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Posted: 8/29/2004 4:24:24 PM EST
Does the FET have to be paid if you buy an LEO lower and build a complete rifle? The lower left the factory as a complete rifle, but was parted out by the dealer.
Link Posted: 8/29/2004 6:41:06 PM EST
If it left the factory as a complete rifle, the manuracturer has already paid the f.e.t.

Just my $.02
Link Posted: 8/29/2004 6:55:20 PM EST
FET is paid by FFL holders (dealers, manufacturers, etc)...

NOT by consumers...

You never have to worry about FET, other than the fact that if you build from a stripped lower & parts kit the Feds don't get any money...
Link Posted: 9/3/2004 1:32:18 PM EST
FET is made by any licensee "making" a firearm. For all practical purposes, this means a Class II FFL.

Ever wonder why gun shops don't buy stripped lowers and assemble their own guns to sell? Because they'd have to be at least a Class II and pay FET.

The FET is generally not a lot of money, it's either $11 or 11% of the value, I can't remember which - maybe someone out there can tell us for sure.

Finally, to your question. The big deal about LEO guns is (AWB aside) that FET is waived on these guns that are specifically for sale to government agencies, i.e., law enforcement. That's why it would still be illegal for a dealer to sell a LEO gun to a non-LEO customer - not because of the bayo lug, but because of the FET exemption.

That having been said, however, once a LEO gun leaves the dealer channel, it is just another gun (again, AWB aside) as far as the FET is concerned. So:

As things stand, you still wouldn't (technically) be able to buy a LEO Colt 6920 directly from, say, a Colt dealer. But you could buy one from and individual on Gunbroker or at a gun show with no problem.
Link Posted: 9/3/2004 5:05:21 PM EST

Originally Posted By Model_One:
FET is made by any licensee "making" a firearm. For all practical purposes, this means a Class II FFL.

Ever wonder why gun shops don't buy stripped lowers and assemble their own guns to sell? Because they'd have to be at least a Class II and pay FET.

The FET is generally not a lot of money, it's either $11 or 11% of the value, I can't remember which - maybe someone out there can tell us for sure.

Finally, to your question. The big deal about LEO guns is (AWB aside) that FET is waived on these guns that are specifically for sale to government agencies, i.e., law enforcement. That's why it would still be illegal for a dealer to sell a LEO gun to a non-LEO customer - not because of the bayo lug, but because of the FET exemption.

That having been said, however, once a LEO gun leaves the dealer channel, it is just another gun (again, AWB aside) as far as the FET is concerned. So:

As things stand, you still wouldn't (technically) be able to buy a LEO Colt 6920 directly from, say, a Colt dealer. But you could buy one from and individual on Gunbroker or at a gun show with no problem.



How would this affect my purchase of an LEO lower that came from a complete factory rifle?
Link Posted: 9/4/2004 6:44:31 PM EST

Originally Posted By Dave_A:

You never have to worry about FET, other than the fact that if you build from a stripped lower & parts kit the Feds don't get any money...



So, are you saying that If I purchase a stripped lower from a dealer. Then build a rifle with it. I would be responsible for the FET? I'm looking to pick up some stripped lowers and I guess I need to find out more about this.
Link Posted: 9/4/2004 7:09:36 PM EST
[Last Edit: 9/5/2004 8:14:52 AM EST by Lexington]

Originally Posted By Model_One:
Finally, to your question. The big deal about LEO guns is (AWB aside) that FET is waived on these guns that are specifically for sale to government agencies, i.e., law enforcement. That's why it would still be illegal for a dealer to sell a LEO gun to a non-LEO customer - not because of the bayo lug, but because of the FET exemption.

That having been said, however, once a LEO gun leaves the dealer channel, it is just another gun (again, AWB aside) as far as the FET is concerned. So:

As things stand, you still wouldn't (technically) be able to buy a LEO Colt 6920 directly from, say, a Colt dealer. But you could buy one from and individual on Gunbroker or at a gun show with no problem.



