BATF Broadly Redefines "Manufacturer"

18 August 2008, 09:49

This is going to make your day...

quote:
U.S. Department of Justice
Bureau of Alcohol, Tobacco,
Firearms and Explosives
Firearms Technology Branch
August 15, 2008
Martinsburg, West Virginia 25405
www.atf.gov
Manufacturing of Firearms

Below are examples of operations performed on firearms and guidance as to
whether or not such operations would be considered manufacturing under the Gun
Control Act (GCA). These examples do not address the question of whether the
operations are considered manufacturing for purposes of determining excise tax.
Any questions concerning the payment of excise tax should be directed to the
Alcohol and Tobacco Tax and Trade Bureau, U.S. Department of the Treasury.

Generally, a person should obtain a license as a manufacturer of firearms if the
person:

1) is performing operations that create firearms or alter firearms (in the
case of alterations, the work is not being performed at the request of customers,
rather the person who is altering the firearms is purchasing them, making the
changes, and then reselling them); 2) is performing the operations as a regular
course of business or trade; and 3) is performing the operations for the purpose of
sale or distribution of the firearms.

1. A company produces a quantity of firearm frames or receivers
for sale to customers who will assemble firearms.

The company is engaged in the business of manufacturing firearms and should be
licensed as a manufacturer of firearms.

2. A company produces frames or receivers for another company
that assembles and sells the firearms.

Both companies are engaged in the business of manufacturing firearms, and each
should be licensed as a manufacturer of firearms.

3. A company provides frames to a subcontractor company that performs
machining operations on the frames and returns the frames to
the original company that assembles and sells the completed firearms.

Both companies are engaged in the business of manufacturing firearms and
should be licensed as manufacturers of firearms.

4. A company produces barrels for firearms and sells the barrels
to another company that assembles and sells complete firearms.

Because barrels are not firearms, the company that manufactures the barrels is not
a manufacturer of firearms. The company that assembles and sells the firearms
should be licensed as a manufacturer of firearms.

5. A company receives firearm frames from individual customers,
attaches stocks and barrels, and returns the firearms to the
customers for the customers' personal use.

The operations performed on the firearms were not for the
purpose of sale or distribution. The company should be licensed as a dealer or
gunsmith, not as a manufacturer of firearms.

6. A company acquires one receiver, assembles one firearm, and
sells the firearm.

The company is not manufacturing firearms as a regular course
of trade or business and is not engaged in the business of
manufacturing firearms. This company does not need to be licensed as a
manufacturer.

7. An individual acquires frames or receivers and assembles
firearms for his or her personal use, not for sale or distribution.

The individual is not manufacturing firearms for sale or distribution and is not
required to be a licensed manufacturer.

8. A gunsmith regularly buys military-type firearms, Mausers, etc., and
â€œsporterizesâ€ them for resale.

The gunsmith is in the business of manufacturing firearms and should be licensed
as a manufacturer.

9. A gunsmith buys semiautomatic pistols and modifies the slides to accept a
new style of sights. The sights are not usually sold with these firearms and
do not attach to the existing mounting openings. The gunsmith offers these
firearms for sale.

This would be considered the manufacturing of firearms, and the gunsmith should
be licensed as a manufacturer.

10. A gunsmith buys government model pistols and installs â€œdrop-inâ€ precision
trigger parts or other â€œdrop-in partsâ€ for the purpose of resale.

This would be considered the manufacturing of firearms, as the gunsmith is
purchasing the firearms, modifying the firearms, and selling them. The gunsmith
should be licensed as a manufacturer.

11. A gunsmith buys surplus military rifles, bends the bolts to accept a
scope, and then drills the receivers for a scope base. The gunsmith
offers these firearms for sale.

This would be considered the manufacturing of firearms, and the gunsmith should
be licensed as a manufacturer.

12. A gunsmith buys surplus military rifles or pistols and removes the stocks,
adds new stocks or pistol grips, cleans the firearms, then sends the firearms
to a separate contractor for bluing. These firearms are then sold to the
public.

This would be considered manufacturing of firearms, and the gunsmith should be
licensed as a manufacturer.

13. A company purchases surplus firearms, cleans the firearms, then offers them
for sale to the public.

The company does not need to be licensed as a manufacturer.

14. A company produces firearms or firearm receivers and sends the
firearm/receivers out for colorizing (bluing, camouflaging, phosphating, or
plating) and/or heat treating. Do the companies performing the colorization
and/or heat treating need to be licensed as manufacturers, and are the
companies required to place their markings on the firearm?

