Is an FFL required for buying complete rifle's and then parting them out?

[Bikepeddler]

Hello, I am trying to find a clear answer on whether or not it is legal to buy complete rifles and then sell all parts EXCEPT for the receivers, which is the only part that has the serial number in this instance. I would keep the receivers (the firearm portion) and never sell them.

The rifles in question are Surplus. I realize it is legal to deal in most all parts other than receivers for profit, but since the purchase includes a receiver and constitutes a firearm at the time of purchase I am a little confused. None of the sales would constitute a firearm.

I would be purchasing these C&R era rifles online and have them transferred through an FFL.

The goal is to create a hobby for myself and generate a little hobby income that would supplement my normal income and would be correctly reported to the IRS. I would not be dealing in any "assault rifles" or any "assault rifle" parts. It would not be economically feasible for me to undertake this hobby if an FFL is required, because I don't plan on making much profit, if any, which is why I am trying to sort this out.

The way I interpret the law is that if I were to buy and sell firearms with the intent to make a profit then an FFL would be required. However, I would be engaged in buying firearms and selling parts (not selling firearms). I would be buying firearms with the intent to make a profit, but I would not be selling firearms for profit, I would not be selling firearms at all, I would be selling parts for profit. Again I would be keeping the receivers for myself and never selling them.

I guess what is confusing to me is that I am buying firearms. Most other people selling parts I have seen are people who are buying parts to begin with. Does buying firearms to begin with confuse anything legally. Any advice or thoughts are greatly appreciated.

 

[G29SF]

Every firearm has a part that is classified as "the firearm". That part is what you should be concerned about. All the over pieces, nobody cares. The firearm piece, all rules apply. "The firearm piece" is a firearm. It makes no difference if the rest of the pieces are included or not.

 

[G29SF]

Sorry, I just reread and saw the "except the receivers" part. In that case, what you are selling is not firearms.

 

[BSA1]

What is your plan for the recievers/frames?

 

[Bikepeddler]

I would keep them at home, I would not be manufacturing firearms for personal use or for sale. The receivers would literally sit in a box and go unused.

 

[AlexanderA]

But the buying end of the business would involve complete firearms. If the intent is to conduct a regular course of business with the object of making a profit, then (IMO) an FFL is needed. The complete firearms would be logged into your "bound book" and then never logged out again. The parts would be sold, and the receivers would just pile up (presumably). What would you eventually do with the accumulated receivers?

But that's just my 2 cents' worth. You need to contact the ATF for a definitive opinion.

 

[Nickel Plated]

I would think no FFL is required.

But the buying end of the business would involve complete firearms. If the intent is to conduct a regular course of business with the object of making a profit, then (IMO) an FFL is needed.

An FFL is required if selling firearms. But let's take it a step further and say it's required if making a profit off the firearms, whether they are being sold or not.
In either case he would not be making profit off the firearms. The firearms is the receiver. Any other parts that may be attached to it are irrelevant. The thing is he's buying firearms and sticking them in boxes. No profit is made off the firearm. The profit is made off the parts attached to the firearm.

Does sound like kind of a waste of perfectly good receivers though.

 

[dprice3844444]

as long as he's not selling registered parts,no ffl is needed.fyi,just dispose of the receivers through an ffl.i would keep a log of where the receivers went just in case.if he was buying receivers,then assmbling them for sale,ffl needed.if legally buying guns,stripping them,and selling parts,no.

 

[vamo]

I would be purchasing these C&R era rifles online and have them transferred through an FFL.

Why not just get your FFL then? Seems like the money saved on transfer fees would more than make up for the application fee.

As a side note not sure about the legality of doing this with a C&R.

 

[Bikepeddler]

dprice384444: "just dispose of the receivers through an ffl"

Do you mean sell them to the the FFL or give them to the FFL? How would this be legal, I would be making a profit from the sale of a firearm.

And I would rather not dispose of them. I would rather keep the receivers here and registered in my name.


Vamo: I have an attractive rate with my FFL for doing transfers. I have no plans to mess with a storefront and all other requisites to get an FFL. Selling C&R parts for profit would only be a problem if I had a Type 3 FFL which does not allow type 3 holders to buy and sell C&R rifles with the express intent to make a profit.

 

[NavyLCDR]

I would rather keep the receivers here and registered in my name.

Which state requires registration of C&R eligible rifles?!?

 

[bearcreek]

I was wondering that as well. In Ohio there is no registration of any firearms accept, of course, NFA stuff.

 

[Carl N. Brown]

I could give my opinion....

What is important is not my opinion: it is the ATF's interpretation of the law on being in the business of dealing in firearms. I would query ATF and get an opinion in writing for CYA.

If buying guns to sell parts, why keep the receivers? A lot of repeat purchases of firearms on 4473s from FFLs beyond what would be expected for personal use could raise a flag that one is indeed buying guns for resale (dealing w/o license) or buying for other persons (straw purchase, falsifying actual buyer on a 4473).

 

[Midwest]

Which state requires registration of C&R eligible rifles?!?

