Thinking about getting a Federal Firearms License (FFL)? We put this guide together to help you decide if you want a license and then if you apply, tips on how to get your ATF FFL application approved.
Here's our quick guide to the process. This is a much more detailed look at everything.
Applying for an FFL takes three things. Let's take a look at these three briefly and then go in-depth into the ATF FFL application process.
1) Time. The Bureau of Alcohol, Tobacco and Firearms (BATF) says it can take 60 days to approve or deny a license. Reality says it can take longer. One of our researchers and pro-staff members, Ben Baker, took nine months to get his several years ago. He had to call his congressman too. Renewals, fortunately, are just a matter of filling out simple paperwork and sending in a check. BATF mails out license renewal reminders.
2) Money. Every FFL costs money. The manufacturing FFLs are more expensive than the FFLs that let a person buy and sell guns. Most people opt for the Type 1 FFL.
3) Paperwork. At some point it make seem like buying house has less paperwork. Paperwork is a constant in the life of an FFL holder. Every firearms transition has individual paperwork. FFL holders also have a logbook, called a bound book. This is where sales and transfers are recorded.
4) A physical location. An FFL must be linked to real estate. A Post Office box is no longer allowed.
TWO WARNINGS!
1) FFLs are considered a "high risk" business by credit card companies. If you base your FFL at your business, you can expect to pay at least 5% on credit card transactions. Of course, you can tack on an additional fee to cover that expense.
2) Also, insurance companies often consider FFLs high risk. If your insurance company learns you have and FFL and are buying and selling guns, you can expect a premium hike at a minimum. For a home-based FFLs, the insurance company may cancel your insurance.
In either case, you may shop for new insurance. A Google search for "insurance for a federal firearms license" will give you links to insurance companies that offer FFL insurance.
When you begin the FFL application process, call the BATF licensing office any time you have a question. You can send an email and maybe get a reply. Sending a letter may get a reply, but that is just another delay in the process. Document your call with the date, time and whom you spoke to.
Applying for an FFL first starts with deciding which type of FFL you want. (See link above for FFL types). One form covers all the licenses to start with. Make two copies. One is your scratch copy. You can erase, change, mark up and whatever on this copy. The other is the pristine copy you send in.
Fill one out and check everything over. If you made a mistake, change that copy. Once you get everything on the application exactly the way you want it, carefully print and sign where needed, on the second copy. Make a copy. Mail the original to the BATF and the relevant pages to the law enforcement head. These sheets are identified at the bottom as "CLEO Copy." The scratch copy and copy of the good FFL application, keep for your records.
Fortunately, the FFL application does not require approval from the chief of a local law enforcement agency. It used to. You must give a copy to the head individual, be that a chief of police or a sheriff. Part of the FFL application includes sheets for the law enforcement chief. The law enforcement head can file an objection with the BATF over your license, but you can present your side too.
You do not need an FFL to sell ammunition. If you plan to sell reloads, you must have a Type 6 license.
Before you ever fill out the FFL application, make sure you can have an FFL at the physical address you choose.
You can set up your FFL at your home if the local zoning code allows home-based businesses and/or gun dealers. If your zoning does not allow home-based business and/or gun dealers, the BATF will reject your application. Check with your local zoning or building department to see how your property is zoned and if you can base an FFL there.
If you need to get your property rezoned, weigh the costs of this:
• Increased, or decreased property value.
• Increased property taxes
• The cost of rezoning your property with no guarantee your request will be approved.
• Time needed to get the property rezoned. You might be able to get this done in 30 days, a BATF time-limit for getting things in order once your license is approved. You might not meet that deadline.
In the case of rental property, get approval for your FFL from the landlord in writing. Include that in your FFL application.
Depending on your local ordinances, you may also need a business license. Check with the Compliance Department at the courthouse or city hall. If you get a business license, you may need a state sales tax number. If you plan to sell guns retail, you definitely need this number is your state has a state sale tax. The process to get this number, or license varies with each state. Tax Jar has a guide to start you down this road. The article has links to each state's sales tax department.
Sometimes you will need an employer identification number (EIN) from the IRS. This takes just a few minutes with an Internet connection. Google "IRS EIN" and click on a suggested link that starts www.IRS.gov
Download an FFL application from the BATF. As we go over each item, compare what is below to the application so you can understand what we are discussing.
Question 1 is where you start the process to choose your license type. If you want to buy and sell guns for a profit or do gun transfers, choose anything BUT collector (which sets you up for a Type 3 license). Repeating: Do NOT choose collector.
