I am currently only twenty years but have been researching building an AR15 for quite awhile and finally decided to have a complete lower receiver transfered to a local FFL dealer. One of their employees mistakingly told me I could pick it up and it would be considered a long gun rifle, but when it came time to fill out paperwork the ATF considered it a receiver that can still be built into a pistol or SBR so long story short I have to have a parent come pick it up for me. My question is can my step parent or someone like my cousin pick it up for me and "gift" it or would that still be considered a straw purchase? I have the 16" barrel and all the other parts, but having the FFL store install the barrel and upper for me to make it a rifle is still somehow illegal. I am located in North Carolina and my immediate family lives 5+ hours away, I am very impatient after saving for awhile to build this thing only to get stuck in this bind. Any help would be much appreciated. Thanks

You're pretty much stuck. You can see if they will hold it intil you're 21 or see if you can find somebody to buy if from you and have it transferred to them. Any other work around a would be a straw purchase.

Take the buffer tube and a stock for the ffl to install on the lower and then he can transfer it as a rifle.  It can be hand tight, as long as the stock is on there its a rifle.

Eta:  it has nothing to do with being an sbr, if the ffl told you that he's full of shit.  Nobody in the history of ever has ever made an sbr without the atfs blessing.

It's a complete lower already. That's the only reason I had it transferred or else I would have just bought a cheap complete rifle and taken the lower from it. It already has a buffer tube/stock but doesn't have a barrel so is still considered a receiver and illegal for someone under 21 to buy. Basically just wondering if my step mom could get it from the FFL dealer for me since she will be in town this weekend or if it would have to be my actual mom/dad/brother etc.

If it's a complete lower, build the upper, take it to the shop and install it "instant long gun".

Sorry, it doesn't work that way.

That would make the FFL a manufacurer, rather than just a seller, of firearms. This requires a Type 07 FFL, rather than the far more common Type 01 FFL.

Is the FFL a Type 01 or Type 07?

ETA: After re-reading the OP, and the shop already refusing to do this, I believe the shop is only a Type 01 FFL.

If its a complete lower with a stock then its a rifle receiver.

You're correct they're type 01, but if I found another FFL type 07 shop nearby would shop #1 be able to ship it to shop #2 with the manufacture license to put together the upper and allow me to get the rifle assembled? Still curious about the step mom/cousin being able to pick up the receiver as well.

Yes an 07 could do it but you would be subject to the complete firearm exercise tax. As far as mom or cousin is a no go because they are purchasing it for a prohibited person because of your age. Another option is send it back pay the restocking fee and consider this a lesson learned until you are 21.

 
That is incorrect. In order to be transfered as a rifle it needs to be a complete rifle with barreled action. Until then it is just a "other, receiver" and the transferee has to be 21 or older.

I researched it further and a complete lower is considered "other" by the atf.  Sorry op your best bet is having the ffl sell it for you or send it back.

The 07 might be the best bet if they're willing to work with you.

As has already been discussed, this is not true. For a firearm to be considered anything but an "other" or "lower" it MUST have a barreled action. An upperless AR15 lower, even if it has a non-removable stock (Cavarms/GWACS) is still considered an other/lower., even though the end product could only be built into a long gun.

Not to sound rude but I always find these type of posts concerning for a few reasons. One the person asking it claims to be knowledgeable in building ar15s but somehow decided to buy a lower and somehow got it blocked at the FFL and wants to know how to circumvent laws in place. The person has 1 posts only and rarely comes back. It makes me wonder if there's someone making posts just to see how many people might try something illegal.

OP, apologies if you are legit but this sounds like a very poor research on your part. Yes you have to be 21 in California to buy a pistol and as far as I know certain types of rifles. It would be far better to go on your hometown forum and ask about what you can do. No I would not ask a family member to buy it in your place since that is illegal. I would instead go back to the FFL, demand a full difference refund of however much the restocking fee is from where you bought it. I would say that the person informed you that it could be transferred prior to sending the FFL info to the manufacturer that you bought it from and now that you are attempting to buy it they are saying something different so they should refund whatever it difference for your troubles since you had no knowledge of this prior and was transferring with the assumption that everything would be transferable.

Have the FFL return the money or sell the receiver and just buy a rifle of the manufacturer you prefer.  That is, if you can buy a rifle under 21 in your state.  Change the parts within the law as long as your heart is content.  It will costs more, so what.  Or he can have the FFL hold the receiver until his 21st birthday.  Peace!

EDIT-  or both.  Thank the FFL for knowing the law and keeping you legal

It's not illegal for OP to purchase a stripped or complete lower without upper.  It's illegal for the FFL to transfer it to him.  Federal law imposes a restriction on the FFL, not the purchaser.

