FFL 07

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Larrysmachine
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FFL 07

Post by Larrysmachine »

Hi folks, I have a question. I just got my form 7 in and filled out. I have a small proto type machine shop and plan on doing some testing on suppressor designs. I see that the application fee is $150 but I don’t see anything about a license fee. I know that there has got to be more $ involved than that. Any info would be appreciated.
Larry
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Re: FFL 07

Post by Bendersquint »

Larrysmachine wrote:Hi folks, I have a question. I just got my form 7 in and filled out. I have a small proto type machine shop and plan on doing some testing on suppressor designs. I see that the application fee is $150 but I don’t see anything about a license fee. I know that there has got to be more $ involved than that. Any info would be appreciated.
Larry
The $150 IS the license fee to get your manufacturer's FFL only, allowing you to build handguns, shotguns and rifles ONLY.

Once you get your FFL approved and in hand you can submit your application to get your 02 manufacturers SOT tax stamp which will allow you to play with NFA goodies, thats another 500$ per year, possibly $1000 depending on the size of business you are licensing.

Don't forget ITAR(makes all the other licensing fees seem free!)

Don't forget all the local licenses you may need and state licensing and other permits you may need to conduct business.
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Re: FFL 07

Post by Larrysmachine »

Is it mandantory to redgister with ITAR if your not shipping out of the U.S
I would call the BATF but I went through six different people just to get my application sent to me.
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renegade
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Re: FFL 07

Post by renegade »

Larrysmachine wrote:Is it mandantory to redgister with ITAR if your not shipping out of the U.S
I would call the BATF but I went through six different people just to get my application sent to me.
It Is State Dept, NOT BATFE. In fact, has nothing to do with whether you have an FFL or not. Simple FlowChart determines if you need to register.

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Re: FFL 07

Post by Bendersquint »

renegade wrote:
Larrysmachine wrote:Is it mandantory to redgister with ITAR if your not shipping out of the U.S
I would call the BATF but I went through six different people just to get my application sent to me.
It Is State Dept, NOT BATFE. In fact, has nothing to do with whether you have an FFL or not. Simple FlowChart determines if you need to register.

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Renegade,

What are the exemptions of 121.1(b)? I don't see a list or anything in regards to exemptions.
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Bendersquint
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Re: FFL 07

Post by Bendersquint »

OK just found it, its not 121.1(b) its 122.1(b).
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Re: FFL 07

Post by renegade »

Yeah, I need to update that cause everybody asks me that. Glad you found them.
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Re: FFL 07

Post by Bendersquint »

Boils down to if you make anything with an SOT you are required if not R&D explicitly(meaning if its a can the second you transfer it outside your shop you are required to register!).

Here they are.....


(b) Exemptions. Registration is not required for:
(1) Officers and employees of the United States Government acting in an official capacity.
(2) Persons whose pertinent business activity is confined to the production of unclassified technical data only.
(3) Persons all of whose manufacturing and export activities are licensed under the Atomic Energy Act of 1954, as amended.
(4) Persons who engage only in the fabrication of articles for experimental or scientific purpose, including research and development.


If you do ANYTHING outside these lines guess who gets a check in the mail, DDTC!
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Re: FFL 07

Post by Larrysmachine »

Thanks for the replies, from what I see I can R&D cans and receivers all I want but once I have a design I want to machine and sell I have to register with ITAR. I know that I am preaching to the choir but it cost a lot of shop time which = $ to do this, paying the BATF fees I can live with but this ITAR stuff is BS. Kind of takes the wind out of the sails of a small MFG shop trying to expand and make a better living. But I guess this is their main strategy.
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Re: FFL 07

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Larrysmachine wrote:Thanks for the replies, from what I see I can R&D cans and receivers all I want but once I have a design I want to machine and sell I have to register with ITAR. I know that I am preaching to the choir but it cost a lot of shop time which = $ to do this, paying the BATF fees I can live with but this ITAR stuff is BS. Kind of takes the wind out of the sails of a small MFG shop trying to expand and make a better living. But I guess this is their main strategy.
You are preaching to the choir, but if you want to be in the business you have to pay the piper. This is not a cheap industry to be in.

Yes it is BS but when you have to get .gov permission to do stuff everyone wants their share of you money.

Its not their strategy at all, just means you have to come up with a worthwhile product and these fees keep crap products off the streets.

