ITAR / FET Help

[user65]

Hi Guys,

I'm a few days away from being all setup with the state and officially able to start dealing in firearms. I don't really have an 01 related question today, but I'd like to see if anyone can answer my question for an 06. I need to confirm some info regarding FET and registering for ITAR.

I'm really trying to figure out a way to reload and actually make a profit. $2250 ITAR registration and 11% FET taxed on sales price is a real deal killer for a startup like myself. Insurance is in hand, city reg's all set, and now I'm trying to figure out the feds. Any help or guidance is greatly appreciated.

This FAQ/Guide has me wondering if I can buy new brass instead of reloading used brass to avoid FET: http://www.ttb.gov/firearms/ammunition.shtml I can't really find a better resource for explaining when to collect FET but I don't think that this is possible, unless somehow the brass manufacturer is responsible for FET so it's not necessary for me to pay it as well. (?)

My current scheme if new brass is not eligible to be FET-free:
Stock brass on shelves for sale or free (trying to determine what would be best/legal)
Offer a brass-reloading program, bring in 50 pieces of brass, get 50 rounds of ammo for $18.99 or whatever. Adhere to the FET rules, never mix brass and customer retains title to brass.

Thanks in advance.

[franklinarmory]

Excise tax and ITAR are non negotiable. If your business model doesn't allow you to succeed after paying these expenses, there is probably something wrong with your cost of goods sold. Maybe you can look at a segment of the market that is not well served? Trying to take on big mfgs with 9, 40, 45, & 223 could be the hard way to go.

[mrkubota]

If the customer supplies the brass, there's no FET...
You MUST reuse their brass for their order. CA sales tax still applies unless you're shipping to an out of state customer.
Labor/shipping only if the customer supplies all needed components.

Don't forget the Prop 65 warnings on the boxes.

FET is normally due quarterly, CA will vary depending on the revenue. May be by qtr or yearly and the fiscal year for them starts 07/01... so that can monkey with 'normal' yearly tax filings.