Perfectly legal to acquire it in a private transaction, same as a handgun for 18-20 year olds, unless state law says otherwise.

Absolutely not. What you describe is a classic example of a "straw sale". By doing so both you and the family member are committing a Federal felony.

This is what I would do. OP has to be sure he owns and gives all the parts to the FFL. The FFL cannot use any parts from his own inventory, thus adding value. ATF has consistently held when parts are customer supplied, it is gunsmithing, not manufacturing.

ATF 2008 FAQ:

5. A company receives firearm frames from individual customers, attaches stocks and barrels, and returns the firearms to the customers for the customers' personal use.

The operations performed on the firearms were not for the purpose of sale or distribution. The company should be licensed as a dealer or gunsmith, not as a manufacturer of firearms.

6. A company acquires one receiver, assembles one firearm, and sells the firearm.

The company is not manufacturing firearms as a regular course of trade or business and is not engaged in the business of manufacturing firearms. This company does not need to be licensed as a manufacturer.

ATF 2010-10:

A dealer is “engaged in the business” of gunsmithing, as defined in 18 U.S.C. 921(a)(21)(D) and 27 CFR
478.11, when he/she receives firearms (frames, receivers, or otherwise) provided by a customer for the
purpose of repairing, modifying, embellishing, refurbishing, or installing parts in or on those
firearms. Once the work is completed, the gunsmith returns the firearms, and charges the customer for
labor and parts. As with an individual customer, a licensed dealer-gunsmith may receive firearms
(properly identified with a serial number and other information required by 27 CFR 478.92) and conduct
gunsmithing services for a customer who is a licensed importer or manufacturer. A dealer-gunsmith is
not “engaged in the business” of manufacturing firearms because the firearms being produced are not
owned by the dealer-gunsmith, and he/she does not sell or distribute the firearms manufactured. Once the
work is completed, the dealer-gunsmith returns the firearms to the importer or manufacturer upon
completion of the manufacturing processes, and does not sell or distribute them to any person outside the
manufacturing process. Under these circumstances, the licensed dealer-gunsmith is not “engaged in the
business” of manufacturing firearms requiring a manufacturer’s license.

In contrast, a dealer-gunsmith may make or acquire his/her own firearms, and repair, modify, embellish,
refurbish, or install parts in or on those firearms. If the dealer-gunsmith then sells or distributes those
firearms for livelihood and profit, the dealer-gunsmith is engaged in his/her own business of
manufacturing firearms. A person engaged in the business of manufacturing firearms for sale or
distribution is required to be licensed as a manufacturer, identify/mark all firearms manufactured,
maintain permanent records of manufacture, submit annual manufacturing reports, and pay any taxes
imposed on firearm manufacturers. A licensed dealer-gunsmith who becomes licensed as a manufacturer
must also segregate all firearms manufactured for that business separately from firearms for which
gunsmithing services are being performed.

Perhaps I am not reading this correctly. As I read it, it is gunsmithing if the receiver/frame is customer supplied, correct? Therefore, wouldn't the receiver need to be first transferred to the customer BEFORE any work was done? Otherwise, the receiver/frame is not customer supplied?

It is customer supplied, unless I am not reading the OP correctly:

I am currently only twenty years but have been researching building an AR15 for quite awhile and finally decided to have a complete lower receiver transfered to a local FFL dealer.

So local FFL did not buy the lower, OP bought it and he had it sent to the local FFL, thus it is "customer supplied",  presumably for gunsmithing. This thus meets 2010-10 - provided by a customer for the purpose of repairing, modifying, embellishing, refurbishing, or installing parts in or on those  firearms.

The argument could be made that the lower was provided by the person who shipped it to the buyers dealer.

The bottom line is who owned the receiver when it was shipped. From what I read, it was the OP.

This is a common occurance in gunsmithing and has been going on for decades. Especially for competition guns. Buy a brand new STI or whatever, have it drop shipped to 1911 specialist for trigger jobs and competition parts. Lots of gunsmiths operate without a store front, and only accept shipments from other FFLs.

I can see both sides of the argument...

One: the customer did order the lower, BUT the lower (per the OP) was not supplied "for the purpose of repairing, etc" but ordered simply for transfer. Also, it could be argued that, though the customer did order the reciever, since it was never transferred to the customer, it is never in his ownership/possession to supply the FFL for gunsmithing services.

Or

Two: since the customer did "order" the lower, he is indeed "supplying" the lower.

What type of FFL did the gunsmith have?

My understanding (and my comments are based on) is OP purchased a lower from some other place, had it shipped to an FFL. He owns, he has a receipt proving he purchased it. The local shop expended zero funds to purchase the lower. If the customer ordered it from local FFL, my comments do not apply.

