What is a Federal Firearms License (FFL)?

FFL's and FFL Dealers Explained

A Federal Firearms License is a federal government permit to buy, sell and trade firearms and ammunition. An FFL is issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives, BATFE but more commonly called the BATF or ATF.

The BATF issues several different kinds of licenses for firearms and ammunition. Each license grants permissions and has restrictions.

IMPORTANT TERMS

Before explaining what each license is, defining some common terms will be helpful in understanding the licenses. In alphabetical order, these words are:

Antique Firearm

BATF carves out an exemption for antique firearms where licenses are concerned. No license is needed to sell these and buyers are not subject to a federal background check.

“Antiques” found occasionally that would otherwise be modern firearms are the 11 gauge shotgun and the .41 Swiss rimfire rifle. These fit the BATF definition because:

A) They are no longer manufactured.

B) No one makes commercial ammunition for them.

In general, BATF also says antique firearms were made before 1898. This is not a hard rule. The Springfield .45-70 Government Trapdoor, even if made in 1873, is a modern firearm because ammo is readily available.

Class 2

Class 2 weapons are restricted.

Class 2 items are sometimes mistakenly called Class 3 weapons. That is because of a federal requirement that Class 2 dealers and manufacturers have a Special Occupational Tax (SOT) permit. The Occupational Tax is defined below.

A civilian must buy a one-time $200 “tax stamp” to possess any Class 2 item (explained below) except an AOW (defined below). An AOW “tax stamp” is $5. Some states restrict Class 2 items. The appropriate tax stamp must be paid any time a Class 2 is sold.

Where class 2 items are concerned, most people think of machine guns, which is true, but Class 2 weapons fall into six different categories:

1) Machine guns. These are full-auto firearms. They may be magazine-fed or belt-fed. Submachine guns are a subcategory.

The 1986 “Firearm Owners Protection Act” banned the manufacture and import of full-auto firearms for the civilian market. Full-auto is still made for the military and law enforcement. Only full-auto guns made before the Act became law are legal for civilian purchase, so the supply of these firearms is fixed.

2) SBR. Short-barreled rifle. Any shoulder-mounted rifle with a barrel shorter than 16 inches. You can get an AK74-style handgun with a 10-inch barrel and a pistol grip. This is legal, only if the receiver never had a shoulder stock mounted to it. Mounting a shoulder stock to this weapon turns it into an SBR and requires the BATF tax stamp. A forearm brace on a handgun does not make it an SBR under current BATF rules.

3) SBS. Short-barreled shotgun. This is a shoulder-mounted shotgun with a barrel length of less than 18 inches. BATF recently approved a short-barrel shotgun without requiring the $200 or the $5 tax stamp. The ruling is:

  • The finished receiver never had a shoulder stock mounted to it.
  • A pistol grip is attached.
  • A barrel is attached.
  • The overall shotgun must also be at least 26 inches long.

Taking a regular shotgun with a shoulder stock, putting on a pistol grip and barrel less than 18 inches long is not the same thing. Doing this turns the shotgun into an SBS and requires paying the BATF $200 for a National Firearms Act manufacturing tax stamp.

4) Suppressors. Also called cans or silencers, these are devices that reduce the sound of the gun firing. This is not a weapon, but it is still listed under the Class 2 section of firearms laws.

5) AOW - Any Other Weapon. An umbrella gun is an example of an odd AOW. Making an AOW requires the maker to pay the $200 tax stamp fee to the BATF. Once made, an AOW can be transferred by paying a $5 BATF permit fee.

The BATF definition of an AOW is confusing. Off The Grid News clears it up in a piece about AOWs.

The article says in part, “In plain English, what the BATF is saying is that a smooth bore shotgun that is capable of being concealed upon the person, and cannot be fired from the shoulder is an AOW! So why then is an ordinary short-barreled shotgun, i.e. a shotgun with a barrel length of under 18” a restricted weapon?… [A] short-barreled shotgun has a shoulder stock and is designed to be fired from the shoulder. An AOW is the exact same weapon, but with no shoulder stock, and is not designed to be fired from the shoulder… We know, it sounds ridiculous, but such is federal law at times.”

6) Destructive Devices. In general, a destructive device has a bore of more than a half-inch. The BATF makes exceptions from time to time for sporting firearm purposes.

