Can anybody really get a license to sell fully automatic weapons, and then sell to "friends and family, colleagues, or interested buyers"?

Factual Questions
1

I had the apparently misinformed idea that fully automatic weapons were illegal. Now I see a claim that all you need is the magic of an FFL and you too can become a vendor, buy your own at wholesale cost, and sell to friends and family!

As seen here

Contrary to popular belief, it is perfectly legal for a law-abiding citizen of the United States to own/possess a machine gun (sometimes called a full-auto firearm or automatic weapon).

The absolute easiest way is for someone to get a Federal Firearms License or “FFL” (even a home-based FFL ).

Depending on the type of FFL, and if the FFL-holder becomes an Special Occupational Taxpayer (SOT) the FFL-holder can purchase and sell machine guns, regardless of when they were made (more on this below), and they can even legally make their own machine guns or lawfully convert current firearms into full-autos. The best part about getting an automatic weapon as an FFL is that you can get it at dealer cost and fast.

By getting your Federal Firearms License (FFL) you not only get access to the manufacturer’s costs (thus skipping the middleman), you can also sell those guns to friends and family, colleagues, or interested buyers.

You can become the go-to guy in your circle of friends in no time. And yes, home-based FFLs are allowed!

2

NO. You can indeed become a dealer with a Class III license. A friend of mine is one such. That allows you to sell transferable full auto weapons to the public after they get approved by the BATF. Those are weapons produced before the ban, not new ones. It is a closed supply. No new weapons can be added to the list. They are expensive, like tens of thousands of dollars. New weapons can only be sold to law enforcement departments and the military.

3

That’s not true.

The laws on automatic weapons start with the National Firearms Act (NFA) of 1924. This restricts “machine guns” (any weapon that fires more than one bullet with a single trigger pull), short barreled rifles (SBRs), short barreled shotguns (SBSs), and “silencers” (more properly called “suppressors” since they don’t actually make the weapon silent as shown in the movies, but “silencer” is the legal term used).

The short barreled rifle part of this is proof that stupid gun laws are not anything new. The original intent of the law was to restrict easily concealed weapons. However, gun manufacturers were making a lot of money off of pistols and the public wanted to be able to buy pistols, so pistols were removed from the NFA before it was passed. There wasn’t a huge market for SBRs so not enough people cared, and that restriction stayed in. But you end up with the absolutely idiotic restriction that SBRs are restricted because they are concealable but more easily concealed pistols are not regulated as part of the NFA.

You can still make an SBR. You just have to register it with the NFA and pay the tax for it. The amount of the tax is unchanged from 1924, and remains $200, a significant amount of money in 1924, but today, not so much.

You could still manufacture machine guns when the NFA went into effect. But again, you had to register it and you had to pay the $200 tax.

Any transfer of an NFA registered weapon also requires you to pay the $200 tax.

The NFA registry for machine guns was closed in 1986. Any weapons registered prior to 1986 are still transferable, but no new weapons can be added to the list. So you can still buy a fully automatic weapon as long as it was NFA registered before 1986. Since the supply of pre-1986 weapons is limited, they tend to be very expensive.

From a crime point of view, this isn’t worth worrying about. There have only been something like 3 or 4 cases since 1924 of an NFA registered machine gun being used in a crime. People aren’t buying NFA machine guns and going on shooting sprees with them. A military assault rifle is a machine gun. People are not using military assault rifles in crimes. The civilian AR-15 is not an assault rifle. It’s just a rifle (and a relatively low-powered one at that).

You can own a fully automatic M-16 (the military assault rifle version of the AR-15), as long as it was manufactured prior to 1986. You can’t own a military M-16 if it was manufactured after 1986.

The OP is partially correct, but only partially. With the right licensing (FFL/SOT) you can manufacture your own brand new fully automatic weapon. The part that is incorrect though is that you can’t sell it. You still have to register it with the NFA and pay the necessary taxes (and fill out lots of paperwork) but the weapon is non-transferable. You can’t sell it. You can’t give it to other family members. The NFA registry for transferable machine guns is closed. You can’t add anything to the list.