The gunsmiths I use for 1911 & Glock work are all 01. The ones I use for HK work are 01, 1 is 07 (he makes silencers). I do ARs (and now Glocks) and other stuff, I am 07 but I have never MFG a gun for a customer (I only make NFA stuff only) everything I do Title I is gunsmithing.

Also, do not forget this part of the ATF Manufacturing FAQ:

6. A company acquires one receiver, assembles one firearm, and sells the firearm.

The company is not manufacturing firearms as a regular course of trade or business and is not engaged in the business of manufacturing firearms. This company does not need to be licensed as a manufacturer.

This is the escape clause for OP. Even if the FFL bought every single part, assembled it and sold it to OP, it is still legal to do with a type 01 as long as it does not become "regular course of trade or business."

Would they still not be required to pay FAET?
And how does an 01 do that?

But in your example the gunsmith is only doing a trigger job, not creating another type of firearm.

Since 2005 there has been a 50 gun or less exemption. So even MFGs who do less than 50 do not pay FAET.

As of October 1, 2005, any pistol, revolver, or firearm that was manufactured, produced or imported by a person who manufactures, produces or imports less than an aggregate of 50 such articles during the calendar year is now exempt from the tax.

http://www.ttb.gov/firearms/faet-faqs.shtml

"and competition parts" would include slide, ported BBL, sights, funnel, etc.

Since the 01 is manufacturing, wouldn't he need to pay ITAR?

He is making, not manufacturing.

Either way, Only if he is engaged in the business is ITAR applicable. 1 is not engaged in the business.

Anyone who "picks it up for you" would be committing a straw transfer, as they would not be the "actual purchaser".  Their eligibility to purchase a firearm has no bearing on the straw status.

No, there's a letter floating around from DoS where they state that mere "assembly" is not "manufacturing" as they define it.  ATF defines manufacturing differently using tax law because TTB wants to ensure that FAET is collected and remitted.

That said, the OP should have researched all of this before proceeding.  The best he can do is either have the lower transferred to an 07 who can finish it, or wait until he's 21 to pick it up and expect to pay storage fees on the gun if that is more than a few months away.

I agree with RenegadeX's opinion. I would try that route before going to an 07 and additional transfer fees.

I think the problem with this is that even though OP payed for the receiver, it hasn't actually been transferred to him through the FFL to purchaser process (4473, NICS, etc.), so it's not really his. It's still the originating FFLs (assuming seller is an FFL) until the receiving FFL facilitates the legal transfer to the purchaser. It's kind of a catch-22. OP can't legally receive it from the FFL to give it back for assembly, but if he could he wouldn't need to give it back for assembly. OP is lucky the receiving FFL doesn't just ship it back and say that it's an issue between the original seller and OP.

If you paid for it and have a receipt it is legally yours. No different than a minor inheriting a firearm, it is theirs even if they cannot possess it. 4473/NICS does not determine ownership, only lawful possession.

As I pointed out though, it does not matter as ATF allows 01s to make a firearm if it is not part of regular business.

I don't think that is actually true. Bear with me for a minute though...

So if you think of sales in legal terms as contracts (even just very basic ones), there are several different things that can happen. Basic sales such as retail where you take an item to a cashier, pay, then they give you the item and a receipt (kind of like a contract you didn't read first, but the terms are likely available upon request). Then there are more complicated ones like cars where you generally negotiate the terms and get to sit down and read a contract and sign it. Then there are firearms.

For the firearms sales/contracts (specifically when dealing with an FFL holder), you have to follow the federal and your state laws.  And as you mention, there are two parts -- the sale, and the possession. In my experience, when you walk into a gun store and go through the purchase process you usually go through verifying that the possession is legal first, and follow with the sale. So fill out the 4473, run a NICS or alternate background check (or verify CPL, etc.). That way if for some reason the purchaser doesn't meet the possession requirements you don't have to undo the sale portion. In state purchases are generally pretty easy. But the way the laws are worded for out of state purchases and transfer of possession is tricky because of the way the wording basically makes all unlicensed out of state firearms purchases/transfers illegal, but then makes a some exceptions to those rules (like for shotguns and rifles).


The rules in USC 18 § 922 spell this out. I'll paraphrase the relevant part below to make it easier to read.


"(b) It shall be unlawful for any licensed dealer to sell or deliver—
    (3) any firearm to any person who the licensee knows or has reasonable cause to believe does not reside in the State in which the licensee’s place of business is located"

There is an exception to the above that rifles and shotguns can be sold to an out of state person as long as they meet in person.

