Excise Tax Exposure?

[Jim R]

So I am putting together my first AR platform and have decided to go with the 300 Blackout. I go to me favorite gun retailer and tell them I would like to ask them to accept a transfer of a lower for me. They tell me that they are fearful of potentially being held responsible for excise tax if it is determined they are actually assembling a complete rifle even though they would be selling the upper and lower seperately. They stated that most other gun stores will indeed order both seperately, but they believe that there is potential later on and they are not taking any chances. So their policy is now not to do any lower transfers at all.

I don't pretend to know all the intertwined ATF and IRS rules and regs. Hell, I don't even know enough to be dangerous, but is this a little paranoid on their part or is there something I may be missing? Thanks in advance, Jim R

 

[colokraut]

Re: Excise Tax Exposure?

Now that's an easy one in my eyes: if a gun shop declines to transfer a gun to you, you go find a different FFL-holder to do the transfer. You could check with other gun shops, or "shop by price" and check with a few pawn shops in the area that typically do the transfer for a smaller fee. Don't get me wrong here, I'm all for supporting the local gun shops. But when they clearly indicate they don't want/need your business, you should not feel bad about "shopping around".

Also, are you ordering/buying the upper through them? If so, they may indeed be on the hook for excise tax, at a minimum when you buy/pick up both upper and lower on the same day (or was it a week? Can't recall). It sounded like both parts would have to be ordered in. If that is indeed the case, there's no good reason to get the upper through them. You should be able to order yourself and have it shipped from the seller to you directly.

 

[jakhamr81]

Re: Excise Tax Exposure?

They law is somewhat ambiguous and open to interpretation. The way I understand it is that if they want to assemble an upper to a lower they would need a type 7 manufacturing license and they would then be responsible for the excise tax, after 50 firearms.

They can sell you a lower. After it is transferred to you, you can hand it back to them, and they can do whatever you want to them to and they are now considered to be performing gun smithing services and no tax is required.

Either way it is their choice to conduct a transfer or not and it is up to you to use them or find another dealer.

 

[sawgunner2001]

Re: Excise Tax Exposure?

So....when it comes to excise tax, a lower receiver (by itself) is NOT considered a firearm?

 

[Jim R]

Re: Excise Tax Exposure?

My original intent was to have them accept the transfer for me on a brand of lower they do not carry. Their caution comes from a meeting with an ATF guy who said it was plausible they could be labeled as being a manufacturer and therfore held accountable for excise tax as such, and I am sure it depends on the ATF agent as to the interpretation of this. The owners of this retailer are not new to the game and are widely respected as the source in our area for all things firearms related. It just seemed to me that this was being somewhat overly cautious when I have heard no one else take this stance on a lower transfer.

The question is not whether the lower is considered a firearm or not, but whether ordering one in can be construed as being a manufacturer.

 

[Guy Montag]

Re: Excise Tax Exposure?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Jim R</div><div class="ubbcode-body">It just seemed to me that this was being somewhat overly cautious when I have heard no one else take this stance on a lower transfer. </div></div>

ATF compliance has them scared to death of being non-compliant, a common theme.

Brian's post nails it, find another ffl.

 

[346ci]

Re: Excise Tax Exposure?

As mentioned, find another dealer.

 

[rcmigpilot]

Re: Excise Tax Exposure?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: sawgunner2001</div><div class="ubbcode-body">So....when it comes to excise tax, a lower receiver (by itself) is NOT considered a firearm? </div></div>

The lower is a firearm for the purposes of ATF registration and dictating what part of the firearm transaction must be handled by an FFL. To my understanding a "firearm" for the purpose of excise tax must be a complete, ready to fire weapon that is sold during a single transaction. If you get a complete upper and a complete lower at the same time then it could be argued that it is actually a complete firearm. If you get a complete upper and a stripped lower at the same time then return later and during a separate transaction purchase the lower build kit how can that be argued to be a complete, ready to shoot firearm. The big question I have is how would they put the case for the excise tax together when neither an upper nor a lower parts kit are required to be tracked or registered in any way. In my case I ordered a stripped lower, a build kit and a complete upper from PSA. Since the upper was built to order and wasn't shipped till 3 weeks later there was no excise tax.
To the OP, I'm with everyone else, find another FFL.

 

[L3IRQ]

Re: Excise Tax Exposure?

Sounds to me like they are just trying to push you into buying something they have in stock, if I were you I'd look for a new FFL.

 

[Glen Seekins]

Re: Excise Tax Exposure?

A lower is not a *compete* firearm and is not liable for tax. They transfer you a "lower" its just that,if they build into a complete gun then transfer as a "rifle" they owe tax because they just manufactured a rifle out of seperatly purchased components. The law is simple. I would just find another place to transfer.

 

[freefalle7]

Re: Excise Tax Exposure?

The FFL is retarded

Find a new one

Free