4

If you have an FFL/SOT then you can sell a fully automatic machinegun to your friends and family as long as there is no state or local law forbidding it. A lot of states have their own laws banning them even though they are legal at the federal level. Provided you live where civilians can own them, here is the process to sell one to your friend or family:

  1. They save up about $20,000 - $100,000 for the cost of the machinegun and $200 for the cost of the transfer tax.
  2. They set up a gun trust, or corporation or decide to purchase it as an individual.
  3. They get fingerprinted and fill out the Form 4 application and have it signed by the chief law enforcement officer in their county (usually the Sheriff). In a county or state where machinegun ownership is allowed, there are Sheriff’s who refuse to sign Forms 4, creating a de facto ban on their own accord. There are ways around that, though.
  4. Pay the $200 and wait 4-5 months for the ATF to approve the transfer.
  5. Finally they get their machinegun.
    Not as exciting as it first seemed, huh?
5

Also, you don’t get “wholesale pricing”, (whatever that even means with respect to firearms). There is almost no markup on firearms. A dealer makes about 10% from the sale. That’s it. A gun store makes its money by selling accessories, where there is a 50%-100% mark-up. It’s a lot like a gas station. The gas gets them in the store. The money is made off the other stuff.

It is true that a dealer can get a brand new M4 machinegun for about $1000, when an equivalent pre-86 model costs tens of thousands of dollars. However, the dealer cannot sell his/her M4. The dealer is only allowed to keep one in stock for sample and demonstration purposes. The dealer can sell brand new M4s to federal agencies and other dealers. But they can’t keep inventory for the purposes of selling.
Simply to keep the one (yes one. justification and ATF approval is required for a dealer to keep more than one sample)… simply to have the one sample, the FFL/SOT dealer needs to have an official written request from an agency stating they are interested in that particular model and would like to check it out. Without that letter, the dealer cannot get the machinegun. The dealer cannot only acquire more to fulfill purchases from an agency. Without the purchase order, they can’t get more.

In reality, a dealer who is interested in possessing machineguns more than he/she is in selling them just makes friends with a senior official at some police department and they get a demo letter signed that includes hundreds of firearms that a police department has no business or interest in owning. The dealer just writes out a wish list/ shopping list and gets someone to sign it. Now they can buy at least one of anything they want. But they still can’t sell it to friends or family. They can only sell the transferable stuff mentioned in my post above. They can’t sell the new stuff to private individuals, trusts or corporations.

6

A final note on this is that as a dealer you don’t really own these cheap, post-86 machineguns. You can only possess it for as long as you’re in business and have a dealer license. It’s not permanent.

7

This is not exactly correct.

A dealer running out of his home sourcing from distributors like CDNN may only make 10%. But a brick and mortar business like mine the profit is 16-24% depending on the type/make/model of firearm. Sometimes it’s as much as 40%. It’s enough that we could make it work without having to rely on accessory sales if we had to.

There most certainly is a wholesale price. What I pay a distributor (most dealers are supplied by middle man distributors, not directly from the manufacturer) is noticeably less than what it is sold for.

Also, volume matters significantly. While I can out price a kitchen table dealer because I pay less for buying more, a Dunhams can beat my brains out.

8

10% may have been a low number. I can believe 16%-24% without looking up costs vs sales. But what are you making 40% on?? Our profits may also have been low because we were primarily selling to agencies and when we did sell to individual officers, we often sold at the same price. I don’t recall there ever being a quantity discount.
I worked at two brick and mortar companies around the turn of the century that had an FFL/SOT. One was a gun range. Whenever we sold guns out of there, the price was calculated by simply adding 10% to the dealer catalog. Everything was purchased from the one distributor–I can’t remember the name.
The other place was much more exciting. We were master distributors for Colt, Bushmaster, Benelli and others; LE Dealers for Glock; and the sole-source law enforcement dealer for H&K in the southeast. If any dealer or agency in the southeast of the U.S. wanted to buy an MP5 or even a hi-cap magazine (remember the time) for an H&K, they had to get it from us. We always purchased everything straight from the factory, whether it was a handgun or a machinegun.

We’d get a lot of interesting things in trade and some things, the manufacturers would just send us for no reason. We had an actual Glock 18 as a trade-in from a police department that probably never should have purchased it in the first place. And H&K sent us their MP5K Operational Briefcase as part of a huge package when we won the sole source contract for the SE. Fun times.

Back then, there weren’t a million different tactical flashlights–there was only Surefire. And there wasn’t a million tactical clothing and gear companies. There was pretty much, Eagle, Blackhawk, Tactical Tailor, also Hatch and Camelbak for gloves and, well, Camelbaks, respectively. And Pelican for cases, and if you’re NASA, for flashlights. (Pelican flashlights were the only flashlights authorized for use by the space shuttle maintainers because they polymer, not metal). Anyway, master distributor pricing for all of these companies was pretty standard at 50% of MSRP. We generally sold everything at 30% above cost, so a great deal for individual officers in the know. We mainly just dealt with agency purchases, though, like I said.

