Is it legal for someone to buy lower recievers from an FFL in thier name, and upper reciever kits off the internet, put the rifles together and sell them for a profit? Isn't it the same as selling one of your own rifles? I mean there would be a bill of sell with both parties signatures and the serial number of the rifle.

I 'ALMOST' know forms, I am SURE someone else can answer with 110% accuracy...

I 'BELIEVE' you nedd to file a form for a lisc to manufacture FIRST...

THEN register the made firearms...

Since when do private sales require any documentation?  (not sarcastic) i'm really asking the question.

Sure you can do it.
The IRS may want to know about it but you aren't manufacturing a firearm.  The lower is a firearm.  If you were to purchase 80% lowers and complete them into firearms and then sell them you're manufacturing firearms.

Could you do it? Yes
Would it be illegal? Yes

I've read elsewhere the ATF has rules that define a manufacturer.

Actually, I don't think you would be concidered a manufacturer but instead an unlicensed firearms dealer.

The "for a profit" part is what will get you in trouble.  Private party sales are OK as long as you are not "engaging in the business" of buying/ selling firearms.  If you "make a profit" you are in the business, and would therefore need an FFL (buy/sell, not manufacturer's license) of your own to continue.  This is a gray area, subject to interpretation, and everyone will have a different opinion, but you'd have a hard time proving you're not "in the business" of buying/ selling firearms if you're making money doing it.  Therefore, you need an FFL, but not a manufacturer's license, since the lower is "the firearm," and you're not manufacturing it.

When I tried to buy an AR last year from Larry at LG Weaponry (Orange County, CA), he told us he could not sell us the bolt to go with the rifle. He buys DPMS lowers, assembles them, then sells them. He said that the ATF informed him he was therefore the "manufacturer". So to stay away from this, he couldn't sell us the bolt, period. Not later, not in a different transaction, not at all.

Chris

It sounds more like LG is trying to avoid the FET, Fed Excise Tax, on selling complete weapons.  This is a tax thing, not an ATF thing.  Still has pretty severe consequences.  

Either way, if the lower has a serial number on it when he buys it, he's not the "manufacturer" for ATF's purposes.

Technically, if you then buy a bolt to "complete" the weapon and then resell it later, you owe FET on the completed rifle.  It would be hard to track and very small potatoes for the tax weenies, but that never stopped them before.

Norm

If you buy a stripped lower on which no FET has been paid, and build it into a complete rifle for sale, the ATF considers you a manufacturer, and requires you to have a type 07 FFL and pay the FET.

If you buy lowers on which the FET was paid (usually complete lowers...), and assemble them into a complete rifle for sale, you're just acting as a dealer and only need a type 01 FFL.

I don't know how active ATF is in enforcing this, but it's in their published guidelines.

It's also perfectly OK to sell person firearms for a profit without a license, provided you're not doing so as a business.  ATF generally considers that if you've had a firearm for a year or more, that's proof you didn't acquire the firearm for the sole purpose of resale, and you're safe to sell it.  Anything less than that, and you're in the gray area.

Iknow that firearms are not generally a good investment but humor me for a moment. People who collect firearms and who trade/sell those firearms intend to make a profit and occasionally do make a profit. Yet they are not dealers; they are collectors who made a good investment.

Frankly I am very unclear what consitutes a dealer exactly. I know that the BATF busted a guy near me for selling guns without a license but I was never clear exactly what the criterion were. Perhaps it varies from case to case. I mean I could probably listen to the evidence and decide if the guy was really making a business out of selling firearms or not. Perhaps thats what the judges do. For me it would have to do with volume, length of time that you kept the firearm before selling it, whether you used it before selling it, whether you sold to anybody of just friends,.....A lot of things I suppose but I could decide on a case by case basis.

Judges on the other hand are suppose to establish criterion and them apply those criterion evenly.

Frankly, I do not know what those criterion are.

Certainly you are entitled to sell your property without regard to what you paid for it.

What I do know is that if you are also dealing drugs and you sell large numbers of firearms which are current production and unused to other drugs dealers repeatedly, the BATF will be paying you a visit and will probably try to make the case that you are trafficing illegally.

I do know that if you sell your friend your slightly used AR15 at a little more than your cost and go buy you another, you probably will never hear from anybody about it.

perhaps its a matter of the volume of business more than anything else.


PigPen

Pigpen



While I don't know if BATF has issued a ruling or advisory opinion on guidelines for determining what factors constitute dealing without a license, if they have, those determinations will have great weight in federal court.  That is, if BATF has ruled selling more than 18 guns per year constitutes dealing without a license, it will most likely be upheld by a federal court.

OTOH, if they (BATF) haven't issued such a ruling, the question of whether your action constitutes dealing without a license will be answered by a jury on the basis of the same questions as you though relevant (duration of ownership, volume of sales, use before the sale, etc.).

This is confusing to me. I've asked several people in the past months if it is legal for a private citizen to build an AR15,"postban"type.I get answers both yes and no.I would like to build one up myself but want to stay legal.You guys seem to know. Maybe you could ease my paranoia.Thanks.

I would have no reservations about assembling parts which are legal to own. People do that every day. As some one above points out, the serially numbered receiver is the firearm. You can add/change parts connected to that receiver (firearm) so long as you do not add more than two of the evil features listed in the assault weapons ban of 1994 to a receiver that was not *assembled* into a complete rifle before that date. In fact there is a forum on this board dedicated to doing just that (See "Building your own")

If you want to start from scratch with a block of metal, you can do that also. You are allowed to manufacture one firearm (receiver) per year for your own use.

Then if you wanted to get rid of it (didn't like it, needed your money back, just any reason)with the usual caveats associated with the liabilities in the manufacture of firearms, you could sell it.

Not sure I understand your question. I hope this is the answer.

PigPen

Pigpen,thanks for the info.Only other concern is I hear here is the tax issue.If I were to buy a lower reciever through a FFL dealer and the rest of componets myself,would I have to pay an exise tax? Rifle would be for myself not resale.Thanks

jb223:  No tax is necessary if you're making it for personal use and not for resale.

The only applicable tax is the usual sales tax just like on everything else in what ever state you buy the components.

Buying a receiver of course is treated the same as buying a "firearm". You need a local FFL to do a mail order transaction on a receiver and they usually charge a fee for handling the paperwork. In my area (CSA), thats usually $15 - $25 but it is offset by the fact that buying mailorder out of state, the sales tax is not collected. The other components do not require an FFL and can be ordered straight to your house.

If I wanted an AR15 receiver, I would check with Gunsmoke who usually advertises on this board under equipment for sale. They used to list PWA receivers for $110.00 and I don't recall but it might have gone a little less at one time. PWA is an excellent receiver. They also have uppers to match and you might want to check out their other components.

If you are not experienced at this, you are also going to need a couple of tools and probably some advice. Why don't you lurk over on the "Build your own" forum on this board for awhile. You'll pick up a lot of useful information there.

But no exorbitant tax and no legal issue involved with what you want to do.

Good Luck

Pigpen

Thanks again guys.This is a great forum.Lots of different view points.It seems like everyday we got more new gun laws pushed at us.I will head over to building section.