The Gun Control Act, as amended by The Firearms Owners` Protection Act of 1986 (P.L. 99-308), requires that persons engaged in the business of dealing in, manufacturing, or importing firearms, or manufacturing or importing ammunition, obtain a Federal Firearms License (FFL). The federal firearms licensing system is administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), an agency of the U.S. Department of Justice.

Under the Gun Control Act, a "dealer" is defined as any person who is "engaged in the business of selling firearms at wholesale or retail," "repairing firearms," or "making or fitting special barrels, stocks, or trigger mechanisms to firearms," or who is a pawnbroker. As applied to a dealer, the term "engaged in the business" refers to "a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of obtaining livelihood through the repetitive purchase and resale of firearms." However, "a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms" or "a person who makes occasional repairs" or "who occasionally fits special barrels, stocks, or trigger mechanisms to firearms" is not considered "engaged in the business" and is not required to obtain an FFL. As applied to manufacturers and importers of firearms or ammunition, "engaged in the business" means, similarly, a regular business with the principal objective of livelihood.

To be eligible to obtain an FFL, a person must meet the following requirements:

1. At least 21 years of age;

2. Has not been convicted of a crime punishable by imprisonment for a term exceeding one year; is not a fugitive, an unlawful user of or addicted to a "controlled substance," an illegal alien, a person adjudicated mentally defective or who has been committed to a mental institution, a person who has renounced U.S. citizenship or who has been discharged from the Armed Forces under dishonorable conditions, is not subject to a court order restraining him or her from harassing, stalking, or threatening an intimate partner or child of such partner;

3. Has not willfully violated federal firearms law or regulation;

4. Has not willfully withheld or failed to disclose any information required, or has not made any false statement in the application;

5. Has in a State premises from which he conducts or intends to conduct business (a business or home as long as it is a permanent structure.) The business must be open to the clientele designated by the licensee to be served;

6. Certifies that (a) "the business to be conducted under the license is not prohibited by State or local law in the place where the licensed premise is located;" (b) "within 30 days after the application is approved the business will comply with the requirements of State and local law applicable to the conduct of the business;" (c) "the business will not be conducted under the license until the requirements of State and local law applicable to the business have been met;" (d) "the applicant has sent or delivered a form to be prescribed by the Secretary, to the chief law enforcement officer of the locality in which the premises are located, which indicates that the applicant intends to apply for a Federal firearms license;" and (e) "the business will not be conducted under the license until the requirements of State and local laws are met," including local zoning ordinances.

A person who wishes to obtain an FFL must submit to the BATFE regional office the appropriate form (ATF form 7), fee, photograph, and fingerprints obtained from a law enforcement agency. (Write BATFE at P.O. Box 2994, Atlanta, GA 30301 or call 404-417-2750.) The BATFE has 60 days to approve or reject the application. Licenses and fees are:

For Other than Destructive Devices	Initial Application Fee	Renewal Fee
Manufacturer	$150	$150
Importer	$150	$150
Pawnbroker	$200	$90
Dealer	$200	$90
Collector of Curios & Relics	$30	$30
For Destructive Devices
Manufacturer	$3000	$3000
Importer	$3000	$3000
Dealer	$3000	$3000
For Ammunition
Manufacturer	$30	$30

Importers and manufacturers of machine guns, short-barreled rifles and shotguns, and destructive devices must also pay a special occupational tax of $500 per year if gross revenues do not exceed $500,000, and $1,000 if revenues exceed $500,000.

FFLs are valid for three years at the location listed on the license and, for dealers, at certain gun shows. A separate license must be obtained for each additional business location. FFLs are not transferable. Licensees must comply with federal record-keeping requirements. Licensees` records and inventory are subject to annual compliance inspections by the BATFE and to inspection at any time during a criminal investigation other than of the licensee. Licensees are required to "respond immediately to, and in no event later than 24 hours after the receipt of, a request by the Secretary for information contained in the records" kept by the licensee, in the "course of a bona fide criminal investigation." Licensees must report firearms thefts or losses to the BATFE and local law enforcement officials within 48 hours.

A licensee`s business inventory should be kept separate from personal collection firearms. Licensees who transfer, from a personal collection, firearms acquired as business inventory must, if the firearms were in the collection for less than one year, first transfer them back to business inventory. If the firearms were held more than one year, a separate "personal logbook" must be maintained.

A licensed collector may acquire, hold, or dispose of firearms defined as "curios and relics" by the BATFE, but not engage in business as a dealer or importer. Licensed collectors may have the annual inspection of records and inventory performed at a BATF office located near the licensee`s premises.