I am thinking of building AR-15s to sell through the local paper or at local gun shows.
Do I need a licence? Or is It just me selling a gun I no longer want?
I just figured it would be a good way to make some extra money.

It's a good way to learn the time-honored profession of stamping out license plates!


You can NOT build guns for resale if you are not a federally licensed firearms manufacturer,  period.

There is nothing more to be said than that.

CJ

Ok, thanks, that is what I wanted to know.

(Edit)
What about only assembling rifle kits? I mainly am thinking of assembling one at a time and selling it, then building another. Any more help would be appreciated.

If you're engaged in the business of building rifles from components or kits and selling them for profit, then you ARE engaged in the business and must be licensed.

You could probably get away with building up some rifles for your friends and family,  but if you're building kits and take them to a gun show and start selling them from a table,  you're on thin ice.

CJ

Let's not forget the tax evasion issue. Assembling from parts and selling the completed rifle, is in affect, evading the 11% Federal Tax.

Which is worse, ATFE problems or IRS problems? Doesn't matter, they'd both come after you!

Thanks for the Heads up
Guess what I wont be doing!

Amen to the "license plate" scenario risk.

In that this is a Legal Forum, I'll give you the law.
See [url=http://www4.law.cornell.edu/uscode/18/921.html]18 USC 921(a)(11)(A)[/url] in that you'd be a "dealer"
and
See [url=http://www4.law.cornell.edu/uscode/18/922.html]18 USC 922(a)(1)(A)[/url] in that you'd need a license (FFL)

See [url=http://www4.law.cornell.edu/uscode/18/921.html]18 USC 921(a)(21)(C)[/url] for the provisions of selling from one's own collection, and note that "dealing in firearms as a regular course of trade or business" is an ambiguous term, and can be interpreted against you in court, based on the facts. So Amen on the "thin ice" scenario as well.

Cheers, Otto

Not if its just a hobby.

I figure if you have a regular job and just do this in your spare time for fun that qualifies as hobby.

Nope, building specifically for the purpose of resale is manufacturing and requires a license.  Building for personal use, and later deciding to sell is OK, though.

So how do you designate a diffrence?

I figure if you buy a few lowers when you spot a great deal and then either trade them or build them and sell them you are a hobbyist, enhancing your personal collection.
[b]IF[/b] you have a regular job and if your personal collection keeps getting larger.
If all you do is buy build and sell AR's, well thats another story.

Now that we're into splitting hairs,  I will say that I consider it like this:

If I were to get a great deal on lowers and buy three at once,  and got other similar deals on lower parts kits and uppers as well,  (and this stuff is all brand new),  if I built up three new rifles and sold one as a new rifle,  then I could be in danger of running afoul of the law.

The catch is building one up and selling it as NEW.
If you put 200 rounds through it and sold at as very slightly used,  you could get away with saying that you bought it for your own personal use, tried it out, didn't quite like it, and decided to sell it.

You could also get away with saying that you've just run low on money and have to sell these rifles out of your collection.

It's sort of a "You can get away with it once or twice" scenario.   If you're building rifles specifically to sell them,  you're on thin ice and if you are regularly selling your rifles from a table at a gun show,  you're begging to be noticed.

There's also a time element.  I don't think I'd want to be selling a rifle with a receiver that went into the manufacturer's logs as shipped just  a few months or weeks ago.   It'd be difficult to call a six week old rifle "used" unless it had clearly been used a lot in that time.

Caution and discretion.  

CJ

Our interpretation of the law is really meaningless. If they want to bust you and you give them a thread they'll hang you.
I DID buy three lowers cause they were 75 bucks each.
I have been gathering parts for nearly a year now. It started as a project to build ONE Viet era replica that has turned into enough parts to build THREE (I am short on pencil barrel).
The first rifle was sold to a friend months ago. It is just nearing completion. Waiting for silver solder paste from brownells.
I am hardly building for profit or sales and my collection will be enhanced by two rifles when I'm done.

You also need to consider your state laws as to what defines dealing in firearms. Some states have a restriction on the number of firearms you can sell privately without being licensed by the state or county.

The thread's a little stale, but I found these as an aside looking in the US Code under 18 USCA 921.  
We can argue about the "dealer" definition but these cases have the definition the Judges will use. (Any law librarian can get these cases for you with the case name and full number)

US v. Jackson 480 F.2d 927
Defendant convicted of dealing without a FFL for regular sales at gun shows, even though he was a self-proclaimed "collector"-- the "hobby" defense was not a defense.

US v. Gross 451 F.2d1355
Defendant was convicted of not having a FFL for selling 11 firearms in short period of time; cited in:

US v. Shirling 572 F.2d 532
Defendant convicted of not having a FFL, even when it wasn't for profit; "[i]Anyone is engaged in the business of dealing in firearms if they have guns on hand or are ready and able to procure them, in either case [red]for the purpose of selling[/red] some or all of them to such persons as they might [red]from time to time[/red] conclude to accept as customers[/i]"
Also the "hobby" defense was denied.

Its a five year felony, you lose your guns, and can't have any more even if you [i]dabble[/i] in dealing.  Each one of the convicted defendants above sold to or was contacted by an undercover ATF agent, so decide for yourself if "hobby" dealing is worth it. Above all, know the law.
Besides its only $200 for a 3 year FFL anyhow.

Cheers, Otto

Where can I find info on getting a FFl then..
I didnt realise they were so inexpensive

You can start by reading the law here: [url=http://www4.law.cornell.edu/uscode/18/923.html]Sec. 923. - Licensing [/url]

Then from the [url=http://www.atf.gov/firearms/nlc/index.htm]ATF National Licensing Center[/url]web site you can request a FFL application packet to be mailed to you, and then its just following the directions.

From the ATF site above:

To be an FFL holder, you need to be actively engaged in the business of dealing in firearms with  intent to make a profit,  and you must maintain a storefront with regular hours of operation.

You can't just get the FFL and make the occasional sale as a hobby or do it out of your home.   Those days are gone.

CJ

A storefront is not a requirement, just a premises from which it's legal to conduct your business.  Out in unzoned areas, or in areas zoned multi-use, or even in residential areas with a proper waiver you can run a gun business from your home without a commercial storefront.

You must still be in business as a profit-making activity, and not just acquiring guns for yourself or friends, or ATF will pull your license at their earliest opportunity.