ATF has determined that both colorization and heat treating of firearms are
manufacturing processes. The companies performing the processes are required
to be licensed as manufacturers. If the companies providing colorization and/or
heat treating have not received variances to adopt the original manufacturerâ€™s
markings, they would be required to place their own markings on any firearm on
which they perform the manufacturing process of colorization and/or heat
treating.

http://www.atf.gov/firearms/firearmstech/081508manufacturing-of-firearms.pdf

18 August 2008, 17:28

matt salm

quote:
A company receives firearm frames from individual customers,
attaches stocks and barrels, and returns the firearms to the
customers for the customers' personal use.

The operations performed on the firearms were not for the
purpose of sale or distribution. The company should be licensed as a dealer or
gunsmith, not as a manufacturer of firearms.

So as long as the customer buys an action through you before you commence work on it, the standard 01 FFL should suffice?

18 August 2008, 18:50

Toomany Tools

I was given this ruling by one of our local agents during an annual inspection back in April. He insisted I was "manufacturing" firearms and since my license was due to renew in August I went a head and applied for the "07" Manufacturer's license. This is all part of the BAFTE's strategy to reduce the number of dealers. A few years ago someone in Congress got up and made a claim that "...there are more gun dealers in the US than gas stations" and that put pressure on BATFE to work to reduce dealers. I asked the local agent if the changes had actually reduced the number of folks with licenses and he said it hadn't; he was doing more license application inspections of "kitchen table" dealers than he ever had. Call me a cynic but this is just more government bullshit.

The other component of this is the collection of excise tax...we must not forget Uncle Sam's bills. Manufacturer's who produce 50 or fewer firearms, as defined by BATFE, are exempt but still have to file a form once a year.

18 August 2008, 18:52

yeti

This guidance is forcing nearly all gunsmiths to become manufacturers.

18 August 2008, 19:31

ForrestB

My read is that if a gunsmith is customizing a customer's rifle, he's not a "manufacturer". However, if a gunsmith makes exactly the same customization on a spec rifle, he then becomes a "manufacturer".

#14 makes it sound like a guy doing bluing jobs only (even on customers' firearms) is now a "manufacturer".

18 August 2008, 19:54

Michael Robinson

MY COMMENTS BELOW IN [RED]:

9. A gunsmith buys semiautomatic pistols and modifies the slides to accept a new style of sights. The sights are not usually sold with these firearms and do not attach to the existing mounting openings. The gunsmith offers these firearms for sale.

This would be considered the manufacturing of firearms, and the gunsmith should be licensed as a manufacturer. [THIS IS RIDICULOUS. ADDING SIGHTS IS "MANUFACTURING"? NO. THIS IS WHAT IS CALLED GUNSMITHING. WHERE DOES THIS END?]

10. A gunsmith buys government model pistols and installs â€œdrop-inâ€ precision trigger parts or other â€œdrop-in partsâ€ for the purpose of resale.

This would be considered the manufacturing of firearms, as the gunsmith is purchasing the firearms, modifying the firearms, and selling them. The gunsmith should be licensed as a manufacturer. [SEE ITEM 9 ABOVE. APPARENTLY IT NEVER ENDS.]

11. A gunsmith buys surplus military rifles, bends the bolts to accept a scope, and then drills the receivers for a scope base. The gunsmith offers these firearms for sale.

This would be considered the manufacturing of firearms, and the gunsmith should be licensed as a manufacturer.[NO. THIS IS WHAT IS CALLED A GUNSMITH/DEALER, NOT A MANUFACTURER.]

12. A gunsmith buys surplus military rifles or pistols and removes the stocks, adds new stocks or pistol grips, cleans the firearms, then sends the firearms to a separate contractor for bluing. These firearms are then sold to the public.

This would be considered manufacturing of firearms, and the gunsmith should be licensed as a manufacturer. [SEE ITEMS 9 AND 10 ABOVE RE: THIS APPARENTLY NEVER ENDING.]

13. A company purchases surplus firearms, cleans the firearms, then offers them for sale to the public.

The company does not need to be licensed as a manufacturer.[HALLELUJAH!]

14. A company produces firearms or firearm receivers and sends the firearm/receivers out for colorizing (bluing, camouflaging, phosphating, or plating) and/or heat treating. Do the companies performing the colorization and/or heat treating need to be licensed as manufacturers, and are the companies required to place their markings on the firearm?

ATF has determined that both colorization and heat treating of firearms are manufacturing processes. The companies performing the processes are required to be licensed as manufacturers. If the companies providing colorization and/or heat treating have not received variances to adopt the original manufacturerâ€™s markings, they would be required to place their own markings on any firearm on which they perform the manufacturing process of colorization and/or heat treating. [BLUING IS MANUFACTURING? AGAIN, THIS IS SIMPLY RIDICULOUS.]