Sorry for the long post. You really threw me for a trip down memory lane. One day I’ll share the story of how we help start the company, 5.11 Tactical. 5.11 used to be a specific model of trousers sold by a company called Royal Robbins. We became master distributors for Royal Robbins specifically to sell 5.11 model pants because all of the federal instructors at Red Stone and other places were wearing them and all the LEOs who went to those schools saw them and wanted a pair for themselves, and it just kind of spread. I was present during the meeting where we convinced one of their VPs to branch off, buy the rights to the pants and start a new company. Now everyone makes “tactical pants”.

9

So, we have heard from some here with experience in the FFL world, Still, going back to the OP, would y’all say the article quoted is painting an overly upbeat picture of how to become a trader in full autos and what you can do once you are one? Is it like they’re sort of glossing over how hard or unpleasant are the hard or unpleasant parts of the process? (I mean in either case I could expect it’s because the authors want the interested persons to become their client in navigating the legal hurdles, but don’t want to scare them off completely.)

10

To be clear, it’s not an article, it’s an ad for a training course so that you too can “In just 2 hours, learn everything you need to know to get your FFL.” So it’s includes some hyperbole, but appears to be factually accurate.

11

How does Hollywood manage when they want to depict the characters using automatic weapons? Are the guns disabled someway to be able to only fire blanks? (or something else)

12

It is not as easy as you think to get a FFL (the following is from California, but each state and the Feds have rules)

To get an FFL, the ATF requires that you basically be a law-abiding US citizen or a permanent resident over 21 years of age who can legally own a firearm. Pretty simple stuff really. The paperwork is annoying, and you have to demonstrate you are planning to operate a business, but that’s not too hard.

What is hard for would-be California FFL holders is that the ATF also requires that you have all appropriate state and local licenses before you can be in business. … 1. First you need to a Certificate of Eligibility from the California Attorney General’s Office. This is an annual requirement that basically proves you can legally own a firearm and have an FFL. All of your employees must also get one. They can only be applied for electronically and cost $71 for the first year.
2. After you get your Certificate of Eligibility, you’ll need to register on the Centralized List of Firearm Dealers.
3. You’ll need to purchase state-approved magnetic card swipe and other digital equipment as part of the background check procedures for California. This is all explained when you register with the state.

You cant get a machinegun license at all in California, and several other states.

13

It’s also possible to convert a single-shot AR-15 into a multi-shot assault rifle by replacing a single part on it. As I understand it (though those who know more should feel free to correct me), selling that one part is subject to all of the same restrictions as selling an entire full-auto weapon, but it’s not all that hard for a person with a half-decent home workshop to make one themself (much easier than making the entire gun from scratch), and there are also kits that one can legally buy to make it even easier to make one.

14

Also, bump-stocks which effectively make an AR-15 (and guns like it) behave as if it was fully automatic. Very recently the SCOTUS ruled they are legal.

15

Not really, but it does increase the rate of fire.

16

It’s a pretty low rate of fire compared to an actual automatic rifle. And using a bump stock is also technically one shot per trigger pull, which is the reason for the ruling. A true automatic weapon fires multiple shots for single trigger pull. A bump stock is still one shot per trigger pull. The device just allows you to cycle the trigger fairly quickly.

Every automatic weapon has a single part that is the “weapon”, which is the part that gets the serial number and is the part that is NFA registered. Typically, that part is the “receiver”, which is the part that everything else attaches to. For something like an AK-47, the “receiver” is pretty obvious. It’s also basically a square U-shaped piece of sheet metal, so it’s nothing fancy. For an AR-15, which part needs to get the serial number is a little more difficult, because the AR platform has a two-part receiver (upper and lower). The ATF chose to use the lower receiver in that case.

Using the lower receiver on an AR made a lot of sense back when the AR was first created. But the lower receiver is just the part that the trigger group and the buffer tube for the stock attach to. It’s not under much mechanical stress when the weapon is fired. This means that you can 3-D print a perfectly usable AR lower receiver.

The AR isn’t the only weapon that you can easily make a working copy of at home. The AK-47 receiver is literally just a piece of bent sheet metal. That was the entire point of its design, to be easily built using low-cost and low quality tools. They had a lot of issues getting that to work, so early AKs ended up using a milled receiver, but the point is that the build issues have been pretty well sorted out by now and you can easily make an AK receiver with just some sheet metal and some basic metal-working tools.

