Anyone who wants to get involved in the firearm industry will require an FFL. So, what is FFL? Let us understand in this article what is an FFL and how to get it in a few easy steps.
For any business that deals in firearm sales, manufacturing, repairs, or any other aspect, a few mandatory government approvals are required. One of the most crucial of these is obtaining a Federal Firearms License (FFL), which is essential for legal compliance and conducting firearm business.
This federal firearms license FFL grants the licensee the authority to undertake activities related to firearms, as mentioned above.
What is FFL?
FFL represents a pivotal authorization that grants individuals the privilege to manufacture or sell firearms and ammunition within the US. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), an agency under the Department of Justice (DOJ), is responsible for overseeing and managing these licenses. There are nine different categories of FFLs, which can be classified into different types from 01 to 11. FFLs are available to dealers, manufacturers, importers, and collectors in the firearm and ammunition industry.
The regulation of the firearm industry has its roots in the 1938 Firearms Act. This act required anyone manufacturing, selling, or acquiring firearms to hold a valid license. In essence, firearms licenses serve as a fundamental gun control mechanism, ensuring that only duly certified individuals can operate as dealers in this highly regulated sector.
Who Qualifies For An FFL?
Before you begin the FFL application process, it’s crucial to determine if you meet eligibility requirements as an individual and for your organization. It’s important to note that the ATF follows a “shall issue” principle, which means that if you meet all the requirements for an FFL, they are obligated to grant you a license.
It is essential to have a clear business plan and intention before obtaining an official FFL license. Your business should already be legally established and registered within your state and meet other FFL requirements.
Eligibility requirements for FFL are as follows:
The applicant’s age must be at least 21.
The applicant must be a legal or permanent citizen of the US.
The applicant should not have any history of crimes or related convictions.
The applicant has no record of illegal drug involvement, including any violations related to illegal marijuana.
The applicant should not have any convictions related to domestic violence.
The applicant must be mentally fit and should not be diagnosed as mentally ill.
The applicant should not have any past violations of federal gun laws.
The applicant must operate from a physical place, be it a storefront or home.
The applicant should meet the specific requirements according to different states for getting an FFL.
Furthermore, FFL applicants must ensure that:
The firearm operations under FFL comply with state and local laws.
Within thirty days of FFL approval, Operations must abide by the standards of local and state laws.
No transactions should be conducted under the FFL until the firearm company adheres to the local and state laws.
A notification has been provided to the chief officer of law enforcement regarding the intention to apply for FFL.
Adequate, secure, and safe storage for guns and safety measures are provided at the store where firearms are being sold.
Getting An FFL – A Step By Step Guide
After you have fulfilled the requirements to apply for an FFL, it’s time to submit your application. To help you out, we’ve broken it into easy steps for obtaining your FFL.
Step 1: Reviewing the FFL Requirements
Before proceeding, it’s crucial to ensure that you meet the eligibility criteria set by ATF (as discussed earlier). You are likely applicable for FFL if you are 21 or older and meet all the requirements for purchasing a firearm. However, we would still recommend verifying your eligibility to be absolutely sure.
It’s worth noting that the ATF designates specific individuals as “prohibited persons” who are not eligible to obtain an FFL. It includes individuals who are currently or have previously been in the following situations:
Fugitives from the law.
Adjudicated as mentally unstable.
Under indictment and/or convicted of any crime carrying a sentence of over one year in jail.
A charged domestic violence offender.
Subject to a court order restraining them from making threats like harassing or stalking.
Unlawful users of controlled substances.
Dishonorably discharged from the military.
Deprived of the United State’s citizenship rights.
Step 2: Selecting the Right License Type
There are different types of types of federal firearms licensees. Check the list below that suits you the best. All these types of federal firearms licenses have particular purposes; therefore, choosing the correct license is crucial.
License for Dealers
It suits those aiming to engage in firearms dealings and/or gunsmithing. It falls under Class 3 of Special Occupational Taxpayer (SOT).
They are designed for pawnbrokers and firearm dealers. Like Type 01, it also falls under Class 3 of SOT.
Ideal for firearm enthusiasts who collect firearms as a hobby.
These are meant primarily for dealers specializing in destructive arms. It is under SOT Class 3.
License for Manufacturers
Geared towards those involved in the manufacture of ammunition.
If you want to manufacture firearms and deal in them, the Type 07 FFL is your choice. It is versatile, covering both manufacturing and selling aspects. It falls under SOT Class 2.
Combines the manufacturing and dealing of destructive arms, falling under SOT Class 2.
License for Importers
It is meant for those who wish to import firearms for resale. It is associated with SOT Class 1.
It is for the importers and dealers of destructive arms, with SOT Class 1.
Now, what is the significance of SOT? It is often referred to as the SOT License. Depending on the SOT Class corresponding to your chosen FFL type, you can engage in various NFA activities, including buying/selling, making, and/or importing NFA Firearms (or Class 3 arms). These include suppressors, short machine guns, barrel rifles, and more.
