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FAQ 10. At what point should I obtain a Federal firearms license (FFL)?

Federal law requires a Federal firearms license if you are engaged in the business as a firearms dealer, manufacturer or importer. A person is engaged in those businesses, as it applies to each license type, as follows:

1. Manufacturer of firearms -- a person who devotes time, attention, and labor to manufacturing firearms as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the firearms manufactured (18 U.S.C. § 921(a)(21)(A));

2. Manufacturer of ammunition -- a person who devotes time, attention, and labor to manufacturing ammunition as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the ammunition manufactured (18 U.S.C. § 921(a)(21)(B));

3. Dealer in firearms -- a person who devotes 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, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms (18 U.S.C. § 921(a)(21)(C));

4. Dealer in firearms (gunsmith) -- a person who devotes time, attention, and labor to engaging in such activity as a regular course of trade or business with the principal objective of livelihood and profit, but such term shall not include a person who makes
occasional repairs of firearms, or who occasionally fits special barrels, stocks, or trigger mechanisms to firearms (18 U.S.C. § 21(a)(21)(D));

5. Dealer in firearms (pawnbroker) -- a person whose business or occupation includes the taking or receiving, by way of pledge or pawn, of any firearm as security for the payment or repayment of money (18 U.S.C. § 921(a)(12));

6. Importer of firearms -- a person who devotes time, attention, and labor to importing firearms as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the firearms imported (18 U.S.C. § 921(a)(21)(E));

7. Importer of ammunition -- a person who devotes time, attention, and labor to importing ammunition as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the ammunition imported (18 U.S.C. § 921(a)(21)(F)).

The term “principal objective of livelihood and profit ” is further defined as the intent underlying the sale or disposition of firearms as predominantly one of obtaining livelihood and pecuniary gain, as opposed to other intents such as
improving or liquidating a personal firearms collection: Provided, that proof of profit shall not be required as to a person who engages in the regular and repetitive purchase and disposition of firearms for criminal purposes or terrorism.

Note that there is no particular minimum number of firearms that must be sold, manufactured, or imported specified by law to be “engaged in the business.” Whether a person has been engaged in the business of dealing, manufacturing, or importing firearms, is made on a case -by-case basis. Considerations include, but are not limited to: the quantity of firearms sold, manufactured, or imported; the frequency of transactions over a period of time; the intent of the person in acquiring and disposing of firearms; and any representations made to the buyer regarding the person’s ability and willingness to obtain or transfer firearms.

We recommend that you contact your local ATF office (http://www.atf.gov/field/index.html) to evaluate the facts and
circumstances of your particular case. Information on how to become a Federal firearms licensee is available at:
http://www.atf.gov/firearms/how-to/become-an-ffl.html.

FAQ 11. Do I need a Federal firearms license to make a firearm for my own personal use, provided it is not being made for resale?

Firearms may be lawfully made by persons who do not hold a manufacturer’s license under the GCA provided they are not for sale or distribution and the maker is not prohibited from receiving or possessing firearms. However, a person is prohibited from
assembling a non-sporting semi automatic rifle or shotgun from 10 or more imported parts, as set forth in regulations in 27
CFR 478.39.

In addition, the making of an NFA firearm requires a tax payment and advance approval by ATF. An application to make a machinegun will not be approved unless documentation is submitted showing that the firearm is being made for the official use of a Federal, State or local government agency ( 18 U.S.C. § 922(o),(r); 26 U.S.C. § 5822; 27 CFR §§ 478.39, 479.62, and 479.105).

Additionally, although markings are not required on firearms manufactured for personal use (excluding NFA firearms), owners are recommended to conspicuously place or engrave a serial number and/ or other marks of identification to aid in investigation or recovery by State or local law enforcement officials in the event of a theft or loss of the privately owned firearm.

cyphur wrote:In addition, in reading the law, if you are a dealer, and you buy a firearm, then modify it before sale, you absolutely are "manufacturing" if you are improving on the firearm. It appears this changes that requirement to only cases where drilling, cutting or machining is required to complete said modification. This should be a huge help for dealers who wish to customize things like AR-15s, rifles with optics packages, etc.