I think this is incorrect. The only way that LE departments get firearms FET exempt is to buy on a department purchase order and by showing tax exempt status. An individual officer can get a personal (and authorized on letterhead) LEO rifle from an "01 FFL" and the price is higher by at least 11% (the FET).

Federal Excise Tax is due when the firearm is sold by the manufacturer "07 FFL". So the tax is due from Colt, RRA, Armalite, etc. when the fully completed rifle is sold into the distribution channel (Davidson's, RSR, Ellett Brothers, etc.) A LEO rifle that has made it to the "01 FFL" dealer level has already had the FET paid on it. "01 FFL" do not submit FET tax returns because they do not collect the tax.
Link Posted: 9/6/2004 12:42:10 PM EST
I'm pretty sure Lexington hit this one on the nose, the manufacturer pays the tax. Also from the ATF website...

"Q. Are all Federal agencies exempt from the excise tax on firearms and ammunition?

A. No, the Department of Defense and the U.S. Coast Guard are the only Federal agencies exempt from the excise tax requirements for firearms and ammunition.Therefore, the sale of firearms and ammunition to any agency of the federal government, other than to the Department of Defense or U.S. Coast Guard, is subject to Federal excise tax requirements."
Link Posted: 9/8/2004 8:07:47 PM EST

I hope to clear up a lot of misconceptions from what has been said in a bunch of messages:

Who pays excise tax? Manufacturer or importer does.

How much? 10% (handguns) or 11% (everything else).

FET regulations are complex. Manufacturers and importers need to pay attention. Even if a manufacturer A pays FET, manufacturer B might still have to pay FET on the difference for added value to the same gun from A. This is a VERY complex issue. Read the regulations.

If you know of a dealer (type 01) who is assembling firearms I would suggest that you do NOT buy the firearm from them... They are illegally making firearms and you do not want your firearm to be taken as evidence. (NOTE: A gunsmith can assemble parts that you bought from someone else and NO FET is required).

Class II (C2 is type 07 who paid SOT) is not an entirely correct term for who pays FET, as a type 07 without SOT STILL must pay FET on complete firearm being sold or used unless double taxation exception occurs. Correct term is tpe 07 (manufacturer), though a type 10 would also pay.

FET on government agencies CAN be exempted if the correct paperwork is filed by the government agency. It is not outright illegal to sell firearm that was FET exempt. Example: A governmental agency who has used firearms for standard time frame and wants to trade up is fine to do so and no FET is required. Had the agency bought and immediatly sold the firearms, then tax evasion has likely occurred.

Anyone who is making a firearm for their own person is not required to pay FET. Pick up your stripped lowes and make your personal firearms. Generally, do not plan on selling them without understanding the law.

Generally, FET must be paid by somene if it is not going to governmental agency or exported. It does NOT always have to be the manufacturer, but can be a second FFL who has filed the correct paperwork for having exempt firearms. A type 01 FFL having a LEO rifle does NOT absolutely mean that the FET has been paid. There are exceptions that are allowed by IRS if correct paperwork has been filed.

I hope this helps clear up some of the confusion.

mark
buda@TripleBreakProducts.com
Link Posted: 9/8/2004 8:10:17 PM EST
This is why I only buy guns private party.
Link Posted: 9/9/2004 11:53:30 AM EST

Originally Posted By Lexington:

Originally Posted By Model_One:
Finally, to your question. The big deal about LEO guns is (AWB aside) that FET is waived on these guns that are specifically for sale to government agencies, i.e., law enforcement. That's why it would still be illegal for a dealer to sell a LEO gun to a non-LEO customer - not because of the bayo lug, but because of the FET exemption.

That having been said, however, once a LEO gun leaves the dealer channel, it is just another gun (again, AWB aside) as far as the FET is concerned. So:

As things stand, you still wouldn't (technically) be able to buy a LEO Colt 6920 directly from, say, a Colt dealer. But you could buy one from and individual on Gunbroker or at a gun show with no problem.



