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View Full Version : AR Pistols sold with "returnable" uppers


EBR Works
07-07-2011, 10:16 AM
I have seen lots of discussion by CalGunners wanting to acquire AR pistols from dealers with the uppers being "returnable" to the dealer so the buyer then has a legal pistol lower after the transfer. Anyone have opinions as to how the Cali DOJ might respond to a dealer should they engage in this type of activity?

We are not doing this, just looking for opinions/ideas. :D
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Ed_Hazard
07-07-2011, 10:20 AM
If this was a legal way to aquire a Pistol AR lower, I would definitely look into it. The problem with most AR pistols I see is they have an upper config that I dont like or would prefer a custom build up, but the prices are prohibitive at the time. Haveing the lower and the chance to take my time aquiring/building an upper would be nice.

doubledgarage
07-07-2011, 10:42 AM
If this was a legal way to aquire a Pistol AR lower, I would definitely look into it. The problem with most AR pistols I see is they have an upper config that I dont like or would prefer a custom build up, but the prices are prohibitive at the time. Haveing the lower and the chance to take my time aquiring/building an upper would be nice.

Agreed!!

wash
07-07-2011, 10:46 AM
The reason for doing this is that the CA roster and DROS system suck but I would not do it because of federal tax issues.

The taxes will either be pretty high and cut in to your potential margin or you could use really cheap parts and possibly get hit for tax evasion or something like that.

Outside of CA, you just buy a virgin lower and forget about it, so it is entirely CA's fault but it's a federal tax thing, I wouldn't risk it.

EBR Works
07-07-2011, 10:52 AM
It seems like it should not matter as to the value of the upper as long as FET is paid on the value of the complete firearm. No?

Blood Ocean
07-07-2011, 10:53 AM
The uppers aren't regulated so why should it be a problem at all? Worst case scenario would be that the "return" of the upper would constitute a new sale and require sales tax. As long as the DROS process is followed DOJ can't really say anything about it, it's no different than buying a pistol upper online.

bwiese
07-07-2011, 11:08 AM
This is akin to the same situation as a person walking out the door of an FFL with a single-shotted Glock Gen4 w/~7"-8" long barrel, who then returns (1 minute or 1 year) later to swap the long barrel out for a stock barrel. [Note that such a gun was DROSed while the gun was a Roster-exempt dimensionally complian single shot pistol and remained in that status til the customer walked out the door; after that, it's his gun and he can dispose or exchange the parts any way he chooses.]

In the case you mention, I'd charge full price (i.e., complete gun upper & lower). The customer walks out the door, and some time later comes back and sells the upper back to you, and you credit him back (cash, charge, whatever). This has a bit of pain, but it clarifies that you sold a full gun.

Also since I seem to think just a few uppers are bouncing around in this scenario, it appears you're manufacturing single-shot Roster-exempt AR pistols from multiple raw lowers - so in this case you need an 07FFL (and deal with mfg tax issues, etc.) [This is not the case if people are buying already-mfg'd complete AR pistols you've imported and merely single-shotted with drop-in parts.]

redneckshootist
07-07-2011, 11:19 AM
I have seen lots of discussion by CalGunners wanting to acquire AR pistols from dealers with the uppers being "returnable" to the dealer so the buyer then has a legal pistol lower after the transfer. Anyone have opinions as to how the Cali DOJ might respond to a dealer should they engage in this type of activity?

We are not doing this, just looking for opinions/ideas. :D
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we have done this many times. I dont see anything wrong with this

EBR Works
07-07-2011, 11:27 AM
This is akin to the same situation as a person walking out the door of an FFL with a single-shotted Glock Gen4 w/~7"-8" long barrel, who then returns (1 minute or 1 year) later to swap the long barrel out for a stock barrel. [Note that such a gun was DROSed while the gun was a Roster-exempt dimensionally complian single shot pistol and remained in that status til the customer walked out the door; after that, it's his gun and he can dispose or exchange the parts any way he chooses.]

In the case you mention, I'd charge full price (i.e., complete gun upper & lower). The customer walks out the door, and some time later comes back and sells the upper back to you, and you credit him back (cash, charge, whatever). This has a bit of pain, but it clarifies that you sold a full gun.

Also since I seem to think just a few uppers are bouncing around in this scenario, it appears you're manufacturing single-shot Roster-exempt AR pistols from multiple raw lowers - so in this case you need an 07FFL (and deal with mfg tax issues, etc.) [This is not the case if people are buying already-mfg'd complete AR pistols you've imported and merely single-shotted with drop-in parts.]

