Ever since Obama proposed new regulations that may require FFL transfers for all gun sales, even those that law abiding gun owners are legally allowed to make everyday, many Americans are asking questions. What type of sales will be legal? Who will handle transfers at gun shows? What about transferring ownership to family members, or giving guns as gifts?
The answers have always been a bit murky. One way some of us who enjoy buying and selling guns are approaching this is to take the plunge and pick up a Federal Firearm License (FFL).
There are as many reasons to get a Federal firearms License as there are gun folks out there. I’ll leave the motivation question behind for a moment. If you are in the gun business–like I am, or want to be, you may benefit from obtaining an FFL of your own. I’m applying for mine now, and here’s some of what I’ve found.
What Are The Requirements of an FFL Holder?
Your responsibilities as an FFL, as per the BATF web page:
- To receive a license as a dealer (including pawnbrokers & gunsmiths), importer, or manufacturer of firearms, you must intend to engage in a firearms business.
- You can expect to be contacted by an ATF officer during the application process.
- You will be required to prepare and keep detailed records of all firearms transactions.
- Your records and premises will be subject to inspection by ATF officers.
- ATF notifies State and local authorities regarding applicants for Federal firearms licenses.
- State laws or local ordinances may require additional licenses or permits for firearms licenses.
- When requested by ATF, licensees are required to furnish information regarding firearms traces.
- Other State or local requirements, such as cash bonds, liability insurance, zoning restrictions, collection of sales taxes, etc., may also apply to your proposed firearms business.
You should contact your State and local authorities for specific information on their requirements.
Firearms licensees should contact the Internal Revenue Service for information regarding business operations and Federal income taxes.
What Type of License Fits?
When it comes to a Federal firearms License, one size does not fit all. The type of license you want depends heavily on what you intend to do with it. Each license has a different cost associated with it as well, so it may benefit you financially to ensure you’re not going overboard. In my case I am planning on getting an 01 FFL, which will allow me to receive guns and transfer guns to other FFL holders, as well as individuals (with the proper forms).
“But the BATF Won’t Give Me One Because…”
There are tons of supposed BATF restrictions floating around out there: “you must have a storefront,” or “you must be in a zoned commercial area,” or “you can’t operate out of your home,” and “you must have full time retail hours” etc. Like most bureaucratic processes, there are a lot of misconceptions in this area, let me tell you. For instance, according to some research done by FFL123.com, 64% of all FFL’s are home-based. In my home state of Arkansas, 60% of FFL holders are based in a residential area. The facts don’t match up with all the stories out there- do your own research before you blindly accept a restriction second-hand.
The Real BATF No-Goes
This list has a few restrictions that are easy to understand, and a few that can be a little tricky, although on the surface they appear straightforward.
- Must have a physical address- no P.O. Boxes.
- Must plan on selling guns! (not just ammunition)
- Must be selling guns for a profit (attempting to make a profit)- not just buying guns for yourself.
- Must have business hours (no description of how many) on a weekly basis.
- Must be selling guns outside of gun shows. (“sell” includes “transfers for others”)
- Must be legal to operate from the physical address you’ve listed.
- This means that if you are renting an apartment, your landlord may have a say.
- If you own your home, the city or county could have restrictions on home-based businesses.
- Don’t forget about your Homeowner’s Association- if they have a rule against it, you’re done.
- Cannot be Charged by Information or Under Indictment in any court for a Felony, or any other crime for which the Judge could imprison you for more than one year.
- Cannot be a Fugitive from Justice.
- Cannot be an alien who is Illegally or unlawfully in the United States.
- Must be 21+ years of age.
- Cannot be an unlawful user of, or addicted to, marijuana or any depressant, stimulant or narcotic drug, or any other controlled substance.
- Must not be subject to a Court Order restraining you from Harassing, Stalking, or Threatening your child or an Intimate Partner, or child or Such Partner.
- Must never have been convicted in any court of a Felony, or any other crime for which the Judge could have imprisoned you for more than one year, even if you received a shorter sentence, including probation.
- Cannot have been discharged from the Armed Forces under Dishonorable Conditions.
- Must never have been adjudicated as a Mental Defective, which includes having been adjudicated Incompetent to Manage Your Own Affairs, or been committed to any Mental Institution.
- Must not have renounced United States citizenship.
- Cannot have been convicted in any court of a Misdemeanor Crime of Domestic Violence.
