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What's an Federal Firearms License (FFL) Dealer?

A Federal Firearms License (FFL) enables private party sales of firearms. When an individual purchases a firearm, often online, an FFL Dealer can be used to facilitate the private sale of their firearms. FFL Dealers play an important role in the safe transport of firearms by: enhancing public public safety, assisting law enforcement professionals, and through background investigations and other means ensure firearms are only given to individuals who are legally allowed to possess them.

FFL Transfers 

Some FFL dealers only accept firearms on behalf of a buyer. This is called a transfer. The dealers do not have any inventory. Some do not have even have a gun store, preferring to operate out of their home. 

BATF regulations allow a gun to be shipped to a location other than where the license is based. The BATF is still granting home-based FFLs. This lets a person operate transfers out of their home while accepting the actual gun at another location. This is handy because the FFL holder does not have to wait at home for the firearm to be delivered. With permission from the employer, the gun can be sent to wherever the FFL holder works. 

FFL transfer often mean the buyer bought a firearm in an online from an auction company or a retail shop in another state. The buyer needs the gun shipped to an FFL. 

This is a valid reason to have an FFL according to the BATF. BATF does not have a rule on how many transfers must be done to keep the license. It does say if the FFL holder is trying to make money, that is good enough for a license. 

SOT 

The Special Occupational Tax (SOT) allows an FFL dealer to handle full auto firearms, restricted firearms like short-barreled shotguns and rifles accessories and suppressors. The SOT covers all items listed number the National Firearms Act. 

Given the cost of the SOT, most FFL holders do not have this license add-on. 

The Class 1 SOT allows the person to import NFA items and costs $500 or $1,000 a year, depending on the volume of business. It attaches to a Type 08 and 11 FFL. 

The Class 2 SOT is for manufacturing HFA items. It costs $500 to $1,000 a year depending on the volume of business. It attaches to a Type 07 or Type 10 FFL. 

The Class 3 SOT which lets the FFL holder buy and sell FFL items. It is linked to Types 01, 02 and 09 FFLs. It is $500 a year. 

Long Guns v. Handguns 

Federal law puts even more restrictions on handguns. If all the other requirements are met, a handgun buyer must be 21 and be a resident of the state where the gun is being transferred. Long guns may be sold to someone from out of state who meets all the criteria and is at least 18. 

Handguns can be transferred across state lines from one FFL holder to another. That way, the buyer can get his handgun in the state where he lives. 

Background Checks 

The FBI, not the BATF, does background checks. In some states that meet the BATF background criteria for a firearm possession license (think concealed carry permit), a buyer can skip the background check. The appropriate BATF forms still have to be filled out. 

Transfer and Background Check Cost 

The FBI does not charge for a background check. The BATF does not charge for its work, except for the cost of an FFL. Some FFL holders use their license to make money by charging for firearms transfers. Some charge for a background check when a person is buying a gun. Given the very low-profit margin on guns these days, an FFL dealer must look for ways to boost their profit margin especially if they have a physical retail shop.


FFL Dealer Transfer Procedures

The below procedures outline proper procedures for an FFL facilitated transfer:

  • The prospective transferee (buyer) must complete Section A of the ATF Form 4473. 
  • The FFL Dealer must complete Section B of the 4473, conduct a NICS check on the buyer, and record the response.
  • The FFL Dealer must complete Section D of ATF Form 4473 prior to transfer, identify the transaction as a private party transfer on the ATF Form 4473, and record the disposition in its A&D record no later than seven days following the transaction. 
  • The FFL Dealer must maintain the Form 4473 in accordance with 27 CFR 478.129(b). 
  • The FFL transfer must be completed within 30 calendar days of the date NICS was initially contacted If not, the FFL Dealer must conduct a new NICS check. 
  • If the FFL transfer takes place on a day different that the day the prospective buyer signed Section A of ATF Form 4473, the FFL Dealer must check the buyer’s photo ID again and buyer must complete the recertification in Section C immediately prior to the transfer. 
  • All other legal requirements (for example, providing secure gun storage or safety devices with each transferred handgun, and any applicable multiple sales reporting) apply equally to these transfers.

Click here for detailed information on FFL Dealer duties and responsibilities.

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