Yet another lower/upper question.

[WFAInc]

I searched but could not find any specific info. Maybe someone can point me to the right direction.

I'm an FFL, do I need a special license to assemble AR lowers or uppers? No gunsmithing, just assembly.

[tenpercentfirearms]

I searched but could not find any specific info. Maybe someone can point me to the right direction.

I'm an FFL, do I need a special license to assemble AR lowers or uppers? No gunsmithing, just assembly.

If you put together a lower and an upper and then sell it, that is manufacturing and you might be allowed to do so many a year before having to pay excise tax. Otherwise you need an 07 FFL and have to pay excise tax.

Supposedly, if a customer bring you an upper and a lower and asks you to build it for them, then you are just gunsmithing and no excise tax or 07 FFL is needed.

[billslugg]

I recall speaking with the agents about this during their visit. There is no amount of manufacturing for resale that is allowed before you are asked to get an 07. This is one of the reasons they price the 07 at $150 rather than the $200 for an 01. They encourage you to be an 07 in order to avoid any problem with the law. They are veeery picky about manufacturing for resale.

[ugimports]

If you put together a lower and an upper and then sell it, that is manufacturing and you might be allowed to do so many a year before having to pay excise tax. Otherwise you need an 07 FFL and have to pay excise tax.

Supposedly, if a customer bring you an upper and a lower and asks you to build it for them, then you are just gunsmithing and no excise tax or 07 FFL is needed.

I was told this (bolded section) as of June 2009 by my initial interviewing ATF agent as well. In this scenario you would only be charging the customer for services rendered and possibly for some components used in the build.

[billslugg]

I was told this (bolded section) as of June 2009 by my initial interviewing ATF agent as well. In this scenario you would only be charging the customer for services rendered and possibly for some components used in the build.

That is correct. The key is that it is "not for resale". Doing it for yourself is fine. For a customer fine. For resale no. If you are engaged in a business with the intention of making a profit and you make a change to a gun that you own and you then sell it then you are a manufacturer and need an 07 FFL. The manufacturer in all cases is considered to be the owner of the firearm. In the US a citizen may modify his own firearm. Although he is a manufacturer, he gets the "personal use" exemption. Any person may modify a friend's gun, even for money, as long as it is not in the conduct of an ordinary business. The friend, as the owner, is the manufacturer but gets the personal use exemption. But if you are in the conduct of a business whereby guns that you own are modified for resale then you must have an 07 FFL.

This is where the urban legends come from claiming that some guy was imprisoned in Leavenworth for drilling and tapping a hole for a scope. Yes, that is part of the story. The other part is that he was putting 1000 scopes a year on surplus rifles he had bought for resale.

[Capt. Speirs]

So, a customer buys all the necessary parts to build a complete AR. Ten days later the customer picks up the lower and has all the remaing parts with him. Now the customer asks you to assemble the AR for him, is this ok for an 01 FFL?

[ugimports]

So, a customer buys all the necessary parts to build a complete AR. Ten days later the customer picks up the lower and has all the remaing parts with him. Now the customer asks you to assemble the AR for him, is this ok for an 01 FFL?

I was told this is ok, granted I didn't ask for that in writing at the time.

[billslugg]

I was told this is ok, granted I didn't ask for that in writing at the time.

Three truisms.
Any change to a gun is manufacturing.
The owner is the manufacturer.
There is a personal exemption that any citizen can take advantage of.

You can assemble it for him as long as he owns the parts. You could even assemble your own gun for your own personal use. It is always the guy who owns the receiver that is the owner. In the case of an AR-15 you could have two owners because the receiver is in two parts.

An 01 or a citizen can even sell his personal weapon after manufacturing it. It is not something he should do very often because once he begins deriving a substantial portion of his income from manufacturing then it is no longer personal, and there is zero tolerance for unlicensed manufacturing for resale outside of the personal exemption.

Being able to use the personal exemption is extremely important. If you lose that you are screwed. If you are just dabbling for your own pleasure you have nothing to worry about, other than the regulations that apply to manufacturing. The only time you would have to worry about that was if you had made your own receiver, then you have to follow the rules on marking it. If you have ideas about leading a "very active" personal exemption life, just remember: Once you tread over the "substantial" line, the penalties are severe.

So what is substantial? Aside from what ever case law there is, none of which I have read, you should act as if, one day, you were standing in front of a jury sweating it out. The prosecutor has a pie chart and your gun sales as a portion of your pie better damn well be tiny. For those who were unemployed at the time, the pie chart is going to be an especially big problem. Unless you were just selling off your collection. Any buying/modifying/selling while unemployed would not look very good at all.