The Right Way to Answer these Questions Truthfully
First of all, never lie; if you do, they will surely find you out. With that said, it’s important to be very sure about what the words in these questions mean. Keep in mind that you will not only fill out the paperwork, you will be interviewed in person by a BATF employee to review your application. So let us look at a keyword here, “profit.” To me, seeking profit means that I’m not just making a buck at some point during the year, but rather, that I am conscious of how much effort I am expending, and how much money I am making in return. I can tell you that $20.00 is about the minimum I would accept for transferring a firearm. I base that $20.00 on the amount of time involved. I don’t have too many friends for whom I would be willing to: receive a box from UPS, unpack, check the paperwork, log into my books, fill out the 4473, do the NIC’s check, log out of my books… for less than $20.00. If I am going to put my money out to order a gun, I will want to make some return on that investment.
What I’m getting at is this: I will set a reasonable fee structure, and I will make reasonable efforts to build a customer base. This will take time, and I think the ATF knows this. Heck, I have to make at least $200.00 before I break even on the license fees! With all this in mind, I sure am doing this to make a profit.
Let me just point out here that GunsAmerica can help you to make a profit. It is easy to set up and is cost effective to reach a huge national and local audience. https://www.gunsamerica.com/Login.aspx?ReturnTo=/Administration/User/Dashboard.aspx
Next, what are some good faith signs vs red flags? For example, if a boy comes to your door to take your daughter out for a date, and he is driving an old windowless van with “Free Hugs Inside” or “Lost Puppy Recovery Team” painted on the sliding door, you are seeing all kinds of red flags. Sure, that’s a bit of a drastic example, but you get my meaning. I would advise taking some or all of the following steps that are applicable to you, if you don’t want the BATF seeing flags that red on you.
- Get a business license, or a letter stating that one is not required.
- Get a letter demonstrating your compliance to applicable zoning laws.
- If you belong to a Homeowner’s Association, have the bi-laws in hand with an approval letter (if needed).
- Obtain a document from your landlord approving your venture.
- Don’t forget about a sales tax permit from the appropriate government agency.
So in an effort to do my due diligence, I looked on the city’s webpage to determine if there was anything prohibiting me from having an FFL out of my home. After carefully studied the information on the city’s webpage. Then I called to confirm my reading of the ordinances, that there was nothing that would stop my plan. The helpful lady on the phone told me that in fact I was correct and there was nothing required based on what I had described to her, in fact I did not even need a business license.
As I was gathering the paperwork together, I decided to go down to the office where I had gotten the verbal approval to request something in writing to have for the examiner. Somehow, I got directed to a different department at which point I ran into a less than helpful public employee who I’m pretty sure believes that all guns are radioactive. She spouted off several things, among which was that she would consider me a gunsmith. As a gunsmith, I was not zoned correctly. If the BATF inquired she would gladly inform them of such. I attempted to logically explain to her the difference between repairing firearms and what I was doing. Logic and reason were clearly lost on her. As I begin to escalate my issue I had a meeting with the city attorney who was able to straighten everything out and even provided me with a business license to present to the BATF for my planned endeavor.
The city attorney was clearly pro-Second Amendment. He forcefully explained to the lady that was standing between me and my FFL he didn’t really care what her opinion was, and that they were going to follow the law, and there was nothing in the law preventing me from getting an FFL.
You Need Help?
If you search the internet for “home FFL,” you will be greeted by all manner and class of links, which will generally fall into a few categories. You will find discussion on various boards about the process and/or debate about getting an FFL. Next, you will find a few articles on the usual gun blogs with general information about the process. You will also find several companies offering “Home FFL Kits” and support. I wanted to check this out. I went with http://www.ffl123.com/. It was $40.00 for the basic kit, so I paid my 40.00 and away I went.
I found the site to be well organized, and it was easy to skip things I did not have questions about. The advice was helpful on several counts: what to expect in terms of dealing with the BATF interview, how to prepare and what paperwork the examiner would use for the interview.
Honestly, I think I could have done it without spending the $40.00, although the information gained was enough that I don’t regret the expenditure. I will update you on this impression as the process moves forward.
No interaction with the government would be complete without paperwork! So here you go.
- Application: https://www.atf.gov/file/61506/download
- Fingerprint card
- Certificate of Compliance: https://www.atf.gov/file/11776/download
- Passport Picture
- You can order paper forms here: https://www.atf.gov/distribution-center-order-form
An example copy of the 01 application can be found below.
I spoke with a friend who went through this process in 2012. He advised me that 6 months passed from the time he mailed in his paperwork, to the time the FFL was issued and official. I am sending my paperwork off on April 1st, 2016. This will make tracking the progress simple.
I will update you after the interview and receiving my FFL. Wish me luck!