[ONE OR TWO "MANUFACTURING PROCESSES" DOES NOT EQUATE TO MANUFACTURING. THIS IS NOT EVEN CLOSE TO THE PROPER USE AND INTERPRETATION OF THE ENGLISH LANGUAGE. THE COMPANY THAT IS THE PRIME CONTRACTOR IN THE PROCESS OF BUILDING THE FINISHED FIREARM IS THE MANUFACTURER, NOT VIRTUALLY EVERY SUBCONTRACTOR, GUNSMITH OR OTHER SERVICE PROVIDER ALONG THE WAY. WHAT A BUREAUCRATIC OVER-REACH! ONE WOULD HOPE THAT THE NRA WILL JUMP ON THIS FAST.]

18 August 2008, 20:24

gunmaker

quote:
Originally posted by ForrestB:

ATF has determined............................

BASED ON WHAT LAW?????

My guess:
Based on a very loose interpretation of an interpretation of a RULING.

What exactly is a ruling?
Does this mean rule of law?
Who has the power to make laws?

When I moved here and amended my license, my local govt. guy told me that if I wasn't making a serial # part then I was considered a gunsmith and should change my license to a type 01.

"American Rifleman" had an article a few months back that lightly addressed this topic. They have been doing some digging. I'd bet that if a few million NRA members called or wrote in now, there would be a little pressure put on lawmakers who are looking to get re-elected.

18 August 2008, 20:57

500grains

I thought a "firearm" was defined by statute as the "receiver". If so, the process of manufacturing the firearm is complete when the receiver has been made, or at least that seems logical. Adding sights to a slide is not a step in manufacturing the receiver, and shouldn't be regulated as such. Nor is screwing a barrel into a receiver a step in manufacturing the receiver. Bluing the receiver is a step in finishing the receiver, but it is not a step in manufacturing the receiver. Much the same as painting a house, while desirable, is not necessary for it to be a house.

Likewise, drilling and tapping a receiver for scope mounts is merely modifying an existing completed receiver which is already usable as a firearm, not a step in manufacturing a firearm.

That's my personal take, but apparently not what the law is.

18 August 2008, 21:23

gunmaker

Replace the word firearm with the word car and the related gun accessories, finishes and gunsmith with car accessories, painting and mechanic to see how far out of bounds this really looks.

Both items have serial #s
Both items have dealers
Both items have repairs
Both items have upgrades (aftermarket parts)
Both items have finishing specialists
both items have manufacturers

Next they'll say that checkering is manufacturing. I'm surprised they didn't try and slip that one in there.

Election year guys....................

18 August 2008, 21:31

DArcy_Echols_Co

Many years ago I wrote the legal branch of the BATF and told them exactly what I did to "Build" a rifle. At that time the reply was 4 pages long and regardless if I or the client supplied the action what I did to the action/project to complete a major project, i.e. barrel, stock, blue and in ay manner customize and action made me a Manufacture. Since then the definition has changed and become more inclusive. We have had an 07 manufactures license for many years and did pay quarterly excise tax for each rifle we produced when applicable. Now with the excise law modified in our favor we no longer take a tax bite every time we turn one around. You can try to interpret the BATF stance until your blue in the face but will find your local BATF agent/inspector to follow the guide lines to the letter.I know this for a fact as we have had them drop by to look at our books recently. You can piss and moan all you like but it is what it is. Like it or not if you want to be in business and "Build Rifles" it's a cross you'll have to bare.

18 August 2008, 22:23

matt salm

So what exactly are the requirements of the 07 manufacturers license as far as records, filings, etc....? Also, does it alow for buying and transfering firearms as a regular 01 dealer? I guess I'll look it up myself, but I'm curious to learn what is done differently from those that have one.

Thanks

18 August 2008, 23:23

Toomany Tools

As far as I know, I've only had the 07 license for a month, the only paperwork I have to do is an annual excise tax report. Buying and selling is exactly the same as an 01 license, and the 07 license is $50 cheaper.

19 August 2008, 00:46

gunmaker

The type 07 has to file a report to the batf called
ANNUAL FIREARMS MANUFACTURING AND EXPORTATION REPORT.

The deadline for this last report was July 15,2008. Usually the deadline is April 1.

This report has nothing to do with excise tax. Excise tax is now collected by the TTB branch. They have no connection to the batf.

The report has instructions on the on the back. Here's a contradiction to the letter posted at the top of this thread.

item 2
(a) Production...blaa blaaa blaaa.............
.................................
Please see exceptions noted in instruction number three.

3.
(e) Firearms incorporating frames or receivers of foreign manufacture or

(f) Firearms remanufactured or customized and previously in the possession of nonlicensees.

