A dealer may sell an upper and a lower as individual components provided they are sold in exactly the same configuration as they were received from the manufacturer or distributor. The dealer may not assemble the two halves into a complete rifle and to be totally within the law should not let the customer assemble the two halves on his premises.

An individual is allowed to assemble a rifle for his own personal use without paying a manufacturing excise tax. He may not do so to resell it and if it is ever sold as a complete rifle he owes the tax. As long as it is kept by the individual consumer who purchased the two halves there is no tax due. In any event, the dealer is not responsible for or held accountable in any way for the tax, again provided he has never mated the two halves into a complete gun while it was in his possession.

This is the answer given by the ATF so before you quote anything or claim it isn't correct be aware it's the one the final authority gives. I got this by calling the ATF counsel line and talking to them. The guy I talked to pulled the regs and double checked them before calling me back with the answer. I am fully confident as these are the guys we work with on audits, traces and other regulatory matters and we know them well.

God help him if he wants to make sure they fit.

Not trying to flame you, but if you find a dealer that falls for that one, give me a call and I'll be there to buy them by the dozens!

Could you please post a source for this dubious ruling?

The kicker is that he cannot rake a rifle he (the dealer) purchased complete, split it in two, and sell it as parts to avoid the excise tax.

The two pieces must have been bought, and recieved by the dealer, as separate pieces.

I believe he means the 11% exise tax, If that is the case, The dealer would still have to pay the tax on the lower, would he not?

Actually, as explained by the ATF, if parts are received unassembled they must remain that way until sold to avoid any tax liability. If a complete rifle is purchased from manufacturer or distributor then the tax has already been paid by the manufacturer prior to delivery to the distributor or dealer. The dealer could separate the two halves and sell them separately with no liability or consequences.

ldb,

I don't doubt what you were told, and it does seem to make some sense, however, never believe what ATFE tells you over the phone. ATFE even admits that information given over the phone is not necessarily correct at all times/all instances, which is why they require any specific questions be put in writing and a written response will eventually be provided.

It's kinda like the IRS. If you have a question, call and ask us. If we are wrong, oh, well! Pay your taxes & penalties and next time, put it in writing.

In most cases I would agree with you however I know the agent I talked to well enough to know he did pull the regs and research it for me prior to answering me. I have full confidence in his answer. If it were just a call to an agent I didn't know I would fully agree with you.

I was told an individual can assemble one rifle a year for his own use without having to pay the excise tax. More than one per year makes it a business. This was second hand from a dealer from a ATF agent.
[coffee]

I dont think so. That sounds wrong.

I agree with Troy, you can build all the rifles you want, you just can't be building them for the purpose of selling them, therefore, if you do sell them, you are considered to be "engageing in the business"

That is correct under the current statutes. You can build as many different or all the same configuration as you want as long as they are for your personal use and possession. If you sell any you are then a manufacturer and owe the tax. I didn't specifically ask about building and giving them away however and the answer was build/sell. Giving them away would still qualify as transferring a complete rifle so I'd presume that to also require payment of the excise tax. I'll have to inquire on that one the next time I talk to the ATF.

Oh, boy.
I have done 2 of my rifles this way, one in 2002 and one in 2003.
Bought lower receiver from dealer in town, ordered preferred upper from Bushmaster.  
Not selling these rifles, or at least have no intention to, but now I'm starting to wonder if I should keep doing this.

Of course, now that I think of it, it should be ok, right?  I mean, they even sell nearly complete AR kits and tell you to order the stripped lower from any old sack with a FFA.

There is no reason whatsoever you shouldn't do as many as you want other than the no resale provision on complete rifles. You could tie up a lot of money in completed guns that way which you couldn't sell. Then again, you could always separate them to their original parts and sell the parts separately.