Yes, I was thinking of the single-shot, non-roster transactions as being similar. Thanks for the clear and concise answer, as usual!
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thenodnarb
07-07-2011, 12:25 PM
I have seen lots of discussion by CalGunners wanting to acquire AR pistols from dealers with the uppers being "returnable" to the dealer so the buyer then has a legal pistol lower after the transfer. Anyone have opinions as to how the Cali DOJ might respond to a dealer should they engage in this type of activity?

We are not doing this, just looking for opinions/ideas. :D
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I dunno, but if you can do it, I'm coming to YOU.

EDIT: Actually I just saw one I liked on your website. Might have to pay you a visit sometime. I'll make an appointment when I have the $$$

EBR Works
07-07-2011, 12:38 PM
I dunno, but if you can do it, I'm coming to YOU.

EDIT: Actually I just saw one I liked on your website. Might have to pay you a visit sometime. I'll make an appointment when I have the $$$

Great! We have two in stock.

ETD1010
07-07-2011, 9:32 PM
I'm pretty sure Masterpiece arms sells their pistols this way.

blazeaglory
07-08-2011, 9:43 AM
Yeah It doesnt make sense because what is the point of a pistol lower without an upper? The person would have to buy an upper sooner or later. I mean, could this process save money? By what, maybe a couple hundred dollars? Are there that many people wanting to return pistol uppers just to keep a pistol lower?

bwiese
07-08-2011, 10:14 AM
Yeah It doesnt make sense because what is the point of a pistol lower without an upper? The person would have to buy an upper sooner or later. I mean, could this process save money? By what, maybe a couple hundred dollars? Are there that many people wanting to return pistol uppers just to keep a pistol lower?

I think some folks just aren't happy with whatever spec upper was put on an AR pistol and can't unfortunately buy a legit pistol lower (they don't know anyone doing a PPT, or have a non-CA relative that will give them one, etc.).
So they just wanna get something to get 'em started and eventually get the upper of their choice.

EBR Works
07-08-2011, 10:23 AM
We are considering offering this service. Working on some details before we can do so.... :D
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dfletcher
07-08-2011, 10:42 AM
Does having the upper a 22LR instead of a centerfire save any $$$ or make things legally easier? I'd like an AR 15 pistol, but it would have to be the RRA type that requires no buffer tube - I just don't like the look. I have parts galore hanging about. If I don't have to buy a buffer tube, buffer and spring and BB I save $$$, the dealer can sell at a lower price & still make some money. Just wondering.

bwiese
07-08-2011, 12:21 PM
Does having the upper a 22LR instead of a centerfire save
any $$$ or make things legally easier?

Probably not.


Rimfire status does not exempt handguns from CA AW laws.
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Rimfire status does not exempt handguns from Roster issues.
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12133PC single-shot exemption for ARs pretty much equally
easy for 22LR vs. centerfire - min. bbl length/overall length are
not issues on AR pistols and single-shotting conversion (0 rd
blocked magazine or equivalent + BulletButton) are also easy.
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I'd bet shorty AR uppers are more common in centerfire, and
not a huge price difference between a quality rimfire vs
quality centerfire. (I can even see the rimfire costing more.)


I'd like an AR 15 pistol, but it would have to be the RRA type that requires no buffer tube - I just don't like the look.

Understand.

I have parts galore hanging about. If I don't have to buy a buffer tube, buffer and spring and BB I save $$$, the dealer can sell at a lower price & still make some money. Just wondering.

Bottom line, your AR pistol has to be DROSed and leave the FFL assembled and operational, in exempt single-shot + non-AW configuration.

thenodnarb
07-08-2011, 3:20 PM
We are considering offering this service. Working on some details before we can do so.... :D
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That's great, because now I'm thinking I want a side charging upper. So I'll probably want to built it myself.

Here's a though: What if the customer brings you a rifle upper. You put it together. Then they can just walk out once they come to pick up.

Does this work? Its a complete gun. its just a "custom" gun with customer parts.

gozuki
07-08-2011, 3:32 PM
That's great, because now I'm thinking I want a side charging upper. So I'll probably want to built it myself.

Here's a though: What if the customer brings you a rifle upper. You put it together. Then they can just walk out once they come to pick up.

Does this work? Its a complete gun. its just a "custom" gun with customer parts.

If he's an 07, he can manufacture anything legal. As an 01, no he's not supposed to "make" anything.

EBR Works
07-08-2011, 3:36 PM
That's great, because now I'm thinking I want a side charging upper. So I'll probably want to built it myself.