As for auto-sears or conversion devices (the part that @Chronos is referring to), those are indeed NFA regulated parts, and the auto-sear or conversion device itself is considered the “weapon”. It is perfectly legal for you to put an NFA registered auto-sear into a semi-auto AR-15 (important note - the auto-sear or conversion device has to be NFA registered, the rest of the AR does not). You can also create your own auto-sear at home with some reasonable metal-working tools, but you have to register it per the NFA and pay the tax on it. And again, the NFA registry for transferable automatic weapons has been closed since 1986, so you can never transfer the auto-sear to anyone else. And if you don’t fill out all of the NFA paperwork and register the auto-sear, merely possessing it is a felony. You don’t even need to have it installed in a weapon. If it’s sitting in a box on a shelf in your garage all by itself, merely possessing a non-NFA registered auto-sear is a felony.

Two men, Kristopher Ervin and Matthew Hoover, were selling metal cards with a diagram on them. All you needed to do was use a Dremel or a jig saw to cut along the lines, and you could create a device that, when installed on an AR-15, would convert it into a fully automatic weapon. Even though the device was just a small piece of sheet metal with some lines drawn on it, the ATF ruled that the device was technically a machine gun conversion device. Both men were sentenced to 5 years in prison for selling unregistered machine gun conversion devices. The ATF takes conversion devices very seriously, even if they are literally just a roughly credit-card sized piece of sheet metal with some lines drawn on it.

Similarly, 3-D printing an AR lower receiver, or bending a piece of sheet metal to make it into a functional AK receiver, and failing to NFA register the device with the ATF, is a felony. The popular term for these devices is “ghost guns”. This gets into some murky areas of the law, since manufacturing your own non-transferable weapon for your own use has always been legal. There have been a lot of recent laws passed to target ghost guns, though in reality they aren’t the huge problem that some folks make them out to be. The number of ghost guns used in crimes is actually quite low.

All of the other parts of a gun are not required to be registered, and they are just considered “parts”. You can buy an AR upper receiver, barrel, stock, trigger group, buffer, etc. These parts are not regulated and anyone can buy them. It’s only the lower receiver that is regulated. Similarly, you can buy parts kits for the AK-47 and many other Soviet, Chinese, and other foreign manufactured weapons. It’s not just AR weapons that are regulated. The AR platform is by far the most popular, and has the most variations of accessories and parts available. That’s why ARs are always in the news, the criminal happened to be using the most popular rifle platform out there, not because it’s some super-powerful military weapon (it isn’t), but just because it’s the most popular and customizable. But ARs are not alone. You can buy parts and kits for just about every weapon out there.

An AR-15 lower receiver (perfectly legal to buy the semi-auto version, full auto version required to be NFA registered):

AK-47 receiver

17

Thanks to the posters who made lengthy and informative posts! This thread has been very educatonal.

18

Well…

A bump stock modified firearm can fire 400 to 800 rounds a minute, experts said. - SOURCE

And…

The M16 uses the 5.56mm NATO (.223) caliber cartridge, with a muzzle velocity (the speed of bullet leaving the rifle) of over 900 meters per second (over 3,000 feet per second), and has a maximum effective range of 600 yards,[6] with a rate of fire (how fast the gun shoots) of approximately 800 rounds per minute. - SOURCE

Seems near enough to me.

If auto weapons are ok to be regulated one needs to ask why them and not other guns? The obvious reason is their rate-of-fire. Yet SCOTUS decided a high RoF is fine depending on how that is achieved. Which seems silly.

19

A lot of rifles have a 32-40% profit margin.t.
There are some handguns that have huge profit margins as well.
The Ruger LCP .380 or .22 goes for anywhere from $339-$379. The wholesale right now is $199. Even when on sale for $269 that’s a large profit percentage.

Like anything else the more you buy from the distributor the lower the unit price goes. This is how Dunhams is able to high volume at lower prices nationwide.

20

Every firearm that exists has a prop-gun equivalent. The ones that fire use 8mm or 9mmpak blanks and cannot be converted to use real ammo. Hollywood guns that are not shown firing typically don’t even fire blanks. They are many times made of rubber. There is absolutely no reason to use a real firearm, even with blanks, on a production set. Tell that to Alec Baldwin, right?

BTW, blanks can be dangerous also.