What is a Home-Based FFL? A Detailed Guide

Obtaining a home-based FFL is allowed and a fairly easy process. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) allows people to acquire a home-based Federal Firearms License (FFL) as long as there is no zoning restriction in their state and they meet federal, state, and local compliance.

Individuals planning to manufacture, sell, import, and export explosives are supposed to obtain a Federal Firearms License to comply with the legal obligations of running an FFL business. FFL comes in different types, one of which is the home-based FFL. If you plan on running this business from home, you can start as soon as you have the FFL. Before you learn about the process of applying for the license and federal regulations, note that each state has certain regulations regarding a firearm business. While it’s legal in some states, a home-based business of importing and selling firearms can be prohibited in another state.

In this post, we’ve explained the Federal Firearms License, how to achieve that, and FFL regulations you should be aware of.

A Home-Based FFL: What Is It?

The increased sale of guns and explosives on the internet has encouraged Americans to set up a home-based FFL business and earn a side income. It’s easier to set up a home-based gun store than a brick-and-mortar business. Now that the license for home-based regulated items is allowed, more and more Americans are considering it.

As mentioned above, FFL is a license issued to dealers involved in the manufacturing, selling, transporting, importing, and exporting of guns and explosives. Having a home-based FFL means you can conduct a firearm business from your residence, thus preventing the need for a commercial space to conduct business operations.

The biggest benefit of running a firearm business from home is the convenience. It saves you a significant amount of money on setting up your gun store. Since there’s no separate location for your gun store, you don’t have to pay extra on the utility bills. You will most probably not need employees to manage your physical store, which can save you substantially on the payroll. The reduced overhead cost combined with the convenience makes it the best choice for individuals planning to enter this regulated industry. Moreover, a home-based firearm store can help increase your profit margin.

As far as customers are concerned, they will gladly buy firearms online, as it’s more convenient for them to browse the firearm store online and select their desired weapon from home than walking into different gun stores.

The separate license for home-based firearm business doesn’t mean the merchant will be exempt from the strict state-based and federal regulations associated with tobacco, explosives, and firearm products. You must adhere to the guidelines issued by ATF, whether you are operating a firearm business from home or a brick-and-mortar store.

You might wonder what makes a home-based FFL different from the regular store-based firearm business. The difference lies mainly in the zoning requirements. Whether or not you can operate a home-based firearm business depends on your area’s zoning requirements. You need to get approval from your state’s zoning department and submit that along with the FFL application to the ATF to be considered for a home-based firearm business in the US.

Why Should You Get a Home-based FFL?

For most people, operating a physical store for firearms can be expensive. Having an FFL allows you to make money selling your guns online. With a home-based FFL, you can get the weapons shipped to your place. Based on the FFL type you choose, you can have them shipped from the local dealer or import them from international countries. That’s why most American FFL holders operate remotely. Here’s what you can do with a home-based FFL.

Sell Guns Online

You will be prohibited from having foot traffic for a home-based firearm business. So your best bet to sell firearms is online. With a home-based business, you can order firearms from the distributor and have it delivered to your doorstep. Once done, you can list them on your website. You can add a robust and secured online payment gateway to process the payment through credit card or debit cards.  If you don’t have an online store for firearms, you can use the auction site to put them up for sale. The business works like other online businesses.

When a customer places an order for a gun, you can ship their order to their address. Note that a Federal Firearms License is not needed if you are dealing with ammunition, but it’s advisable to have one as most distributors would not sell any weapon or weapon-related stuff to someone without a valid FFL. Besides, ammunition is mostly ordered with guns.

Occasional In-person Sales

While foot traffic is not allowed in your residential firearm business, you can sell weapons to your close friends and the known ones occasionally. You can advertise the weapons to those who don’t mind coming to your place for in-person purchases. However, avoid inviting too many people, as that may lead to the violation of the ATF and zoning laws.

Overview of Home-Based FFL Requirements

The requirements for obtaining a home-based FFL are, fortunately, similar to those of other types of Federal Firearms Licenses. Here’s what it requires:

• You must either have citizenship of America or be a permanent resident
• You must be more than 21 years old
• You must not have any history of crimes that prohibit you from keeping or dealing with guns and ammunition
• Your residential location must be compatible with the type of your business.
• Your zoning requirements allow a home-based FFL

Before you proceed with the application, it’s advisable to research the local zoning laws in your state and gun-related regulations. Moreover, a dedicated space where you can store guns and ammunition and conduct a firearm business safely is crucial to getting approval from the zoning department.