I think this is incorrect. The only way that LE departments get firearms FET exempt is to buy on a department purchase order and by showing tax exempt status. An individual officer can get a personal (and authorized on letterhead) LEO rifle from an "01 FFL" and the price is higher by at least 11% (the FET).

Federal Excise Tax is due when the firearm is sold by the manufacturer "07 FFL". So the tax is due from Colt, RRA, Armalite, etc. when the fully completed rifle is sold into the distribution channel (Davidson's, RSR, Ellett Brothers, etc.) A LEO rifle that has made it to the "01 FFL" dealer level has already had the FET paid on it. "01 FFL" do not submit FET tax returns because they do not collect the tax.



I think that's just a matter of interpreting what I said. I was just addressing who pays the FET, and trying to point out that (again, AWB aside) an individual can't buy a LEO gun from a dealer without paying FET. If the FFL collects the FET, and that's somthing I'm not informed about, then that is outside the scope of my remarks. But after this coming Monday, if a cop wants to sell you his LEO gun, or you want to buy one from the local gun shop (and he collects FET) then it will be just like any other gun.

I'm planning on ordering a 6920, myself, just as soon as it's legal, and if I have to tip the ATF 11%, so be it.
Link Posted: 9/9/2004 11:55:51 AM EST

How would this affect my purchase of an LEO lower that came from a complete factory rifle?


After Monday, it's a moot point. Buy the whole gun!
Link Posted: 9/9/2004 1:06:32 PM EST
[Last Edit: 9/9/2004 1:09:40 PM EST by scrum]
This is a legitimate question being asked right now at the BATF. Normally the onus is on the manufacturer to report and collect the tax. With the LEO parts now potentially being indistinguishable legally (provided not NFA) from normal civilian firearms, the tax issue needs to be addressed. This may be a means of continuing the restriction on these weapons.

The got Al Capone on less.

I am overdue for a written response on this issue by the BATF, but called today to follow up and was told that their legal/policy team is still trying to make up its mind.
Link Posted: 9/9/2004 2:11:16 PM EST

Originally Posted By Model_One:

How would this affect my purchase of an LEO lower that came from a complete factory rifle?


After Monday, it's a moot point. Buy the whole gun!



I bought the upper several months ago and I just picked up the lower today. When I put the rifle together on Monday am I responsible for the FET?
Link Posted: 9/9/2004 3:01:13 PM EST

Originally Posted By budam:
Anyone who is making a firearm for their own person is not required to pay FET. Pick up your stripped lowes and make your personal firearms. Generally, do not plan on selling them without understanding the law.
mark
buda@TripleBreakProducts.com



I think (and hope) Mark sumed it up. FWIW, it makes sense to me. Since a stripped lower hasn't had it's FET paid and assuming that your LEO lower hasn't had it's FET paid, then the situation should be the same. Just be aware when you sell the rifle. BTW, if you got your 6920 lower from Jim at Police Supply, I believe that he indicated in his post that the FET was paid.

-Red-
Link Posted: 9/9/2004 3:46:23 PM EST

Originally Posted By Redhook:

Originally Posted By budam:
Anyone who is making a firearm for their own person is not required to pay FET. Pick up your stripped lowes and make your personal firearms. Generally, do not plan on selling them without understanding the law.
mark
buda@TripleBreakProducts.com



I think (and hope) Mark sumed it up. FWIW, it makes sense to me. Since a stripped lower hasn't had it's FET paid and assuming that your LEO lower hasn't had it's FET paid, then the situation should be the same. Just be aware when you sell the rifle. BTW, if you got your 6920 lower from Jim at Police Supply, I believe that he indicated in his post that the FET was paid.