Here's a though: What if the customer brings you a rifle upper. You put it together. Then they can just walk out once they come to pick up.

Does this work? Its a complete gun. its just a "custom" gun with customer parts.


We're talking about pistols here. I assume you meant a pistol upper. I have considered that avenue but we're not likely to go that way due to potential complications regarding Federal Excise Tax on manufactured firearms.

I have something in the works. Be patient please. Keep an eye on my vendor forum here for info if and when we have a viable solution.

If he's an 07, he can manufacture anything legal. As an 01, no he's not supposed to "make" anything.

You are correct, I am an 07.

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Ed_Hazard
07-08-2011, 3:42 PM
I think some folks just aren't happy with whatever spec upper was put on an AR pistol and can't unfortunately buy a legit pistol lower (they don't know anyone doing a PPT, or have a non-CA relative that will give them one, etc.).
So they just wanna get something to get 'em started and eventually get the upper of their choice.

Exactly, Thank you. With the ability to buy the lowers and have them readily available to me I can then take my time building the Upper config that i want to my specs.

For instance I want to run one with a Ferfrans pistol upper and no buffer tube, but the upper alone is $1400+. So it would help to be able to buy itpiecemeal, instead of finding an 07 ffl who would be able a to do the build. In these times money saved goes a long way.

blazeaglory
07-08-2011, 5:49 PM
I think some folks just aren't happy with whatever spec upper was put on an AR pistol and can't unfortunately buy a legit pistol lower (they don't know anyone doing a PPT, or have a non-CA relative that will give them one, etc.).
So they just wanna get something to get 'em started and eventually get the upper of their choice.

That makes sense

thenodnarb
07-08-2011, 6:03 PM
We're talking about pistols here. I assume you meant a pistol upper. I have considered that avenue but we're not likely to go that way due to potential complications regarding Federal Excise Tax on manufactured firearms.


Well I don't have a pistol lower yet so I can't have possession of a pistol upper. A rifle length upper makes it no less a pistol though. Same difference.

I have something in the works. Be patient please. Keep an eye on my vendor forum here for info if and when we have a viable solution.


I can be patient!

bwiese
07-08-2011, 6:06 PM
Well I don't have a pistol lower yet so I can't have possession of a pistol upper. A rifle length upper makes it no less a pistol though. Same difference.

Um, maybe not.

CA definition of pistol (well, handgun) involves being under 16" barrel length.

It would be a shame to 'contaiminate' something with a long barrel such that putting a short barrel back on it risks a violation.

EBR Works
07-08-2011, 6:17 PM
Um, maybe not.

CA definition of pistol (well, handgun) involves being under 16" barrel length.

It would be a shame to 'contaiminate' something with a long barrel such that putting a short barrel back on it risks a violation.

As always, Bill is a beacon of clarity! :D

Modimo
07-11-2011, 9:45 AM
If you guys figure this out and start to sell these, I would be most interested!

dantodd
07-11-2011, 9:55 AM
The other reason it is advantageous to do something like this is that a lot of folks who want to build an AR pistol already own AR uppers. To avoid federal and state SBR charges they are legally prohibited from buying their upper of choice until they have a legal lower.

EBR Works
07-13-2011, 11:57 AM
We're offering this now. See here:

http://www.calguns.net/calgunforum/showthread.php?t=454884

wash
07-13-2011, 12:21 PM
In theory that is great, you can get a lower in to someones hand.

In practice it is expensive and I bet you aren't making too much money, the excise tax eats up the profit and the sales tax on the full price makes it more expensive.

You're getting tag teamed by the Feds and the state.

xxINKxx
07-13-2011, 12:36 PM
We are considering offering this service. Working on some details before we can do so.... :D
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If you guys figure this out and start to sell these, I would be most interested!

+1

I think the AR pistols are kinda un-practical. But still cool non the less (more of a novelty item that would be cool to just have. And with the price a complete one is at most shops (1K and up) its very unnatractive to just go in and buy it. Thats why I would never purchase one since its not built to my standards.

Also if you ever see a pistol lower by itself for sale, it gets sold fast which makes it harder to obtain.

dantodd
07-13-2011, 1:04 PM
Also if you ever see a pistol lower by itself for sale, it gets sold fast which makes it harder to obtain.

There is no such thing as a "pistol lower by itself" in CA. You cannot buy an non-functioning pistol in CA.

Connor P Price
07-13-2011, 1:11 PM
I'm still not quite certain that I understand the benefit to this process. Some have mentioned that it would be easier financially to piece together the pistol rather than purchase it all at once. If you can acquire all the parts over a 6 month period of time, what would prevent you from saving for 6 months and then purchasing it all at once? Lets assume that's doable.