For instance, a 12 gauge shotgun has a nominal bore of .73 inches. The 10 gauge shotgun has a .775-inch bore.

Several dangerous game class firearms are also larger. A few are the .577 Tyrannosaur, the .50 BMG with a bore of .510 and the .600 and .700 Nitro Express.

One of the most famous sporting exceptions is the JDJ .950 by SSK Industries.

Firearm

“The term ‘firearm’ means (A) any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive; (B) the frame or receiver of any such weapon; (C) any firearm muffler or firearm silencer; or (D) any destructive device,” says US Code Section 921.

National Firearms Act

The NFA was passed in 1934 and was the first federal law to create categories of firearms and put ownership restrictions on certain firearms, especially the full auto ones.

Important updates:

  • 1968. Age limits were placed on gun purchases for the first time. The new law also removed the provision for a person to register a previously unregistered Class 2 device. As author Ben Baker reports in his book, "The Truth About Gun Control", this law also required serial numbers on all firearms manufactured under a federal permit. The exception to the serial number requirement is when a private citizen makes a firearm for his own use. While not required, the BATF recommends a serial number anyway.
  • 1986. The Firearm Owners Protection Act was passed. This effectively stopped the production of machine guns for civilian use in the United States.
  • 1998. The National Instant Criminal Background Check System was implemented.

Special Occupational Tax

The Occupational Tax can be a Class 3 or Class 2. It is often called a permit and is added to another Federal Firearms License. With Class 3, a Type 01 FFL holder can sell and transfer NFA items. A Type 07 FFL holder gets a Class 2 Occupational Tax which allows the holder to make, sell and transfer these items.

The tax is $500 per year for a business with gross receipts under $500,000 a year and $1,000 a year for businesses making more than that.

Class 2 weapons manufacturers can make a machine gun for demonstration purposes or for the military or law enforcement. If the maker ever loses or does not renew the manufacturing license, any full-auto firearms made under the permit must be surrendered or sold to the government or law enforcement.

The BATF will not grant a license to make full-auto firearms unless the person applying can prove a viable market and a demand for the firearm.

Primitive weapon

A primitive firearm weapon for FFL purposes is a muzzleloader that uses black powder or a modern equivalent. These are not generally regulated by the BATF. No license is needed to buy or sell a black powder firearm. No federal background check is needed to buy one, but some states may regulate these firearms.

Given the definition of destructive devices above, some people ask if cannons are regulated by the BATF. In a word, no. "Muzzleloading cannons not capable of firing fixed ammunition and manufactured in or before 1898 and replicas thereof are antiques and not subject to the provisions of either the Gun Control Act (GCA) or the NFA," says a BATF information web page.


LICENSE TYPES

The BATF has nine FFLs in all. Each license allows the person holding it to engage in firearms and ammo dealing but has restrictions and permissions often unique that particular license.

A license is only good for the listed location on the license. Someone who has two places to sell firearms must have a separate license for each location.

The licenses are:

  • Type 01 FFL - Firearms dealer and gunsmith
  • Type 02 FFL - Pawnbroker
  • Type 03 FFL - Collector Curios and Relics. This is often nicknamed Cruffler.
  • Type 06 FFL - Ammo manufacturer.
  • Type 07 FFL - Firearms and ammo manufacturer
  • Type 08 FFL - Firearms and ammo importer
  • Type 09 FFL - Destructive devices dealer.
  • Type 10 FFL - Manufacturer of destructive devices, ammo for said devices and armor piercing ammo
  • Type 11 FFL - Importer of everything listed in Type 10

Click Here for a Complete Listing of FFL Dealers Near You!


The BATF does not have a Class 04 or 05 license.

TYPE 01 FFL

This is the most common type of firearms license. Sporting goods stores, gun stores, hardware stores that sell guns and home dealers have this license. They can buy and sell firearms across state lines through the FFL transfer system. A gunsmith can receive and ship guns across state lines to the original owner.

If a civilian can own the gun without a special permit or a tax stamp, a Type 01 FFL holder can sell it.

Some people get a Type 01 FFL and operate out of their home. These “home-based FFLs” are subject to the exact same reporting and security requirements as a sporting goods store.

The initial application fee is $200. The license renews every three years for $90.

