Armory Sponsor
Posted: 11/22/2010 3:12:26 PM EDT
|
Hi Guys.
I own a machine shop as a sole prop. I want to start up another business (sole prop, at least for starter) and get an 07FFL with the intention of making shotguns and doing gunsmithing. A lot of gunsmithing work turns up at the machine shop, so I'd like to keep those customers satisfied too. My question is will ATF be okay giving my new "kitchen table" a manufacturing FFL at the address of the machine shop ? The FFL's business entity wont have any manufacturing capabilities, but the shop should speak for itself. I see a strong advantage to keep the entities separate and really want to avoid the shop getting a FFL. Does anyone see an issue with getting an 07 in this situation ? |
|
Quoted:
Hi Guys. I own a machine shop as a sole prop. I want to start up another business (sole prop, at least for starter) and get an 07FFL with the intention of making shotguns and doing gunsmithing. A lot of gunsmithing work turns up at the machine shop, so I'd like to keep those customers satisfied too. My question is will ATF be okay giving my new "kitchen table" a manufacturing FFL at the address of the machine shop ? The FFL's business entity wont have any manufacturing capabilities, but the shop should speak for itself. I see a strong advantage to keep the entities separate and really want to avoid the shop getting a FFL. Does anyone see an issue with getting an 07 in this situation ? I am having a little trouble following what you are asking. But I think you are asking if a 07 has to have actual machinery, the answer is no. There are many things that require an 07 and no real machine tools, and LOTS of 07's that farm out their work to real machine shops and the full extent of their 'in-house manufacturing' is putting parts kits in a lower, or painting a gun. |
|
Quoted:
Quoted:
Hi Guys. I own a machine shop as a sole prop. I want to start up another business (sole prop, at least for starter) and get an 07FFL with the intention of making shotguns and doing gunsmithing. A lot of gunsmithing work turns up at the machine shop, so I'd like to keep those customers satisfied too. My question is will ATF be okay giving my new "kitchen table" a manufacturing FFL at the address of the machine shop ? The FFL's business entity wont have any manufacturing capabilities, but the shop should speak for itself. I see a strong advantage to keep the entities separate and really want to avoid the shop getting a FFL. Does anyone see an issue with getting an 07 in this situation ? I am having a little trouble following what you are asking. But I think you are asking if a 07 has to have actual machinery, the answer is no. There are many things that require an 07 and no real machine tools, and LOTS of 07's that farm out their work to real machine shops and the full extent of their 'in-house manufacturing' is putting parts kits in a lower, or painting a gun. Yeah, that's pretty much it. The 07 would not have any machinery. Thanks for making sense of my question :) |
|
Quoted:
Quoted:
Quoted:
Quoted:
.... A lot of gunsmithing work turns up at the machine shop... If you are currently doing ANY gunsmithing you better already possess an FFL. This. Yeah, I have to turn it away now which is why I want an FFL. Said it in the OP. That part I did get. Basically I read, "I am turning away work I could do if only I had the license". |
|
There are a lot of other expenses that go along with an 07.
You have to register and pay ITAR, that is $2250 a year. No matter if you export or manufacture anything or not. If you have a FFL07 license, you pay ITAR. And dont forget about FAET (excise tax) if you sell over 50 of your manufactured firearms in a year. It is 10% if I remember correctly and at number 51 you owe the tax on all 51 not starting at 51 to whatever number you finish at. It also does not matter when it was constructed, it is when it sells. So if you built 10 rifles a year and on year 6 you sold all 60, you would owe the tax on all 60 even though you only built 10 that year. http://www.ttb.gov/firearms/faet-faqs.shtml |
| It could be an issue. You might consider some kind of lease contract arrangement for space/machine time from your machine shop to your FFL entity even if your FFL is at the same location. ATF can ask you if your FFL business shares its location with any other business. They may ask what the other business does. You will need a clear distinction between your machine shop activities and FFL activities and where the money from each goes. If they think your machine shop is profiting directly from the manufacturing and gunsmithing rather than your FFL paying for leased equipment it could potentially be an issue. If you do want to consult with an attorney on this I recommend Mark Barnes and Associates out of Washington, DC. If you don't want to/can't afford it you are best to tell ATF exactly what you intend to do, document this all, so that if they have any issues with how you intend to operate they can deny you before you get started or you will have a defense if they change their minds later. |
Armory Sponsor
Win a FREE Membership!
Sign up for the ARFCOM weekly newsletter and be entered to win a free ARFCOM membership. One new winner* is announced every week!
You will receive an email every Friday morning featuring the latest chatter from the hottest topics, breaking news surrounding legislation, as well as exclusive deals only available to ARFCOM email subscribers.