Selling hand loads?

[Jim Watson]

The first problem i see is that there is no definition of "doing business."
One box? Probably not.
One case? I don't know.
One pallet? Probably so.

The second is liability. Sell one box, ok. Sell one round with a double charge and you are sunk.

 

[jaguarxk120]

If you reload and sell just "one" box that is doing business.

A separate FFL license is needed to "manufacture ammunition".

 

[Hunter Customs]

I believes it's an 06 FFL that's required to manufacture and sell ammunition.

If the guys at the gun shows are doing this on a regular basis and they don't have the proper FFL they will be in for a rude awakening one of these days.

I recall a fella I used to see at gun shows with two tables full of used guns for sale, the last show I saw him at the BATF&E told him to acquire an FFL as what he was doing constitutes being in business.

Best Regards
Bob Hunter
www.huntercustoms.com

 

[buck460XVR]

Originally posted by jaguarxk120:

If you reload and sell just "one" box that is doing business.

A separate FFL license is needed to "manufacture ammunition".

According to the ATF......

Yes, if the person engages in the business of selling or distributing reloads for the purpose of livelihood and profit.

One does not need a separate license to sell ammo, only a license to manufacture it.

 

[teeroux]

My LGS did this a while back. He remanufactured ammo under his own label. It didn't turn much profit vs. time invested. Last I talked to him he talked about starting it back up.

 

[FrankenMauser]

A basic list of necessary evils:

1. You need a type 06 FFL. ($30 / 3 years)
1.a. You have to let the ATF inspect your place of business, and home, any time they want.
2. You need a business license through all appropriate governing agencies (here, that's State, County, and City). (Cost can be cheap; or astronomical, depending on where you are. Here, it's about $575 over 3 years, plus 3-5 hours driving time and gas.)
3. You need to be in an area where zoning regulations will allow an "Ammunition Manufacturer" to operate. If you're in a city, don't count on getting approval. If you are unincorporated and just need county approval, it will depend on the idiots you send your tax dollars to.
3.a. You need to be in an area where bulk storage of powder and primers won't be an issue. Again, zoning and fire regulations are generally not friendly.
4. You need to be ITAR registered (~$2,500 / year).
5. You'd be an idiot to do it without business insurance and liability insurance (they're separate policies, and cover separate risks). Business insurance isn't too bad, but the liability insurance will not be cheap.
6. To keep your liability insurance premiums "reasonable", you'll need to have each lot of ammunition pressure tested. You're looking at $300-800 a pop, plus the cost of the ammo and shipping.
7. You need to keep DETAILED records of everything you do, and your insurance company may even require you to keep exemplar ammo from each lot produced (more money lost, just taking up space on a shelf).
8. You cannot store your personal powder/primer supply in the same place as your business supply. (I vaguely remember seeing this as an actual regulation, but it may be an insurance requirement that I'm mis-remembering.)
9. I'm probably forgetting 3 or 4 dozen other things...

Bottom line:
Go big, or go home.


(I am not a manufacturer; but I have spent a significant amount of time researching the possibility.)

If the guys at the gun shows are doing this on a regular basis and they don't have the proper FFL they will be in for a rude awakening one of these days.

There were a bunch of guys selling cast bullets in the area I recently moved from. Once the ATF got wind of their lack of 06 FFLs... their advertisements and gun show booths vanished almost overnight. I don't know if they were prosecuted, but they sure did stop selling bullets in a hurry.


Before anyone asks...
YES, you also need an 06 FFL just to sell cast bullets. According to the wonderful legal definitions in this country, a projectile is "ammunition" (even empty, drawn copper jackets are "ammunition" ). Since you need an 06 FFL to produce ammunition, you need an 06 FFL to manufacture bullets for sale (even the lowly gas check requires an 06 FFL to manufacture for sale...).

There really isn't much difference, from a business standpoint, between selling bullets and selling loaded ammunition. You can get lower liability insurance rates, but the rest of the requirements are the same.

 

[crashxl]

Sounds like a bad idea then. Guess those guys at the gun shows are on very thin ice.

 

[Mike Irwin]

"If you want to start selling handloads, there's a couple of other points that haven't been mentioned yet:
1) ITAR. (you have to register w/ the US State Dept, even tho' you are not exporting anything, and pay a $2250 license fee. I think that's annually"


Uhm.... MAYBE, and ONLY maybe.

