I asked this on another forum, but I thought I'd try here too. How many rifles per year can a custom gunsmith make without paying the Federal Excise Tax as a manufacturer? Somewhere I heard that it was 50 but am not sure.
Thanks,
Blair

Small Manufacturers Exemptions
Q. What was the effect of the amendment to U.S.C. 4182 regarding the 50 gun exemption from Federal Firearms and Ammunition Excise Taxes?

A. As of October 1, 2005, any pistol, revolver, or firearm that was manufactured, produced or imported by a person who manufactures, produces or imports less than an aggregate of 50 such articles during the calendar year is now exempt from the tax.

Q. How does a manufacturer, producer or importer determine eligibility under the new 50 gun exemption?

A. A manufacturer, importer or producer qualifies for this exemption based on the number of firearms manufactured, produced and imported on a calendar year basis (January 1-December 31). For example, if Company “A†manufactures 20 firearms in Year 1 then it is exempt from FAET on all firearms it manufactures and sells in Year 1. However, if Company “A†manufactures 55 firearms in Year 2 then it is subject to FAET on all firearms sold in Year 2.

Q. How are controlled groups affected by the 50 gun exemption?

A. Since all persons that are a part of a controlled group of corporations will be treated as one taxpayer for purposes of this exemption, members of the group are only exempt from the tax if, collectively, they manufacture, produce or import less than 50 articles during the calendar year.

Q. Does the 50 gun exemption also apply to shells and cartridges?

A. No, it does not.

Q. May I apply this exemption to transactions that occurred prior to October 1, 2005?

A. No, you may not.


http://www.ttb.gov/firearms/faqs.shtml

ramrod,
Thanks! Just what I needed.
Blair

how dose the law work when your buying used actions to rebarrel and restock?
or if you are getting new bench rest actions to building on

I think that if you buy an action, whether it's used or new, and then build a rifle on it then you are the manufacturer of that rifle. If you make 51 or more per year then you need to pay the FET on each rifle. If you make 50 or less then you do not have to pay the FET. I think I'm correct in saying that if you make more than 50 new actions per year then you need to pay the FET on all the actions you make.

I have never understood this. If i take an action and put on a new scope mount, add a new stock, checker, blue it. Rechamber it, i am a manufacture.
Now if i go out and add big tires to the truck, smoke the windows, add pin stripping, beef up the motor, i am Not a manufacturer...go figure!

We're not big enough to fight it and win. The government needs our money and this is just another way for them to get it. Ever figure what you really pay in taxes? I mean what you REALLY pay after sales taxes, taxes on everything you own like cars and homes, food taxes, taxes on electricity, to name just a few. This all goes along with income taxes to state and federal agencies. I so sick of being taxed to half my income or maybe more I don't know what to do. I can understand why people try to avoid taxes, they gotta eat!

It's all about money and control, srtrax-- especially the control part. Guns are something that government loves to control. Cars are , too, but there are many more owners of cars than there are of guns...

A truely custom smith, doing metal work and wood work would have to be busting his rump to get out more than 50 cuctoms a year, and at the same time actually be doing first class work. I would think...

The folks who the tax boys targeted first were the bigger shops and action manufactures, then the AR builders. Anyone can build more than 50 ARs in a year. The Tax boys have an "administrative authority" giving them the virtually unsupervised ability to determine the definition of "manufacture". This ability to liberally interpret the law got several folks into trouble. The Tax boys made a determination that "significantly improving the value of a gun constituted manufacturing" in some jurisdictions the Tax boys made the decision of adding a new barrel was manufacturing because the new barrel significantly improved the firearms value. In the last two years the NSSF,NRA and a number of defendents have brought this issue to the congress and senate. There has been some relief and some oversite given to this issue.
Longshot

The number is not 50 for being exempt from the excise tax. The law refers to manufacture of LESS than 50 so the magic number is 49. Once you hit 50, you owe the excise tax for all of them produced that year.

"Recently, the President signed into law the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (Public Law 109–59, 119 Stat. 1144).
This act amends section 4182 of the IRC by adding a provision that exempts from the
tax any pistol, revolver, or firearm if it was manufactured, produced, or imported by a
person who manufactures, produces, or imports less than an aggregate of 50 of such
articles during the calendar year."

Here is a link.