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10/20/2017 1:01:18 AM
9/22/2017 12:11:25 AM
Posted: 7/25/2005 1:10:03 PM EDT
Tried the search function on this one first with no luck...

While at the gun store this afternoon, the guy behind the counter said something that got me wondering.

He said ATF regulations allow me to build ONE rifle. Anymore than ONE and I would need a Manufacturers Certificate to do so. He went on about all his guns have an 11% Federal Excise Tax on them and to buy lowers and parts kits was Tax Avoidance and dealt with accordingly.

I smiled as he went on and asked him just what was taxed. He said "the whole rifle". Hmmmm..... I asked him about complete barreled uppers and he said 'included'. I asked would I pay Excise Tax on a SECOND upper and he said no.

My understanding was as long as I purchased stripped lowers FOR MY USE and didn't plan on reselling them, then everything was ok. Furthermore, the only part that could even remotely be considered taxable would be the stripped lower and I doubt the .gov would be interested in 11% of $80 bucks.

Was this guy out in left field? Is there some weird rulings on the number you can build? Is this a Tax Avoidance Scheme as he put it and the Feds would/do pursue? Is there specific language that speaks to this?

Link Posted: 7/25/2005 1:57:27 PM EDT
I believe that the 11% tax is only due if you are building firearms for the sole intention of reselling.

I didn't have time to read this:

www.access.gpo.gov/nara/cfr/waisidx_03/27cfr53_03.html
Link Posted: 7/25/2005 1:58:20 PM EDT

As long as you don't build them for the purpose of resale, it's perfectly legal.
Link Posted: 7/25/2005 2:59:49 PM EDT
Link Posted: 7/25/2005 6:43:18 PM EDT
Thank-You everyone. I figured he was full of "it", but wanted to check the hive.

Guess I'll go and order those two new stripped lowers now, eh?.
Link Posted: 8/3/2005 5:40:09 PM EDT
Everybody is correct - FET is only for licensed manufacturers "in the business" of selling their product for profit. This is taxable just like any other manufactured product, and justification is probably the interstate commerce clause in the Constitution.

However, none of the above means that
a) You are limited in the number of guns you build for personal use
b) You are prohibited from selling any gun you make, as long as you aren't doing it as a means of generating substantial income.
c) You can't make any kind of profit when selling a gun you made for personal use. For example, suppose you buy a bunch of parts and make an AR, then some kind of ban is enacted, making your gun more valuable. There is nothing requiring you to sell it at the old value rather than the current value as a "pre-ban" gun.

You would only have a problem if you regularly made guns and sold them, and the sales generated "significant" revenue to you above what an occasional sale would bring. Note that this is exactly the same thing that would apply in selling any gun you own, or even certain other things, like cars.
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