This is one of the most hashed out and ludicrously overwrought subjects in the firearms field.

I've seen claims ranging from "You need to be licensed if you even give away loaded ammo," to "You must be licensed even if you let someone shoot YOUR gun with YOUR ammo!"

It's so bad that just about everytime someone offers up a gun and some reloads for sale in our sales forums we'll get a breathless PM that "So and so needs to have a federal license to sell those reloads!!!!!!!!!!!!!!!!!"

That's silly.

The critical factor in all of this is whether or not you're doing this as a business. That's the SAME concept that applies to setting up a table at a gun show and selling a couple of the guns from your collection.

If you're selling a half dozen guns every week, ATFE is going to look at you VERY differently than if you sell one or two guns a year and immediately plow that money into a different gun.

This is something that I wrote a few months ago in response to this question in the TFL staff forum:

(The applicable section of the regulation) doesn't say "livelihood or profit."

It says " livelihood and profit"

That's a critical difference. It's not one or the other, it's BOTH in conjunction.

In other words, I can make a profit on a box of ammo that I sell. But if I only sell one or two boxes of ammo, and only make a profit of $5 over the cost of the components, it is NOT a livelihood.

Livelihood isn't ambigiuous, either. In IRS terminology, a livelihood is either the primary means of supporting yourself financially, or one which provides a substantial portion of income.

Someone selling a handgun and including a box or two of handloads with it to clear up a slot in their collection would not be engaging in an activity that meets the IRS definition of livelihood. They would be hobbyists.

In IRS terms, the difference between a hobby and a livelihood is that in a hobby, you engage in it without expectation of making a profit.

This site has a good explanation of where all this falls out.

http://www.bankrate.com/finance/mone...ax-breaks.aspx

Here's another discussion on the subject:

http://www.ehow.com/list_7517931_not...ctivities.html

My read is, and remains, if you sell the occasional box of reloads, especially in conjunction with the sale of a gun in that caliber, the sale is perfectly legal under IRS and ATF rules and NO manufacturer's licese in required, just as no FFL license is required for the individual to sell the handgun.

 

[David Bachelder]

I'm under the impression there is no permit required to sell cast bullets, brass primers or powder. I'm too lazy to look up the regulation but I'm pretty sure I saw it somewhere. I doubt if Midway or anyone else is required to have a permit to sell the components required to assemble a bullet. Selling ammo does not require a permit.

Manufacturing ammunition for your own use is permit free. Manufacturing ammunition with the intent to sell to the general public, or enter commerce is not.

Manufacturing ammo and selling a box or two to your neighbor or Uncle Bob is probably ignored. If your neighbor or Uncle Bob shoots someone with this ammo, you will more than likely be questioned ay an AHJ (Authority Having Jurisdiction). The end result of this questioning is a shotgun blast, it may end up anywhere.

The ATF has bigger fish to fry and they do have a reputation for selective enforcement. They use the existing laws as needed.

I possess a FEL, Federal Explosives License and I have dealt with the ATF many times and on many different levels. 99% of them are just people out to doing their job. A few are "Dudley Do Right", and they are out to correct each and every wrong in existence, weather it's in writing or not.

For the most part they are very co operative and are willing to help you within the limits of the law.

 

[Crankylove]

Unfortunately, for many issues dealing with firearms, ammo, or components, it isn't nessecarily the letter if the law that is what is upheld, but the interpretation of the law by whomever you happen to be dealing with.

Call the local BATFE office on Monday and talk to Bob, and you get his interpretation of law "X"..................call back on Thursday and talk to Jim, and you get his view of the law.

Also unfourtunate, is the selective enforcement that goes on. Laws on the books for years aren't enforced until you get Officer John Doe having a bad day, or someone up the chain suddenly decides to efforce law XYZ that has not been actively enforced, but will look good in the press at election time.

I'm under the impression there is no permit required to sell cast bullets, brass primers or powder. I'm too lazy to look up the regulation but I'm pretty sure I saw it somewhere.

. Combine inconsistent enforcement and interpretation with the above attitude, and you have a nice recipe for large fines and prison time.

 

[David Bachelder]

Show me the regulation that states you need a permit to sell cast bullets, primers or smokeless powder.

Any kind of bullet for that matter.

 

[Colt46]

Even giving it away is a bad idea

That includes friends and relatives.

