I posted this in General Disscussion to but I thought I shoud ask here to, at some point in the future I thought it would be nice to get a Class 3 S.O.T, and maybe a class 2, and conventional manufactureing FFL aswell, since I'm completely discusted at the price of Transferable machineguns, and it's the only way I could think of to possibly get non C&R NFA stuff in Michigan, so what would be involved in getting one, and do I need a store front, or can I run it from home with a sighn saying "Hours by appointment only" posted, the purpose would mainly be for my own personel use, and online ordering, and catelogs for the business part of it, and how would I get Demo letters?....

Here is the skinny;
You can have an FFL out of your home as long as there are no zoning regulations prhibiting it. If there are and you can get a variance or exception that is OK too just make 150% sure you have EVERYTHING squared away with your local city/townshp zoning before you apply for your FFL. I was told by my ATF inspector that once denied for an FFL you are virtually screwed from future approval. Get everything in writing from your city zoning and send coppies with your application.

The feds will come and visit you when your application reaches the inspection phase and they will as many questions like security, alarms, waste removal stuff like that. They will want to see your "manufacturing facilities" if you applying for an 07 Manufacturing license. If you don't have any yet because you don't want to make the investment in machinery until you have the license just tell them that.

If you have a C&R license they will take this opportunity to do a compliance check on that to make sure your keeping accurate records in your bound book.

Here is how the licensing works:
If you get a Type 01 Dealer license you be a regular firearms dealer. To deal in NFA items, other than destrictive devices, you just pay the annual SOT $500 that is valid from July 1 through June 30 and is not pro-rated. If you pay $500 in May you will have to pay $500 again in July. The $500 tax is a reduced rate tax and if you go over $500k gross receipts (I think that is the amount) the tax is $1000 Paying the SOT tax makes you a Type 01, Class 3 Dealer.

If you get a Type 07 Manufacturing license it is the same thing. You can manufacture regular firearms and to become a manufacturer of NFA ,other than destructive devices, you just pay the SOT tax but it is more, $1000 I think. There is also much debate over the ITAR tax that is paid to the State Department. That is a tax on International Trade in Arms and is like $1750 a year. Some say it is required to be paid even if you don't do any international trade, some say you don't have to pay it.
Paying the SOT makes you a Type 07, Class 2 Manufacturer.

Do not confuse license TYPE and tax CLASS, they are different things.

Demo letters come from the police. If a police department wants a demonstration of a item, they write a letter saying that they request a demo of X model gun, in X caliber, from X person or business. You find the gun, strike your deal and the seller sends the transfer paperwork along with a copy of your demo letter to ATF/NFA and wait for approval. The hard part is finding a PD that wants a demo of a MG becasue most don;t have much need for them and are kind of put off by them anyway. This letter must be issued by the chief or somone duly authorized to sign for him on these matters like perhaps the head of the PD armory. Not 100% on that though.

Your BUSINESS license will always be for BUSINESS. If you say it is for personal use you will be denied.

You cannot have "By Appointment Only" hours, you MUST have regular business hours but they can be as long or as short as you like. The application for the FFL requires you list your hours. There is no requirement for signage.

Hope this helped,
Dave B.
Great Lakes Arms
Clay MI

Gordy -
I'm preparing to get my FFL (strictly as a dealer) and run it uot of my home.  I understand the local requirement and the tax ID requirement, do I also need to incorporate?  I was under the impression that I did not need to have a business license, is that incorrect?

You must comply with all state and local regs so you have to get a sales tax license. Some form of business is required for this, I have an DBA. You don't need to have this before applying for your FFL but it is best to get everything done up front.