Just remember if you made anything R&D and transfer it off your bound book you need to pay the man, so no giving employees free of charge an experimental receiver or can etc.....
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Re: FFL 07

Post by Larrysmachine »

Hey thanks for the insight bindersquint, guess I will get the paper work rolling and see what my home state of Louisiana needs for their take and get stuff squared away with them also. I know you have to pay to play, I have owned and ran my shop for a long time doing proto type work for different industries involving specialized tooling and exotic materials. I have a few of my own Ideas that I would like to push forward on. I will picking ya'lls brain on some of the legalities
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Re: FFL 07

Post by Bendersquint »

Larrysmachine wrote:Hey thanks for the insight bindersquint, guess I will get the paper work rolling and see what my home state of Louisiana needs for their take and get stuff squared away with them also. I know you have to pay to play, I have owned and ran my shop for a long time doing proto type work for different industries involving specialized tooling and exotic materials. I have a few of my own Ideas that I would like to push forward on. I will picking ya'lls brain on some of the legalities
Give me a ring if you have questions,will be happy to help where I can.
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Re: FFL 07

Post by Armorer-at-Law »

Once you get your FFL approved and in hand you can submit your application to get your 02 manufacturers SOT tax stamp which will allow you to play with NFA goodies, thats another 500$ per year, possibly $1000 depending on the size of business you are licensing.

Note that the SOT fee is due every July 1st. So if you file your 02 SOT application now, you will owe another $500 on July 1, 2012. Depending on when you get your 07FFL, you may want to wait until July 1st to send in your SOT application this year.
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Re: FFL 07

Post by Bendersquint »

Armorer-at-Law wrote:
Once you get your FFL approved and in hand you can submit your application to get your 02 manufacturers SOT tax stamp which will allow you to play with NFA goodies, thats another 500$ per year, possibly $1000 depending on the size of business you are licensing.

Note that the SOT fee is due every July 1st. So if you file your 02 SOT application now, you will owe another $500 on July 1, 2012. Depending on when you get your 07FFL, you may want to wait until July 1st to send in your SOT application this year.
Thats a good point to bring up.

You can pay for the next year early and it will just get issued after July 1. I paid for this current year in March I believe. You definitely don't want a lapse in your SOT!
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Re: FFL 07

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I am in the process of applying for my 07 FFL followed by my Class 2 SOT as well. My main purpose is to buy and sell items that other manufactures produce (AAC, Knights, Noveske, etc.) but I plan on doing some R&D on my own cans and receivers over the next couple of years. If I come up with something that might have some commercial value I will register and pay the ITAR fee before I sell anything to the public. If this process takes 5 years then I will wait to register and pay the fee then and every year going forward.

Does anyone find any flaws in my logic?
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Re: FFL 07

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The Good Doctor wrote:I am in the process of applying for my 07 FFL followed by my Class 2 SOT as well. My main purpose is to buy and sell items that other manufactures produce (AAC, Knights, Noveske, etc.) but I plan on doing some R&D on my own cans and receivers over the next couple of years. If I come up with something that might have some commercial value I will register and pay the ITAR fee before I sell anything to the public. If this process takes 5 years then I will wait to register and pay the fee then and every year going forward.

Does anyone find any flaws in my logic?
Make sure you don't transfer a single item you make or make anything that leaves your shop even to another SOT and you are fine.

As soon as you repair a single gun you owe it as that qualifies as well. So no custom mounts or chambering a barrel etc... Even though they are considered gunsmithing activities and you don't need the 07/02 for it it is still a manufacturing activity and therefore you qualify to pay.
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Re: FFL 07

Post by renegade »

The Good Doctor wrote:I am in the process of applying for my 07 FFL followed by my Class 2 SOT as well. My main purpose is to buy and sell items that other manufactures produce (AAC, Knights, Noveske, etc.) but I plan on doing some R&D on my own cans and receivers over the next couple of years. If I come up with something that might have some commercial value I will register and pay the ITAR fee before I sell anything to the public. If this process takes 5 years then I will wait to register and pay the fee then and every year going forward.

Does anyone find any flaws in my logic?
You only have to register when you meet the requirements. For ITAR, you definitely want to do as much in a single year, and not drag it into other years if not necessary, to limit your exposure to those fees. Also be aware of the TTB excise tax rules to, those are 50 units a year max.
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Re: FFL 07

Post by The Good Doctor »

Bendersquint wrote:
The Good Doctor wrote:I am in the process of applying for my 07 FFL followed by my Class 2 SOT as well. My main purpose is to buy and sell items that other manufactures produce (AAC, Knights, Noveske, etc.) but I plan on doing some R&D on my own cans and receivers over the next couple of years. If I come up with something that might have some commercial value I will register and pay the ITAR fee before I sell anything to the public. If this process takes 5 years then I will wait to register and pay the fee then and every year going forward.

Does anyone find any flaws in my logic?
Make sure you don't transfer a single item you make or make anything that leaves your shop even to another SOT and you are fine.

As soon as you repair a single gun you owe it as that qualifies as well. So no custom mounts or chambering a barrel etc... Even though they are considered gunsmithing activities and you don't need the 07/02 for it it is still a manufacturing activity and therefore you qualify to pay.

I will take extra caution not to make anything that leaves the shop and will refrain from doing anything that is considered "manufacturing" untill I have something that will sell in enough volume to pay the fee.