 

[Brian Pfleuger]

Show me the regulation that states you need a permit to sell cast bullets, primers or smokeless powder.

Any kind of bullet for that matter.

The term "ammunition" means any of the components also.

The regulation applies if you MANUFACTURE them and sell them for livelihood and profit.

http://www.atf.gov/firearms/faq/general.html#gca-ammunition

Being a reseller of commercial ammunition (including components) that you purchased does not require licensing.

 

[Sure Shot Mc Gee]

I've sold shells for there cost. To my friends of course. But you have to be so darn overly careful when making them up. As the main problem. You have no idea the condition their weapon is in or its quite possible without your knowing and certainly without permission your ammo could end up in the hands of another person not entitled to buy it. Your decision your call. You pay the toll if there is one. BTW. I no longer sell or give my ammo to anyone period.

 

[David Bachelder]

I stand corrected.

I see that re-sellers are exempt. So companies that produce and sell cast bullets are regulated. Companies that resell a manufacturers cast bullets are not.

Makes sense to me.

I'd be willing to bet that most manufacturers and retail sellers of cast bullets are not permitted.

 

[bedbugbilly]

A good thread. I've often wondered the same thing as I've seen reloaded ammo for sale at gun shows . . and walked right by. Personally, I won't reload for anyone but myself.

I'm wondering though . . a person who "legally" does manufacture reloads and sells them . . . other than the agencies collecting the fees for the permits . . is their any type of "quality check" required?

Having been in business and having dealt with liability insurance . . . I can't imagine the major headache that would be for something like ammunition. You'd have to produce a LOT of ammo and have good sales just to pay the liability insurance premium.

"Hard times" breeds various ways of making money but making and selling reloads isn't something that I'd even consider . . . I'd have better luck selling myself not he street . . . but nobody would buy that either!

The remark was made about "selling" a couple of boxes with a pistol purchase . . . I would think that if selling a pistol, you might "throw in" a couple of "free" boxes rather than actually "sell" them . . . but, if I was buying a pistol and several boxes of reloads were "thrown" in, I, personally, would still not shoot 'em even if I knew the person who reloaded 'em. I'm very careful in my reloading . . . but, if I have a problem with my reloads, it's "on me" . . . not somebody else. If it was a couple of boxes that were reloaded by a reputable ammo mfg. - such as some of the .38 spl. WC that you can buy off the LGS shelf that you KNOW that were produced by a licensed, insured, mfg. - then I'd probably use 'em.

Where I live, we have a guy who is supposedly mfg. and selling "reloaded ammunition" - he's advertising in local papers, etc. I know enough about him that I w ouldn't shoot anything that passed through his hands even if it was a sealed box from a trusted Mfg.

 

[Wyoredman]

I have *given* a box of handloads to a friend when there was no ammo at the store for months-on-end. But even that's a bad idea.

Hogwash! I see absolutely no problem with giving hand loads to friends. I do it all the time. I even go to the range with them and work up the best loads for their guns. Makes for great friendship time and I enjoy it!

If one of my friends ever sues me...well I guess I had it coming! I am not going to lose sleep or friendships worrying about it.

People are too worried about being sued anymore. Live life

 

[WESHOOT2]

been there not guessing

The ATF has determined that selling ammo one makes is "for profit"; an FFL06 is required.

One MAY assemble ammo using the end-user's actual fired cases and charge for it, without license or Federal tax burden.

Liability insurance is NOT mandated, but no store, outlet, or gov. agency will buy the ammo without proof of liability coverage. Plus, in today's environment, one would need to be a complete idiot to sell ammo without liability coverage.
I can recommend an insurance company.



And bullets are made of lead, which is very heavy. So when you receive a pallet of bullets you better have thought through how to move and store it.
'Cause it's heavy, see?




See below

 

[Brian Pfleuger]

The ATF has determined that selling ammo one makes is "for profit"; an FFL06 is required.

Can you provide specific documentation of this? I'm not saying you're wrong but I have never seen such evidence and it runs contrary to the wording of the regulation.

 

[WESHOOT2]

probably still in the pile of ATF paper-trash I collected

I cannot recall if it was direct from BATF (dating meself and me bidness, ay? ), but I can definitely recall the decision.

A definitive answer is out there (but I believe I'm correct ).


Oh for a simplified statute.........