-Red-



Yes...the lower came from Jim and was once a complete rifle. According to Jim, the FET was paid by Colt. I'm just wondering if I am responsbile for it as well.
Link Posted: 9/9/2004 4:43:37 PM EST

Originally Posted By Bradd_D:

Originally Posted By Redhook:

Originally Posted By budam:
Anyone who is making a firearm for their own person is not required to pay FET. Pick up your stripped lowes and make your personal firearms. Generally, do not plan on selling them without understanding the law.
mark
buda@TripleBreakProducts.com



I think (and hope) Mark sumed it up. FWIW, it makes sense to me. Since a stripped lower hasn't had it's FET paid and assuming that your LEO lower hasn't had it's FET paid, then the situation should be the same. Just be aware when you sell the rifle. BTW, if you got your 6920 lower from Jim at Police Supply, I believe that he indicated in his post that the FET was paid.

-Red-



Yes...the lower came from Jim and was once a complete rifle. According to Jim, the FET was paid by Colt. I'm just wondering if I am responsbile for it as well.



No
Link Posted: 9/10/2004 9:13:48 AM EST

Originally Posted By Model_One:
I was just addressing who pays the FET, and trying to point out that (again, AWB aside) an individual can't buy a LEO gun from a dealer without paying FET.



I disagree. A natural person can buy a LEO gun that has not had FET paid on it. It is a matter of why is the department getting rid of the gun. If they always go to new guns every 3 years as department policy, NO FET would be required. If the department bought 3 guns without FET being paid and then sold them to a natural person, it is likely they are going to get in trouble because they did not pay FET on the firearms (tax evasion).



But after this coming Monday, if a cop wants to sell you his LEO gun, or you want to buy one from the local gun shop (and he collects FET) then it will be just like any other gun.



A cop who paid/paid the gun has already paid FET - NO FET problems.

In the vast majority of the cases the "local gun shop" will not be able to pay FET as they have not filed the correct forms.

mark
buda@TripleBreakProducts.com
Link Posted: 9/10/2004 9:19:57 AM EST

Originally Posted By scrum:
With the LEO parts now potentially being indistinguishable legally (provided not NFA) from normal civilian firearms, the tax issue needs to be addressed. This may be a means of continuing the restriction on these weapons.



I guess I do not see a problem. Your FET concern has always been there, even before 1994. A department who bought pistols/rifles in 1975, FET free, and sold them in 1984 was likely OK. The precedence was set a LONG time ago in this regard.

IMHO, 9/14/2004, in regards to FET, is nothing exciting. Business as usual.

The interesting point will be the allownce of "Restricted Use..." firearms losing their LEO status. I *BELIEVE* they will lose their status and become like any other firearm, but I have been wrong before.

mark
buda@TripleBreakProduc­ts.com
Link Posted: 9/10/2004 9:22:08 AM EST

Originally Posted By Bradd_D:
I bought the upper several months ago and I just picked up the lower today. When I put the rifle together on Monday am I responsible for the FET?



Generally, NO. FET is due on complete firearms and associated materials shipped as part of package. This includes cost of packaging, advertising (excluding certain local advertising), tooling and the list goes on...

I would not worry about it.

mark
buda@TripleBreakProducts.com
Link Posted: 10/5/2004 1:06:58 AM EST
[Last Edit: 10/5/2004 10:48:54 AM EST by onrope1971]
“If you know of a dealer (type 01) who is assembling firearms I would suggest that you do NOT buy the firearm from them... They are illegally making firearms and you do not want your firearm to be taken as evidence. (NOTE: A gunsmith can assemble parts that you bought from someone else and NO FET is required). “

So if a dealer buys a stripped lower and assembles the fire control group and butt stock is that actually considered assembled? It does not have the barrel or upper receiver installed. It cannot be fired.

I asked the same question to an ATF inspector and also an agent. They could not give me an answer. Can somone shed some light on this because I have been seeing brand new AR's at the gun show selling for $525. The buttstock is not attached to the lower and the upper is not attached. The table is basically AR-15 ala carte. I did some simple math and it seems that the FET cannot possibly have been paid and this guy to be making any money.
Link Posted: 10/5/2004 9:15:08 AM EST

Originally Posted By onrope1971:

I asked the same question to an ATF inspector and also an agent. They could not give me an answer.