As far as the manufacturing report goes they don't consider much of what is included in the first post as manufacturing. Because it's not. They want to know how many serial # parts get into private hands. Think how screwed up the count for # of guns in the US would be if every time you got a new set of "tires" or "paint job" the count went up. Think how the wacko left would use the new "unexplained" dramatic increase in # of guns to promote their anti gun policies.

When I was amending the address of my license I talked with the firearms technology branch and they also told me that I only need to keep my type 07 license if I make a serial numbered part. I kept the type 07 but haven't made any receivers from scratch.

The manufacturers license (type07) allows you to do everything that a (type01) dealer can along with manufacturing receivers and ammunition. IT DOES NOT ALLOW YOU TO MAKE NFA WEAPONS.

19 August 2008, 01:18

matt salm

That's what came to my mind when thinking about this. Say I buy an action from Stiller. Didn't they already submit that action as a manufactured firearm???? Why in the hell would I now submit another one when I complete it into a rifle. OR for that matter a Pre-64 Model 70 or whatever. It doesn't make sense to submit manufacturing a firearm that has already been reported....

19 August 2008, 05:43

Alberta Canuck

quote:
Originally posted by matt salm:
That's what came to my mind when thinking about this. Say I buy an action from Stiller. Didn't they already submit that action as a manufactured firearm???? Why in the hell would I now submit another one when I complete it into a rifle. OR for that matter a Pre-64 Model 70 or whatever. It doesn't make sense to submit manufacturing a firearm that has already been reported....

IMHO, some of you guys really don't understand the real-world function of "government" It is NOT to:

arrange the affairs of law and trade so they "make sense", nor

to make life easier or safer for citizens, nor

to preserve human rights generally or individual rights specifically, nor

to fuction in an understandable, open, democratic manner.

The function of government is and always has been, to gather control, and thus, POWER to the hands of the "elite", whether elected, designated by God, or self-appointed.

That's why the world has always had periodic major revolutions in EVERY country...and still needs one about every three generations. History has shown that most countries average about that frequency of them, and that we may be 'way overdue.

19 August 2008, 06:23

Mike Smith

So, what happens if I "manufacture" ie build or modify a rifle for myself and decide to sell it at some future date? Does all this legalize apply at that point? Is there a holding period?

19 August 2008, 06:35

srtrax

Go figure! I just sent my renuwal in for the 01 a month ago. Check has been cashed, and i'm certain the licence is on its way. Anyway...

I wonder if one could get multiple licences like the 01 and 07 just to cover ones arss?

19 August 2008, 17:24

skb

You can hold multiple licenses, I do. I have an 01 license and am also a licensed importer. I'll get a manufacturers license after my 01 expires. I think the BATF legal rulings are getting stranger all the time, this on top of the ruling regarding importing sporterized Mausers. Very odd indeed.
Steve

19 August 2008, 19:28

tnekkcc

The BATF has a history of wild interpretations and then loosing in court.

The best way to keep track is to subscribe to "Small Arms Review" magazine.

http://www.smallarmsreview.com/

When I was subscribing a decade ago, I remember that the Contender rifle was a pistol if you had parts to make it a pistol. If there was an illegal way to assemble a firearm, the law was broken. The court ruled that if there was a legal way to assemble them, then it was legal.

That kind if bickering goes on all the time.

20 August 2008, 00:17

J Wisner

OK, so now that Coloration is manufactuering, just who is BATFE going to pursue about Iron Oxide.

I would like to be there when Mother Nature writes the check for the License.

Or since the State you live in owns the rain in the sky are they going to buy the License.

Just my 2 cents.

James Wisner
Custom Metalsmith

20 August 2008, 01:06

2152hq

DArcy Echols Co post pretty much sums up the situation when it comes to dealing with this and the excise tax issue. They make the 'ruling' or interpretation of the language of the laws in effect and they stand till otherwise changed by a court challenge or legislation. It is all about the money, a source of tax revenue and they want it. I'd think it'd be a difficult argument for someone to post a sign up as a GunMaker or GunBuilder and then say 'I don't make guns'. However some of the narrow manufacturing deffinitions given here are almost laughable. Constantly redefining what is already defined in the law for the purpose of collecting a tax is certainly not new. Slightly off topic but still related is to
look what happened to John Bivins re: unpaid excise tax on the manufacture of firearms. It was decided that his Pennsylvania bi-Centennial longrifles were 'firearms' and subject to the excise tax. He fought it and eventually lost in court some years ago. I don't think he ever really recovered from that experience financially or otherwise..Now I believe the number produced would fall under the minimum required for payment of the tax. Everchanging rules.