TYPE 02 FFL

This license is the same as Type 01 FFL, except it is for pawn shops. Pawn shops often have extra reporting requirements under local ordinances.

The initial application fee is $200. The license renews every three years for $90.

TYPE 03 FFL

The Type 03 FFL or Cruffler license is an exception to the other FFLs. The other FFLs are a license to deal in firearms and ammo with the express purpose of making money, a business in other words. The Type 03 FFL is not meant for a business. It is for a collector and his personal collection.

The Cruffler allows a person to buy, sell and trade firearms that are at least 50 years old or are designated a Curio or Relic by the BATF. These sales do not have to go through any other FFL dealer.

Sales can be done across state lines. If a Cruffler holder buys a gun with the license from someone in another state, it must be shipped to the address on the license. This is almost always the license holder’s home.

The Cruffler is not meant to be a profit-making license, but the BATF allows owners to buy and sell to make money occasionally. Record keeping for a Cruffler is different and simpler than the other licenses. A Cruffler holder may sell a gun to someone without that buyer going through a background check, but the license holder must record ID information about the buyer.

The BATF cautions Cruffler holders to us discretion when selling a firearm under the Type 03 FFL. If the license holder has any reservations or doubts about the buyer's ability to legally own a firearm, the sale must be rejected.

For the other licenses, a BATF agent will personally interview the applicant. Interviews are rare for a Type 03 FFL. Inspections are common for other FFL dealers, but rare for a Cruffler.

A Cruffler holder cannot get an Occupational Tax permit with this license. If a Cruffler holder wants to buy a machine gun, it must be transferred by an FFL license holder with an Occupational Tax permit.

The initial application fee is $30 and it is $30 every three years thereafter.

TYPE 06 FFL

A Type 06 FFL is for making and selling ammunition. People who reload ammo for their own use do not need a license. People who reload and sell that ammo to the public must have this license to be legal. This license is not a federal license to sell firearms.

The Type 06 FFL does not allow the person to make armor-piercing or destructive device ammunition. A SOT cannot be paired with this license because this license is not a federal permit to sell guns.

NOTE: There is no such thing as “machine gun ammunition.” The same 7.62x39 round will work in a full-auto AK47 as well as a singe-shot rifle.

The fee is $30 initially and $30 every three years thereafter.

TYPE 07 FFL

The Type 07 FFL allows a person to do everything allowed with a Type 01 FFL or Type 02 FFL and a Type 06 FFL can do. A person with this license can buy, sell, repair and make firearms as well as manufacture or reload ammo for sale to the public. Paired with one of the SOTs, the license holder can deal and work on Class 2 items.

FFL123.com says, “This license is the ‘biggest bang for your buck’ type… This license is perfect for the person who wants to assemble or manufacture AR style rifles.”

The application fee is $150 and it renews every three years for $150.

TYPE 08 FFL

A Type 08 FFL allows the person to import non-NFA items from other countries. It also includes all the privileges of buying and selling firearms as listed under a Type 01 FFL.

"Licensed importers and manufacturers are not required to have a separate dealer’s license to deal in firearms they import or manufacture. A license as an importer or manufacturer authorizes the FFL to deal in the types of firearms authorized by the license to be imported or manufactured," says BATF. This link downloads a PDF file to the computer.

The same file explains what may be imported with the license and the Type 11 license, described below.

Machine guns may not be imported, except for "a law enforcement agency; for scientific or research purposes; solely for testing or use as a model by a registered manufacturer; or solely for use as a sample by a registered importer or registered dealer," BATF says.

Serial numbers must be engraved or stamped into the frame or receiver of any imported firearm. If the gun already has a serial number, that may be used, provided it is not an already recorded serial number.

The application fee is $150 and renews every three years for $150.

TYPE 09 FFL

A Type 09 FFL holder deals in destructive devices. This includes grenades, grenade launchers and devices with a bore bigger than a half-inch that are not listed as sporting use weapons.

The application fee is $3,000 and the three-year renewal cost is $3,000.

TYPE 10 FFL

The Type 10 FFL is a destructive device and an ammo manufacturing license. This includes armor-piercing ammo.

The application fee is $3,000 and the three-year renewal cost is $3,000.