What really pisses me off is not the $2,250 (I have the scratch for that) but that I may get something going here in my off hours and they may move the fee to $5,000, $10,000, or $15,00/yr down the road. At that point there will be a great deal of people that will need to reappraise their situation.
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Re: FFL 07

Post by The Good Doctor »

renegade wrote:
The Good Doctor wrote:I am in the process of applying for my 07 FFL followed by my Class 2 SOT as well. My main purpose is to buy and sell items that other manufactures produce (AAC, Knights, Noveske, etc.) but I plan on doing some R&D on my own cans and receivers over the next couple of years. If I come up with something that might have some commercial value I will register and pay the ITAR fee before I sell anything to the public. If this process takes 5 years then I will wait to register and pay the fee then and every year going forward.

Does anyone find any flaws in my logic?
You only have to register when you meet the requirements. For ITAR, you definitely want to do as much in a single year, and not drag it into other years if not necessary, to limit your exposure to those fees. Also be aware of the TTB excise tax rules to, those are 50 units a year max.

Thanks for the information. My real goal here is to sell a few guns and while I am making some money at that see if i can build a cool little can or some other item that people might like. I just want to avoid faying this BS fee/tax unless there is some money to be made from these items and it would be hard to keep my full time job if the State Department came after me. As long as I can do my R&D in the shop, not sell/"manufacture" anything, and not pay ITAR I am happy for now.

There are some people who say they have never, or will never pay the ITAR fee but life is just to good for me right now to take the risk of Hillary deciding that this would be an easy way to make some anti gun headlines. Hell, they got a boarder agent killed by trying to create some bad press for guns through "FAst and Furious" and the only reason that we have not seen a crackdown with ITAR is that some politicaly motivated person has not thought it through.....Yet. (Sorry for the rant just had to say it)
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Re: FFL 07

Post by Pagan »

So this ITARd stuff is for exporters only? I was thinking of starting up a small supressor business, just making 22 silencers for decent prices, and with the various ATF plus these Itar fees, it's like WTF.
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Re: FFL 07

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Pagan wrote:So this ITARd stuff is for exporters only? I was thinking of starting up a small supressor business, just making 22 silencers for decent prices, and with the various ATF plus these Itar fees, it's like WTF.
It is for all manufacturers, doesn't matter if you never export or not.
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Re: FFL 07

Post by watcher »

The unexpected repercussions of ITAR are being reviewed right now. This is election year - now is a good time to write to your politicians and explain that the legislative intent of 22 USC 2278 has been exceeded. Suggest they add their input to the review proceedings.

Extracted from 22 USC 2278:
" (1) In furtherance of world peace and the security and foreign policy of the United States, the President is authorized to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services. The President is authorized to designate those items which shall be considered as defense articles and defense services for the purposes of this section and to promulgate regulations for the import and export of such articles and services. The items so designated shall constitute the United States Munitions List."
The regulations as published have been improperly expanded to include the manufacture of items not intended for exportation. There was no mention whatsoever of "manufacturing" in the original legislation.
(b) Registration and licensing requirements for manufacturers, exporters, or importers of designated defense articles and defense services
(1)
(A)
(i) As prescribed in regulations issued under this section, every person (other than an officer or employee of the United States Government acting in an official capacity) who engages in the business of manufacturing, exporting, or importing any defense articles or defense services designated by the President under subsection (a)(1) of this section shall register with the United States Government agency charged with the administration of this section, and shall pay a registration fee which shall be prescribed by such regulations."

I am actually applying for my FFL07. Section 9 will read as "Manufacture of minor firearms parts. FFL07 required by ITAR regulations".
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Re: FFL 07

Post by Pagan »

Yes,including manufacturers in a business NOT importing or exporting seems to be beyond the intent of the ITAR garbage, talk about killing small businesses, man I hope Ron Paul can win in 2012!
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Re: FFL 07

Post by watcher »

Ron Paul is not going to win in 2012. Write to your present politicians, they are the people who have an interest in getting your vote. What they say to you may be double-speak but if only a small number of them ask the question of why manufacturing was included in the final legislation, against the directions of Congress, we might see some beneficial changes to the rules.
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Re: FFL 07

Post by Bendersquint »

Do you really think politicians will help us in releasing control and taxation of its minions? In this regards I highly doubt it, especially since the scope of it is a true revenue generator and understanding of what is out there and what could be exported. State Dept needs to know whats out there, regardless as to if the person making chips ever plans to export it.

Sending letters for clarification and trying to fight the systems only causes problems.

Example from the ATF....GEMTAX. If the manufacturer that caused it let it be we could still destroy tubes and replace at will, but you saw how that turned out.

The goal should be to get OFF the list not reinforce the need to be on it.

I am sure you have heard me say before that we are our own worse enemy especially people that are soon to be in the industry. They cause more problems than anyone!

Good luck on getting your FFL and lets just hope that we don't get a new ruling/law called "Watcher's Law".
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