you sell some...just like the stuff you'd sell at a garage sale.

Gunshow - you cast boolits specifically to sell there...or take orders from the people there, much like taking orders from a friend or neighbor. When I read that sentence with my Judge glasses on, it sure does sound like a business to me.

Now if you were to rent a table at a gunshow only once a year and sold items (including cast boolits) much like you would at a garage sale, I think you might be OK...but you are more likely to end up in front of a Judge, just because such an event tends to draw the attention of law enforcement ...and if that happens, I hope the Judge thinks like I do. BUT, most gunshow vendors sell at many shows per year and make money doing so...So that is the challenge to convince the Judge that you are NOT doing that.


conclusion:
The big thing is the definition of "business". What is the Judge going to think of your defense/explanation of your activity in selling/bartering of boolits.

[mikebrittain]

I talked sincerely with my area BATF agent today. I was applying for a license for legal safety purposes. She first told me that I would need to located in an area zoned for manufacturing. I told her that I did not want to do that because I did not want to be in business and I had a controlled environment in my home that is set up perfectly. I told her that I only wanted to reload for some guys at the range where I shoot. She asked me if I intended to make a "profit". I said, well I only want to charge for my labor. She said that I was clearly in the "Grey Area". I told her that we would pitch in to buy the primers and powder in bulk. She told me if I only wanted to reload for a small group just tell them you will only load their brass and I would be fine. We did also discuss hoarding large amounts of primers and powder. I live in Florida and we can keep up to 25 pounds of powder in a single family home. I have not seen any restrictions on primers here, but I did notice it to be the item of concern in other states. I'm going to work in the low end of the grey area and buy in bulk to save on hazmat fees. Any way you look at it there will be some sort of risk involved. That's life!

[Victor N TN]

"At what point do you need an FFL?"

Before you manufacture/sell your first bullet/round of ammunition.


That's why we changed from type 03 to type 06.