I believe the only state that requires registration of rifles is Hawaii.

I think the law was changed in California to where rifles now have to be registered too...but not entirely sure...

 

[Bikepeddler]

I worded that poorly. I just meant if my FFL is transferring these rifles to me then if I keep the receivers I will be able to justify my actions to the ATF that I am not selling firearms if they inquire about my large amount of 4473 activity.

 

[wildbilll]

If they inquire about your activity purchasing firearms, you could tell them you buy guns because you like them.

As far as what you do with your guns once you own them, that is your business.
Usually the firearm is the "receiver" but there are a few guns out there that depart from that norm.

 

[mgmorden]

My personal opinion (which is to be taken with a grain of salt) is that if you're buying the guns with the intention of making a profit, then they'll consider that to be engaging in the business of buying and selling - even if you are not selling the receivers.

You might think you've found a "loophole", but the ATF and/or a Judge might not see it the same way.

You'd be better served by asking a lawyer though. Do you really want risk being arrested or not based on Internet forum advice?

 

[dprice3844444]

you are not rebuilding for profit.nothing says you cannot buy guns legally through channels,strip them,and sell the parts.by disposing of the receivers through an ffl,it dumps any legality on them for backround checks,etc.just keep an incoming/outgoing log of the receivers in case of atf trace info.

 

[Neo-Luddite]

OK--You're getting into perhaps not illegal areas but certainly interesting ones. Your best bet would be to run your idea for a hobby business by the ATF before going ahead. Parts kits imported as such no longer come with barrels of foreign origin--this might be an area of concern for what you propose to mention just one potential legal snag.

For me the question is not legality but rationality; why would you go to the trouble of taking an otherwise intact weapon down to parts for sale unless the weapon was somehow unsafe to use as it was???? I'm not getting where the upside is to this---or any real profit for that matter. And this is setting apart for the moment the 'ethics' of breaking down intact historically significant C&R weapons~and that though makes me cringe as a C/R collector.

 

[AlexanderA]

I'm not getting where the upside is to this---or any real profit for that matter.

This business model would work if the parts (as parts) could be sold for more than the complete gun. The assumption here is that the complete gun is pretty much a junker, and that the parts could be spruced up through refinishing, cleaning, or otherwise. Also, it's assumed that there would be an acceptable turnover of the parts, and that long-term warehousing (tying up capital) wouldn't be a problem. Note that not all parts -- even of the same gun -- are equally desirable.

Several businesses do this already: Numrich, Sarco, Springfield Sporters to name a few. But they have huge warehouses, low overhead, and an established (although mixed) reputation. Nevertheless I often wonder how they stay in business.

 

[dogtown tom]

wildbilll .....As far as what you do with your guns once you own them, that is your business......

Sure it is.
And if ATF believes you to be buying guns with the intent to resell.....that's engaging in the business of dealing in firearms. Suddenly it not just "your business", but theirs as well.

 

[dogtown tom]

AlexanderA Quote:
I'm not getting where the upside is to this---or any real profit for that matter.

This business model would work if the parts (as parts) could be sold for more than the complete gun. The assumption here is that the complete gun is pretty much a junker, and that the parts could be spruced up through refinishing, cleaning, or otherwise. Also, it's assumed that there would be an acceptable turnover of the parts, and that long-term warehousing (tying up capital) wouldn't be a problem. Note that not all parts -- even of the same gun -- are equally desirable.

Several businesses do this already: Numrich, Sarco, Springfield Sporters to name a few. But they have huge warehouses, low overhead, and an established (although mixed) reputation. Nevertheless I often wonder how they stay in business.

Add me to the not getting it list.
If the gun was worth more as parts there would already be businesses cannibalizing complete guns for their parts.

Numrich, Sarco, etc turn a profit because they DON"T buy their parts guns at retail.

 

[Bikepeddler]

I suppose I will send the ATF a letter with my intentions and see what they say.

But at the end of the day the law seems pretty explicit that an FFL would be required if I:

"profit through the repetitive purchase and resale of firearms"

The "and" is a powerful word in that sentence. Since I will not be reselling firearms with the intent to make a profit, I do not meet the criteria for being a dealer in firearms. I will be keeping the firearms portion (receiver only for these particular firearms) for my own personal ownership of them. The parts I plan on selling are just "parts" and in no way constitute a firearm.

You guys don't have to "get it" why I plan on doing this. I made this post looking for interpretations of the legality, lets stay on topic.

 

[Romeo 33 Delta]

The firearm you are buying will have to go through an FFL (either your own or that of another dealer) with a background check, unless it's an antique.

What you do with the PARTS (everything except the receiver) does not require an FFL because, regardless of your selling them for profit ... the PARTS are NOT FIREARMS.

If you're going to just store the receivers and not sell them ... again, you are NOT dealing in firearms. If you do sell a receiver ... that might get you close to ugly because by your own admission, "you are buying and selling with the intent to make a profit".

Just my 2 cents worth.

 

[Neo-Luddite]

Blue skies, green lights!!!