Here’s a simple breakdown of SOT Classes:
For the importation of Firearms (NFA) covering FFL type 08 and type 11.
It enables the manufacturing of Firearms (NFA), covering FFL Types 7 and 10.
Allows you to buy/sell NFA Firearms, applicable to FFL Types 1, 2, and 9.
Types 09 to 11 FFLs are essential if you plan to have heavy armor-piercing and destructive firearms, including bombs and grenades.
Step 3: Enroll in an Online Course
Acquiring the FFL License involves many steps that could appear complex as It involves much more than merely completing an FFL form and submitting it.
Becoming a license holder of federal firearms requires a deep understanding of regulations set by the ATF, making it crucial to choose the right path. As there are many online FFL certifications, the process has been streamlined, making it more accessible than ever before.
When selecting a specific course, ensure that you receive the following:
Assistance from a Licensed Firearms Attorney: Seek help from a qualified firearms attorney with the necessary credentials.
Insights from the Industry Expert: Receive guidance from a seasoned professional well-versed in ATF regulations and the broader firearms industry.
Timely Notifications of Legal Updates: Stay informed about changes to relevant firearms laws through automatic notifications.
Comprehensive Compliance Training: Access training that addresses compliance requirements for your employees and you.
Step 4: Complete the Mandatory Documentation
In your pursuit of an FFL, specific paperwork must be meticulously addressed. Begin by duly completing the 7/7CR ATF Form. This application necessitates an accompanying fingerprint card, procured using Form FD258, and a recent 2×2 photograph of yourself. It’s essential to ensure that the photograph is recent.
Step 5: Background Check Process
Upon receipt of your application fee, the FFL Center will initiate a comprehensive evaluation of your application. This evaluation encompasses all required supporting documents and in the IOI interview. The documents will include a photograph(s) and fingerprint card(s) for all licensing categories except type 3.
Subsequently, the FFLC will conduct a thorough computerized background check on all individuals designated as RPs (Responsible Persons) in your application, as mandated by legal requirements. The ATF defines an RP as an individual who serves as a sole proprietor or partner or possesses the authority to oversee a firearms-related activity’s administration, policies, and practices.
Within a corporation, this classification extends to corporate officials, stockholders, board members, and any other employees vested with the aforementioned legal authority. Each Responsible Person is obliged to complete their individual Part B 7/7CR ATF Form of Questionnaire of the responsible person.
Step 6: Awaiting FFLC License Issuance
Now, you’ll enter the waiting phase as you anticipate the issuance of your license by the FFL Center. Typically, this waiting period spans an estimated duration of 30 days – 60 days.
Understanding The FFL Application Costs
Fee for Application
No. of Year
Other FFL Fees to Consider
Regrettably, the initial license application fee might not be the sole expense on your FFL journey. The initial license application fee may not be the sole expense on your FFL journey. Depending on your intended FFL activities, there may be supplementary fees to account for.
ITAR/DDTC Registration: Suppose your operations align with the State Department’s understanding of a manufacturer and produce items listed on USML. You are obligated to register with DDTC by the ITAR. This registration could cost you $2,250, which the US State Department enforces.
Excise Tax Payments: Manufacturers producing more than fifty firearms per year are subject to an excise tax, amounting to 10 to 11% of the firearm’s value, contingent upon the firearm type.
FBI Check: FBI does not impose fees for National Instant Criminal Background Check System checks. However, some states serving as the POC for background checks may levy fees.
Permit to Purchase: It’s imperative to note that firearm regulation primarily rests within the jurisdiction of state governments, leading to variations in gun laws. If your state requires a permit for firearm purchases, customers must obtain one before acquiring firearms from your establishment.
FFL Annual Cost: While the upfront cost of obtaining an FFL covers a three-year time, it’s essential to consider the annual expense. For instance, getting a 01 type FFL has a $200 application fee for three years until renewal, equating to a yearly cost of $67. Also, the renewal charges, spanning three years, amount to $90.
Obtaining an FFL can be a strategic decision. Depending on the specific FFL license type you acquire, you open doors to various possibilities. You gain the capability to manufacture firearms, including silencers and machine guns. Moreover, you can engage in firearm imports and become an FFL dealer authorized to sell firearms.
But the potential continues beyond there. With the right approach, you can expand your horizons internationally. What’s even more enticing is the financial aspect. It takes two firearms sales to recoup your initial investment, eliminating the need to endure inflated prices at gun stores or contend with FFL dealer transfer fees. Instead, you can source firearms directly from distributors and deliver them straight to your doorstep. This streamlined process can translate into substantial savings of hundreds of dollars per product.
What is the cost associated with an FFL license?
An FFL license typically costs thirty to a couple hundred dollars for the initial three-year period.
How many FFL types are available?
There are a total of 9 different federal firearm licenses (FFLs) available.
What are the Categories of FFL License Types?
Different categories of FFL are Collector FFL, Dealer FFL, Manufacturer FFL, and Importer FFL.