So under the assumption that anyone who could piece a pistol together could also purchase it all at once after a bit of savings, why would this returnable upper situation be beneficial? Both parties involved are being hit be the additional taxes, so why not just have the 07FFL build the pistol to the specifications that you desire in the first place?

EBR Works
07-13-2011, 1:42 PM
In theory that is great, you can get a lower in to someones hand.

In practice it is expensive and I bet you aren't making too much money, the excise tax eats up the profit and the sales tax on the full price makes it more expensive.

You're getting tag teamed by the Feds and the state.


You're right, I'm not making any money on the first few that we do. I'll end up with a number of spare uppers that I can then re-use multiple times to offer this service to the CalGuns community. We can do 49 of these this year without FET liability. The first two we are offering were built by another 07, so they don't count towards the total.

There is no such thing as a "pistol lower by itself" in CA. You cannot buy an non-functioning pistol in CA.

Yes you can, if it is a PPT or you are an exempt LEO.

I'm still not quite certain that I understand the benefit to this process. Some have mentioned that it would be easier financially to piece together the pistol rather than purchase it all at once. If you can acquire all the parts over a 6 month period of time, what would prevent you from saving for 6 months and then purchasing it all at once? Lets assume that's doable.

So under the assumption that anyone who could piece a pistol together could also purchase it all at once after a bit of savings, why would this returnable upper situation be beneficial? Both parties involved are being hit be the additional taxes, so why not just have the 07FFL build the pistol to the specifications that you desire in the first place?

We can do that. Just tell us what you want and we'll make it happen.

ke6guj
07-13-2011, 1:45 PM
Yes you can, if it is a PPT

but even if it is a PPT, doesn't it need to be complete enough to do a handgun safety demo on it? Unless the FFL happens to have another AR pistol of the same make and model to demo instead.

Connor P Price
07-13-2011, 3:28 PM
You're right, I'm not making any money on the first few that we do. I'll end up with a number of spare uppers that I can then re-use multiple times to offer this service to the CalGuns community. We can do 49 of these this year without FET liability. The first two we are offering were built by another 07, so they don't count towards the total.

I didn't realize that you could avoid the FET, as long as your doing that it moots my concern about over taxation.

We can do that. Just tell us what you want and we'll make it happen.

Your just down the road a piece from me. Hopefully I can make that happen sometime.

Flying Sig
07-13-2011, 3:30 PM
Deleted because I kinda thread crapped on the OP. Didn't realize you were a dealer.

Sorry!!

EBR Works
07-13-2011, 3:44 PM
Your just down the road a piece from me. Hopefully I can make that happen sometime.

Call me anytime!

EBR Works
07-14-2011, 1:59 PM
Deleted because I kinda thread crapped on the OP. Didn't realize you were a dealer.

Sorry!!

No worries!

EBR Works
07-14-2011, 2:02 PM
but even if it is a PPT, doesn't it need to be complete enough to do a handgun safety demo on it? Unless the FFL happens to have another AR pistol of the same make and model to demo instead.

Good question! I'll post this in the FFL forum.

bwiese
07-14-2011, 2:13 PM
but even if it is a PPT, doesn't it need to be complete enough to do a handgun safety demo on it? Unless the FFL happens to have another AR pistol of the same make and model to demo instead.

That's the way I understand this happening for even things like, say, 1911 frames.

The safetydemonstration test for a PPT xfer/consignment sale of a stripped frame is to take a like built-up gun (identical configuration and relative position in terms of order-of-operations and relevant safeties, etc.) to do the safety demo.

Mstrty
07-14-2011, 2:18 PM
That's the way I understand this happening for even things like, say, 1911 frames.

The safetydemonstration test for a PPT xfer/consignment sale of a stripped frame is to take a like built-up gun (identical configuration and relative position in terms of order-of-operations and relevant safeties, etc.) to do the safety demo.

Or be exempt to the safety demonstration :D Thanks CGF:thumbsup:

EBR Works
08-05-2011, 4:47 PM
Now a reality! Check this out:

http://www.calguns.net/calgunforum/showthread.php?t=463278
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Connor P Price
08-05-2011, 5:03 PM
Perfect timing given the recent atf rumblings.

Sent from my SGH-T959 using Tapatalk

EBR Works
08-05-2011, 5:42 PM
Perfect timing given the recent atf rumblings.



I didn't plan that, just a happy coincidence! :D