07 FFL Manufacturing Module

In the United States, to legally buy, sell, or manufacture parts or complete firearms, you must have a valid FFL. They are available in different types that cover different aspects of buying and selling, manufacturing, and importing or exporting NFA-regulated guns, ammo, or parts. This section deals with the information about the Type 07 FFL for manufacturing firearms and parts, such as upper receivers or lower receivers, silencers, and other NFA-restricted parts.  

What is an 07 FFL?

A Type 07 FFL is one of the many types of Federal Firearms Licenses issued by the Bureau of Alcohol, Tobacco, and Firearms. The Type 07 FFL (Federal Firearms License) is one of three licenses issued to those businesses that manufacture firearms, ammo, or destructive devices. A Type 06 FFL is the license that a firearms business needs to manufacture ammunition, except ammo for destructive devices or any type of armor-piercing ammo. The third type is a Type 10 FFL which is the license that as an FFL holder, you need if you manufacture destructive devices, ammunition for destructive devices, or the manufacture of armor-piercing ammo. 

In short, a Type 07 FFL is the license issued by the ATF that allows you to legally manufacture firearms but not destructive devices. 

Advantages and Disadvantages of a Type 07 FFL

1. A Type 07 FFL pairs with an 02 SOT (SOT stands for Special Occupational Taxpayers) and it extends the power of the Type 07 FFL to include the manufacture of machine guns, AR-15 rifles, and other restricted NFA guns. Expect to pay an additional fee for your 02 SOT in the range of $500-$1,000 or higher. The difference in cost is due to the size of the business applying for the 02 SOT. 
2. The Type 07 FFL is not too expensive. It runs in the $150 range, so it’s affordable for most firearms businesses that want to manufacture guns or parts. 
3. The Type 07 FFL does not limit how many parts or firearms you can manufacture. 
4. There is no longer an ITAR tax on guns or parts manufactured under the Type 07 FFL. 
5. The Type 07 FFL allows firearms manufacturers more freedom in what they make and sell, especially when paired with an 02 SOT. 

07 FFL Requirements

To apply for an FFL regardless of the type you will have to undergo a background check at the federal level. This process will look into the background of all responsible people in your business including sole proprietors, partners, managers, and leadership. Once the background check is complete you have the first review. The next step is that you get a visit from an ATF representative. This is the second and final review. The interview includes a long discussion about the laws of your state and the ATF laws that apply to your business. They will also visually inspect your business and compare that to the information on your application to make sure that it’s true and accurate. Following the in-person review and audit, the field rep will make a recommendation to the nearest field office of the ATF. If everything is correct and your business complies with state and federal laws, the ATF will issue a license. That process takes approximately 60 days. 

What is a Class 3 SOT (Special Occupational Tax)

A Class 3 Special Occupational Tax (03 SOT) is a license that allows the holder to deal in NFA firearms, such as selling and buying, or as an FFL transfer business. It is different from a Class 02 SOT in that the SOT allows you to manufacture restricted firearms. The O3 SOT pairs with:

• Type 01 FFL
• Type 02 FFL 
• Type 09 FFL 

A Class 2 SOT allows you to extend the power of your FFL license type to manufacture restrictive firearms and NFA items such as an AR-15 rifle, barrels, receivers, or complete shotguns. It pairs with:

• Type 06 FFL
• Type 07 FFL
• Type 10 FFL 

The big difference is that a Class 03 SOT applies to those who buy and sell firearms – an FFL dealer – and a Class 02 SOT is for those who manufacture firearms or ammo and want to expand the list of what they can legally manufacture. 

How FastBound Makes Work Easier for a Type 07 FFL

FastBound helps take the mountain of work out of applying for and completing the FFL form, especially the Type 07 FFL form or forms required under the NFA arms regulations. One of the biggest hurdles to those who manufacture firearms or firearms parts, even OEM parts, is the process of disposing of an item and then charting the reacquiring of those pieces into a finished part. With FastBound, the system works to complete that process for you, which decreases the amount of time and labor you would have to invest if you completed that process manually. 

FastBound makes it easier and takes less time to accurately document:

• Acquisition of new items and materials
• Disposition of existing gun parts, materials, etc.
• Reacquisition of disposed parts and materials as they become new parts or firearms

Under a Type 07 FFL, you must document parts or materials that eventually become higher parts and firearms, such as an upper receiver or lower receiver. FastBound makes that documentation process fast and accurate. The Type 07 FFL controls the manufacturing of gun parts and firearms and has accurate BoundBooks or records that an FFL dealer would need to ensure that their FFL license type remains in compliance. 

FastBound is a resource that helps keep your firearms business in compliance without the massive amount of time it would take to perform accurate documentation and legally track inventory, guns, sales, and transfers. Contact us to learn more about how FastBound can help your firearms business today.