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Posted: 8/23/2010 12:51:05 PM EDT
| if a manufacturer builds a rifle and sells it he has to pay the FET on that rifle (assuming he is over the 50 mark). what if a customer orders a complete lower and a complete upper? would it matter if they are invoiced together or shipped together? |
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if a manufacturer builds a rifle and sells it he has to pay the FET on that rifle (assuming he is over the 50 mark). what if a customer orders a complete lower and a complete upper? would it matter if they are invoiced together or shipped together? Does the FFL give you an information book that lets you know about collecting these taxes? If not how would I even know there is a tax on complete firearms. |
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there is this
http://www.atf.gov/publications/download/p/atf-p-5300-4.pdf 16. FEDERAL EXCISE TAX
A Federal excise tax is imposed by 26 U.S.C. 4181 on the sale by the manufacturer, importer or producer of firearms, shells, and cartridges. The tax is 10 percent of the sale price for pistols and revolvers, 11 percent of the sale price for firearms and 11 percent of the sale price for shells and cartridges. This tax was formerly administered by ATF. Now, the tax is administered by the Alcohol and Tobacco Tax and Trade Bureau (TTB), Department of the Treasury. The excise tax attaches only to the sale of complete firearms and ammunition or firearms that, although in a knockdown condition, are complete as to all component parts. |
| Did you sell him a complete rifle on the invoice? Or did you sell him a lower half, and an upper half? If you logged in a receiver, and then 4473'd a receiver, and never assembled them, you have not manufactured a rifle, and thus no tax to pay. I almost never assemble AR's for people. Between my bolt action builds and suppressors, I'm sneaking up on my 50 already and the year isnt even over yet. AR halves are easy builds that most customers can do once they get home, ESPECIALLY if you tell them you can save them 11% by "doing it themselves" ;) |
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my friend has on 07 and is looking into the tax issues and dosnt want to run into any tax problems by selling someone a lower and upper and not paying excise tax. he was tghinking of invoicing them as 2 items and never assembling them. maybe even shipping them in seperate packages.
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my friend has on 07 and is looking into the tax issues and dosnt want to run into any tax problems by selling someone a lower and upper and not paying excise tax. he was tghinking of invoicing them as 2 items and never assembling them. maybe even shipping them in seperate packages. If you're trying to avoid FAET, deliver in two different transactions. If your 07 friend delivers a firearm complete as to parts, then its assembly condition doesn't matter. Two transactions voids the completeness. |
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my friend has on 07 and is looking into the tax issues and dosnt want to run into any tax problems by selling someone a lower and upper and not paying excise tax. he was tghinking of invoicing them as 2 items and never assembling them. maybe even shipping them in seperate packages. If you're trying to avoid FAET, deliver in two different transactions. If your 07 friend delivers a firearm complete as to parts, then its assembly condition doesn't matter. Two transactions voids the completeness. thats what he was thinking of doing but wants to make sure its legal and not tax evasion. |
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If he routinely supplies all parts to the same customer, but splits it into two transactions, then he probably would get hit for evasion, from the pattern of his activities. ATF has done that in the past, where one company was supplying everything to complete the rifles, but sent half the parts through another business (but direct billed/shipped through to the original customer).
Best not to do it as a pattern, or make sure he stays under 50 per calendar year... |
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i think i am just going to tell him to contact the ATF for clarification. The last thing I want to do is pass along advice that is questionable.
it seems like if someone buys an upper and a lower and he puts each on its own invoice and shipps them seperatly then he MAY be OK. One concern is that the payment he would recieve would be a single payment that covers everything. |
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