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Federal Exise Tax


Chuck Anderson

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Did I read a news report correctly? The Federal Government is going to stop charging small gunsmiths (less than 50 guns manufactured per year) the Exise tax? If so does anyone know when this will go into effect? It seems like this might make things a lot easier buying a complete gun instead of trying to monkey with sending in the frame only. I know this is one of the things that kept me away from a Brazos. I just didn't like the idea of giving the feds an extra $350.00 on top of the price of a new gun.

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I can't say for sure but I'm willing to bet that Bob and Ingi sell more than 50 guns a year so it might not apply to them.

From the BATFE website:

As of October 1, 2005, any pistol, revolver, or firearm that was manufactured, produced or imported by a person who manufactures, produces or imports less than an aggregate of 50 such articles during the calendar year is now exempt from the tax.

I don't know how many guns Bob makes versus how many STI's he sells. If he makes less than 50 guns a year on frames that he supplies than he is exempt from charging FET on those guns. On the guns from STI FET would still be charged. I could be wrong.

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On top of that, who's considered the manufacturer by the BATF?? STI or the gunsmith. The "gun" is the frame, per se - the end sales price of that gun is all that is really affected by the gunsmith. Depending on how they interpret it, I could see this making zero difference to the price we pay for the typical competition gun....

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On top of that, who's considered the manufacturer by the BATF?? STI or the gunsmith. The "gun" is the frame, per se - the end sales price of that gun is all that is really affected by the gunsmith. Depending on how they interpret it, I could see this making zero difference to the price we pay for the typical competition gun....

If you follow Phil Terry's link the ATF has guidelines to determine who the manufacturer is. IN the case of a gun build on a base receiver the gunsmith is considered the manufacturer.

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So it looks like the date is Oct 1, 2005. The FET is a fair chunk of money on some custom guns. On handguns it is 11%. This could work out very well from some of the smaller smiths and make them a much cheaper option. As far as Brazos the rule would only apply to the guns he makes from a frame, not the complete STI guns. Or at least that would be my interpretation.

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