That's your answer. It's the Feds who would be charging you. Get a letter from BATFE stating their position.
Link Posted: 10/5/2004 2:16:33 PM EST

Originally Posted By Dave_A:
FET is paid by FFL holders (dealers, manufacturers, etc)...

NOT by consumers...

You never have to worry about FET, other than the fact that if you build from a stripped lower & parts kit the Feds don't get any money...



FAET is paid by anyone who manufacturers firearms, except for personal manufacturing and the person then actually uses it*.

Visit www.ttb.gov/ for more information.

mark
buda@TripleBreakProducts.com

* = Website has a clearer example os what is involved...
Link Posted: 10/5/2004 2:25:39 PM EST

Originally Posted By onrope1971:
So if a dealer buys a stripped lower and assembles the fire control group and butt stock is that actually considered assembled? It does not have the barrel or upper receiver installed. It cannot be fired.



It must be a complete firearm to require FAET to be paid. Missing a part that would not allow firearm to function would make it an incomplete firearm and no FAET would be paid. See www.ttb.gov for more information.



I asked the same question to an ATF inspector and also an agent. They could not give me an answer. Can somone shed some light on this because I have been seeing brand new AR's at the gun show selling for $525. The buttstock is not attached to the lower and the upper is not attached. The table is basically AR-15 ala carte. I did some simple math and it seems that the FET cannot possibly have been paid and this guy to be making any money.



Some "dealers" are selling parts seconds that are not worth buying. Other manufacturers will not buy them as they are not up to the quality that is required.

Olympic sells a $595 Plinker Plus rifle that includes FET. It can be done if you have a large enough operation.

mark
buda@TripleBreakProducts.com
Link Posted: 10/5/2004 6:55:01 PM EST

Originally Posted By budam:

Originally Posted By onrope1971:
So if a dealer buys a stripped lower and assembles the fire control group and butt stock is that actually considered assembled? It does not have the barrel or upper receiver installed. It cannot be fired.



It must be a complete firearm to require FAET to be paid. Missing a part that would not allow firearm to function would make it an incomplete firearm and no FAET would be paid. See www.ttb.gov for more information.



I asked the same question to an ATF inspector and also an agent. They could not give me an answer. Can somone shed some light on this because I have been seeing brand new AR's at the gun show selling for $525. The buttstock is not attached to the lower and the upper is not attached. The table is basically AR-15 ala carte. I did some simple math and it seems that the FET cannot possibly have been paid and this guy to be making any money.



Some "dealers" are selling parts seconds that are not worth buying. Other manufacturers will not buy them as they are not up to the quality that is required.

Olympic sells a $595 Plinker Plus rifle that includes FET. It can be done if you have a large enough operation.

mark
buda@TripleBreakProducts.com



This sheds some light on the subject. I checked out the TTB website and read the section on weapons kits. The guy is not adding on FET. From what I am reading and someone can correct me if I am wrong. The firearm is not complete. You have to pick the lower (in this case mega or stinger) and you pick up the barrel / upper. At this point both are separated. Then you pick out a buttstock. Your are carrying them home and slapping together the upper to the lower push in two pins and screw on the buttstock. Voila a brand new black rifle.
Now I understand the point being made about the quality of parts being used. I have been around the black rifle for many years now and have seen my share of junk ones. I can usually tell the difference between good parts and bad. I do not however have any experience with the stinger or mega stuff. In handling one of these rifles that had the many evile features I was pretty impressed. The barrels I know are DPMS uppers are from stinger / mega. All funtion tests were done and passed. Bolt carrier is stamped with a D for DPMS.

Like I said someone correct me if I misread or if I am looking beyond the governments intended "grey" area of taxation.
Link Posted: 10/7/2004 1:12:52 PM EST
[Last Edit: 10/7/2004 1:14:13 PM EST by budam]
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