You do not have to incorporate to get an FFL. It is a good idea. Hg Legal Resources takes a look at the pros and cons of incorporating. Links at the bottom of this article explain the various types of corporations.
Questions 2-5 are routine things and need no explanation.
Question 6 is where the FFL is based. This can be your home or business. It has to be a physical building. This where the BATF will come to inspect your records. It is where you are expected to store inventory over the long term, if you have inventory.
Guns can be shipped to the address where the FFL is based or another address. The other address must have a secure way to store guns until they are moved to the FFL's base location.
Question 7 is where you can list a Post Office box.
Question 8 needs no explanation.
Question 9 is where you tell the BATF what you want to do. Keep this simple.
Question 10 is where you formally choose the license type. You can pick more than one. This means your application and license fees will be higher.
Question 11 is how you will pay. We recommend a Post Office Money Order. This is secure, traceable and it means the money has already left your wallet. You don't have to worry about having enough money in your checking account to cover the fees when BATF cashes the check. You are not giving out your credit or debit card information.
Question 12 says you must have hours of operation. These are the hours BATF expects to you be open and it is the hours they will use to come and conduct an inspection of your premises and your records. You can do business outside these hours. You can be closed on the weekends and yet go to a gun show and set up a booth. You can also be closed if those hours fall on a holiday, you are on vacation or something unexpected comes up. You need to set at least two hours during a week. More is good. You can change the hours later with another form.
If all you want to do is go to gun shows to buy and sell guns, BATF will likely deny that FFL application. BATF wants you to have a permanent location to do business from.
Question 13 requires the FFL number if you are buying a business from someone else. If you are starting fresh, select No.
Question 14 is where zoning becomes a factor. Unless you own the hotel or motel, choosing that option will probably get your FFL application denied. Public housing is another tricky one. You must check the regulations for that public housing development to see if you can set an FFL there.
Question 15 is self-explaining.
On Question 16 choose yes. Even if you don't plan to do either of these, keep the door open for whatever the future may hold.
On Question 17 choose no. BATF expects you to use your license to make money. If you choose yes, your FFL application will be denied.
Question 18 and 19 means the chief of police if you live within a town with a police department or your sheriff. You just need to make sure that person gets a copy of the appropriate parts of your application. Hand deliver this.
Question 20 is self-explaining except for f. On f., a "responsible person" is someone who uses your license to conduct gun sales on your behalf. If you run a store, you probably need a "responsible person" to handle sales when you are not at the business. Guns sales under an FFL can only be done by you or a "responsible person" as listed on your FFL.
Question 21 is self-explaining.
This is the part for the "responsible person" if you are adding someone and you. Each "responsible person" fills out a separate form.
On Question 2 put your FFL. If you do not yet have your FFL number, put "first time applying."
Most of the rest of the questions are self-explaining and are a lot like the questions on Form 4473 you fill out when buying a gun.
On Questions 16 and 17 BATF wants to know the real color, not whatever shade of contacts or hair dye the person has at the moment.
The picture requested must be clear. You must be looking straight ahead into the camera. Your face should fill the frame. If your picture shows a lot of your chest and abdomen and has plenty of space on each side, BATF will reject it. Find a place that does passport photos and have them take one.
Type 3 FFL applications do not need the fingerprint card or picture.
BATF has specific requirements for the fingerprint card to get an FFL. "The fingerprint cards must be completed by your local law enforcement authority," the BATF says. Here is an example.
FD 258
Many jails offer fingerprinting services to the public for a charge. You will need an appointment. Be sure to ask how much it will cost. You need at least two copies, but get more if you can. If you need fingerprint cards in the future, such as for the purchase of a Class 3 weapon or a suppressor, you have them on hand.
Two fingerprint cards are required for a first-time FFL application and each "responsible person." One goes to the BATF and the other goes to the chief law enforcement officer in your community.
Nation Gun Trusts has a rundown of the fingerprint card and what it must have.
Pages 5-8 explain, in BATF terms, the language and words used in the application.
PAGES 9-12
You have to provide information you already supplied. If you leave any of this out, and BATF finds out, the agency will reject your FFL application. Page 9 is also where you determine the fees you must pay. These pages go to the chief law enforcement officer in your community.
Once you send everything in, wait. If you pass this part of the FFL application process, BATF will set up a time to interview you and inspect the location where guns will be stored.
Except for a Type 3, every BATF license requires an in-person interview where the FFL is based. It can take 2-3 hours. Take notes. Ask questions.
The interview has 4 objectives:
1) Inspection to make sure you and the location meet BATF requirements.
2) Review your application.
3) Go over ALL the BATF rules & regs.