So if a license dealer can't even sell a firearm to someone from out of state, how can people "buy" firearms over the internet? This is where it gets back into the contracts thing again, and you generally can't have contracts that contradict law. So the contract is usually that FFLs (or people) that sell firearms over the internet (or phone or whatever...any out of state sale) stipulate that the firearm must be sent to an FFL in the "purchaser's" state. That receiving FFL usually charges some sort of fee for this service. So what you as the "buyer" have really done is contracted the in state FFL to purchase the firearm from out of state (using the money of the "buyer") and then have the firearm sold/transferred in state. The fee is of course to cover administrative costs such as the paperwork and bookkeeping, as well as the lost profit from not selling the firearm to the purchase from their own inventory.




Minors inheriting firearms are usually different as well. The firearms would normally be held in trust until the minor is of the proper age to own the firearms. Until then the trust would own the firearms with the minor as beneficiary.




*Not a lawyer. Not legal advice. Just my interpretation from reading the laws.

Wrong as the local FFL did not buy anything. Folks transfer guns to me all the time. I did not buy them, they did. If I did buy them, I would have to report it on my income tax, it would be subject to inventory tax. and would have to collect sales tax. I do none of these things, and the IRS and State of Texas agrees with me I did not buy the gun.

One more time though.

As I pointed out though, it does not matter as ATF allows 01s to make a firearm if it is not part of regular business.

No minimum age to own or possess a firearm in Texas.

Well, the out of state FFL (or unlicensed entity) can't legally sell the firearm to the unlicensed "buyer" from out of state, so I would argue that the seller sold it (and delivered it) to the FFL since they can't legally sell it to the "buyer."  In state FFL (transferred to) owns the firearm.




That's fine, but that just reinforces that the FFL owns the firearm. If the FFL didn't own it, then it would be gunsmithing.




That's fine for Texas. But it may be different other places. Can't just make a blanket statement that minors own inherited firearms when that may not be the case everywhere.

No, this had nothing to do with the OP or his parts. In this example it was presumed the FFL bought all the parts directly and it is not MFG to add an upper.

Really? The in-state FFL OWNS the firearm? So since he owns it, he is free to sell it to anyone he wants? At any price he wants? All those guns in my safe that are transfers, I own them and can sell them whoever I want? Those folks who xferred them in are going to be surpised to see them for sale on GunBroker!

On top of that, just about every FFL who has done a xfer is also cheating on the taxes, as they do not report it as a inventory purchase. Wow, amazing you know this and 50,000 FFLS + State TAX agencies + IRS did not know this.

At this point it is obvious you have no clue what you are talking about, no offense intended.

I think this discussion got a little derailed for a moment.




This is the reason I initially started responding to this thread. I believe because the law states that an FFL can't sell a firearm to someone unlicensed out of state, that even though OP may have paid for the lower in question and may have a receipt for it, he doesn't actually own it since it couldn't legally be sold to him by the out of state FFL. Either the sending FFL or receiving FFL still owns the firearm. That is the point I was making.




The point is that the OP can't receive the lower in the state it's in. OP apparently does have upper parts (complete upper?) that he could provide to the FFL to complete a rifle, but the FFL said they can't do it. You've provided good evidence that they can, but OP still needs to be able to convince them of that.

That's not what I said. I did mention that when an FFL offers to perform a transfer of a firearm for someone (for money) that they have essentially formed a contract. If the FFL then transfers/sells the firearm in question to someone else, they'd be breaching that contract.

Stop right there as that is not correct.

Again, no offense intended, but you do not know how this works.

You wrote:

In state FFL (transferred to) owns the firearm.


If an FFL owns a firearm, he is free to dispose of it as he wishes.  Just like you can dispose of the firearms you own.

nm...

Just an aside, if I receive a firearm for transfer and it is not claimed within 5 years, it is considered abandoned by Virginia law.  Then I put it on Gunbroker.

You're right, I don't actually know (and I'm not taking offense, just trying to learn), but I quoted the actual United States Code that says that an FFL can't sell a firearm to someone unlicensed if that unlicensed person is not in a face to face transaction with the FFL and if that firearm is not a rifle or a shotgun.

We do know there is a mechanism in place to make this happen since it happens all the time. What I'm curious about is the underlying mechanics of how it technically happens. If an out of state FFL can't sell directly to the out of state buyer, then the mechanism is to go through an intermediary (in state FFL). Can the in state FFL sell the firearm to the buyer if he doesn't actually own it? Semantics maybe...but possibly important ones (or not).





Sure, you could dispose of it as you wish. But by agreeing to perform the transfer for the buyer and then not performing the transfer, you'd be breaching your contract and likely end up in a lawsuit.