TYPE 11 FFL

The Type 11 FFL allows the holder to import destructive devices, ammo for such weapons and armor-piercing ammo.

The application fee is $3,000 and the three-year renewal cost is $3,000.


APPLYING FOR A LICENSE

Applying for a federal firearms license starts with knowing some basic rules.

1) Paperwork. The BATF supplies the needed application permits online.

2) Notification. The “chief law enforcement officer” in the area has to sign off on the application. The “chief” can be the chief of police or the sheriff. Neither officer has to sign the application, but without such a signature, the license application will be rejected by the BATF.

3) Background check. BATF will run an extensive background check on the person applying for a license. Part of this check is a fingerprint card. Most sheriff’s departments offer fingerprinting services for a fee. Electronic scanners make sure the print will meet BATF requirements before a fingerprint card is ever printed.

4) Being convicted of a crime is not an automatic block to getting an FFL, depending on the offense. The person applying may have to provide additional paperwork about the offense and adjudication.

5) Zoning. Every FFL, except the Type 03, requires the address where the license is based to allow the sale of firearms. Local zoning laws cover this. Home-based FFLs may fall under home-based or residential businesses under the local zoning regulations. Any local business license requirement must be met as well.

The BATF may schedule an in-person interview with the license applicant. This interview is guaranteed for people applying for a license to sell firearms. A premises inspection will be conducted.

All FFL dealers, including home-based FFL dealers, agree to let the BATF inspect as needed. “As a licensee you are required to display your license on your licensed premises, to maintain certain required books and records accurately, and to submit to a compliance inspection of your licensed premises, your inventory and your required records as often as once annually,” says the Gun Owners Foundation.

The BATF has a list of license requirements here.

A number of companies offer kits to help people successfully complete the FFL application process. Two top companies are:

THE LICENSE

Store the license in a safe place. In a gun safe is ideal.

When buying firearms from other dealers or manufacturers, the other FFL holder must have a copy of the buyer's license on file. The copy may be mailed, faxed or hand-delivered to complete the FFL transfer.

BATF will issue a license with a unique FFL number. What do the FFL numbers mean? Rocket FFL breaks it down and includes a graphic to tell you what each license allows the holder to sell.

Not sure if someone’s FFL is valid? The BATF has a quick check website to verify the FFL information and number. The web page says this quick check will not work on a Cruffler or an ammo maker license.


SELLING FIREARMS

Under the current federal law, an FFL dealer must record information on any firearm he sells, even if it is a personal firearm acquired before the person received the license. This information has to be kept for 20 years. If the license is given up or not renewed, this paperwork has to be sent to the BATF offices.

Background checks are not always required to buy a firearm with an FFL transfer. The exceptions are:

  • Purchase by a law enforcement agency. The sale must be recorded on a BATF form.
  • Sale to another FFL holder. The buyer's FFL must be recorded.
  • The buyer has a state firearm carry or owner license. In this case, the state permit number is recorded.

States may impose additional restrictions on sales. For instance, some states have a waiting period.

If the buyer has to go through the background check, the BATF has three options:

  • Approve the sale.
  • Do not allow the sale. In this case, the FFL holder must refuse to sell the firearm. Depending on what the background check reveals, local law enforcement may be alerted.
  • Hold. In the case of a hold, the BATF has three days to approve, reject or not offer a ruling at all on the sale. If the BATF does not say one way or another, the FFL holder must decide whether or not to go through with the sale.

BATF is also clear about selling. If the FFL dealer does not want to sell a firearm to anyone, he does not have to. BATF encourages FFL holders to use discretion and common sense when selling firearms, even if the federal agency approves the sale.

BATF also puts civilian firearms into two categories:

  • Long guns. These are shoulder-mount firearms. These may be sold to eligible buyers 18 or older. A person from one state may buy a long gun in another state, subject to state regulations.
  • Handguns. A handgun buyer must be a resident of the state where the gun is bought. Handguns may only be sold to people 21 or older. States may have additional restrictions.

In general, the person buying the firearm has to be the one who will own it. An exception is made for gifts, provided the person receiving the firearm is legally allowed to own it. In other words, a wife may buy a shotgun for her husband. Another exception is a parent buying a rifle for a child. In the case of a minor, an adult must be present when the minor child shoots the gun.

MORE INFORMATION

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