4) Start the 30-day countdown to being compliant with slate, local and federal laws.
The Inspection
BATF does not have explicit instructions on what makes secure storage. Certainly, a gun safe qualifies. A security system is not required, but it helps. You need to show that guns can be stored away from immediate public access, behind a counter, for instance, and the location is locked up when you are not there. For a home-based FFL, a gun safe inside a closet that can be locked is sure to get approval.
Part of the inspection may include a look at the zoning on your property.
BATF does have some advice on a "safety device."
The Review
The agent is going to go over your application. If you make it to the interview, it's already been checked by one or more agents. He may ask you many of the questions on the form.
During the interview, the agent can make changes on your FFL application. The biggest change is for the type license you want. If you want to own a full-auto gun, do not apply for a Type 7 FFL, the license for making guns. Just save your money and buy one.
Rules & Regs
This is the longest part of the interview. The agent has a lot of ground to cover. He expects you will ask questions. Takes notes too.
As Vaughn Precision says, expect an information overload.
The interview is partly to ask you questions, partly to give you information you need to know and partly to let you ask questions of the BATF agent. The information the agent gives you also comes in a book that arrives with your license.
The agent will cover a tremendous amount of ground. He will discuss the records you have keep and how to fill out the paperwork and record things in your bound book.
IMPORTANT NOTE: BATF is specific about the bound book. An electronic bound book is OK for your records, but not BATF. You must use a permanent bound or loose-leaf book for these records. Some FFLs use a ledger book. This is acceptable.
The agent will explain all the forms, the background check process, bound books and more. Some of the forms include the ones you have to fill out annually. The agent might not explain local requirements, such as a pawn shop sending in a list of purchased or pawned guns to the sheriff every day.
The agent will talk about short-barreled guns, explosives, making ammunition and everything else. You may not want to deal with National Firearms Act items, but the agent is going to talk about them anyway.
He/she literally will go over every regulation in the book. This may sound time-consuming (it is) but it makes sense from a legal point of view. If you do something seriously wrong later, BATF can point to this interview and say "We told you."
Remember these two things.
1) If you have a question, call BATF. Until you get an answer from them, don't do it.
2) You have the right to refuse a sale or refuse to do a transfer. You do not have to explain why you refuse.
30 Days
Once you are approved for an FFL you have 30 days to get things in order at the state and local level. That means getting any needed permits or licenses. State and local agency delays are not something you can control. If you think you need to get things done to meet BATF requirements, start before you send in your application. Having everything lined up before the interview will make things easier.
Sometimes local and state rules require you to have an FFL before you begin the process. For instance, Indiana requires handgun sellers to register with the State Police, but you can't do that until your FFL is approved. Nothing you can do about that, except get your FFL approval and immediately start the process.
You do not need your actual license in hand to begin the state and local application process.
MAKE MONEY
BATF expects you to use the license to make money. Gunsmithing is a money-making venture. Doing transfers for Internet sales is a money-making venture. Saying you want the license to get guns at a discount for your collection gets your FFL application rejected.
Get Help
FFL application kits come with the bound books you will need, how to process sales and information to help you get through the BATF interview.
Some top recommended FFL kits are:
INSPECTIONS
BATF is allowed one inspection per year of an FFL holder's location and paperwork.
If you are the only person with the license, meaning you don't have an employee as a "responsible person," then you do all the talking with the BATF. If you do have employees operating under your license, Orchid Advisors recommends having one person serve as the point man to talk to the BATF inspector.
BATF will call before they come.
During this inspection, they can look at any guns in your inventory. They cannot examine your personal collection.
BE REALISTIC If you are thinking about getting an FFL, be realistic about it. You are not going to save a lot of money on guns. With retail markups for new guns around 10 percent, selling guns is just not a high-profit industry. Gun stores make their profit selling accessories and other items. If you have a sporting goods store or plan to open one, an FFL is a good addition.
Pawnshops can get a higher profit by increasing the markup on their used guns. Pawnshops also require regular business hours and many communities only allow a hock shop on commercial-zoned property.
You can make money by doing transfers. Someone buys a gun online and has it shipped to your FFL. You charge to do the paperwork and call in the background check.
You will not get rich being a gunsmith. Most gunsmiths do this work as a sideline.
If you want an FFL to bring in a little extra money, like doing transfers or gunsmithing in the evenings and weekends, you can make that happen.
When you get your FFL, be sure to sign up with FFL Dealer Network to get referrals from people looking for an FFL to accept a transfer, business and marketing tips, breaking news, features and in-depth investigation pieces of current and pending legislation on the gun industry and FFLs.