Another important thing to note here is that you must have a registered business in the state you are planning to start a home-based firearm business. A physical location isn’t required, but a registered business is mandatory.

Understanding Zoning Requirements

Zoning requirements for FFL can vary depending on your location. It mainly depends on the local and state regulations. At times, the zoning department in your state might allow home-based FFL, but the local regulations might impose strict regulations that restrict people from obtaining a Federal Firearms license.

Zoning requirements are developed to determine the types of businesses that can operate in the residential and commercial space within a particular area. It also limits the foot traffic to the places that can handle it. If you are planning to start a firearm business at home, it’s important to adhere to the zoning requirements to ensure compliance with your local regulations. The zoning regulations specifically target regulated businesses, foot traffic in your area, parking, noise, and so on. You must work with the local zoning department to ensure your business operations are in line with the state and local restrictions.

To learn more about these restrictions, you must contact the local zoning department in your area. They will tell you the regulations relevant to your specific residential space. Your zoning department might require you to have additional licenses, such as a home occupation permit and a special business license for running a firearm business. You must clarify the requirements and restrictions with the zoning department to prevent any legal complications and ensure a healthy relationship with the local municipality.

Step-by-step Process for Applying for Home-Based FFL

Once you have determined the federal regulations and local zoning requirements, the next step is to process the application. Here’s how to apply for a home-based Federal Firearms License.

Step 1: Fill out the ATF Form 7/7CR. It’s an application for a home-based FFL form that contains your personal and business information. Remember, you need to mention the type of FFL you want and how you intend to operate the business from home.

Step 2: Submit the fee. Based on the type of Federal Firearms License type you choose, the fee can vary from $30 to $3000. You can check out the breakdown of the fee later in this post.

Step 3: The documentation requirement depends on the FFL type. Generally, you are required to submit a passport-sized photo with fingerprint cards.

Your application will be reviewed by the ATF. Note that the ATF will run a thorough background check on you. They will review your criminal and compliance records to ensure you are allowed to use guns for commercial purposes and are eligible for a home-based FFL. The ATF will schedule an in-person interview with an agent who will ask you questions based on your application. They will also inquire about your basic understanding of the legal compliance related to firearm use and business.

Once the team is satisfied with the interview, they will send agents for a house inspection. Your home must be compatible with the state, local, and federal regulations to run a firearm business. They will check your neighborhood and the area where you will store or manufacture guns. If the ATF accepts your application, the interview, and the inspection phase, you will be approved for the Federal Firearms License (FFL). You can start your business from home as soon as the license is issued.

ATF Compliance Inspection

The inspection will cover your business premises, i.e. your residential space in case of a home-based FFL. Keep your license documentation handy. They might talk to your landlord and check your space for security and ATF compliance.

The inspection usually takes place during your business hours at your premises, but the team can also run a compliance inspection without providing prior notice. They might check off-site locations where you will be storing guns. The ATF has the authority to revoke a license if the licensee doesn’t allow the inspection team to enter their premises.

Here’s what you can expect from the ATF agents during the inspection:

• Assess your business operations and the intent of starting a home-based firearm business
• Collect information about the business owner
• Ensure that the residential space and your documentation are in line with the local, state, and federal regulations
• Talk to the landlord about the permission to run a home-based firearm business (if they operate in a rental space)

You will get the inspection results along with the ATF’s response regarding your FFL application within a few business days.

How Much Does the Federal Firearms License Cost?

The cost of obtaining an FFL varies depending on the type of FFL you need. It starts from $30 (for Type 3 and Type 6) and can go up to $3000 for Type 9, 10, and 11. Type 1 and Type 2 licenses cost $200, while the 7 and 8 are priced at $150. You must submit the license fee with the application.

Once approved, your Federal Firearms License will be valid for up to three years, post which you can renew it for $30 for the next 3 years. The renewal fee for Type 3 and Type 6 is $30. In addition, you must pay DDTC registration, which can be up to $2250 a year. Note that manufacturers producing more than 50 firearms a year will pay the excise duty of 10-11 percent of the value of the firearms.

The Biggest Challenges of Obtaining a Home-Based FFL

The most obvious reason why you can’t obtain a firearm license is your state laws. Your state might require a commercial space to conduct regulated business. Other than that, the zoning requirements and your landlord might be the biggest challenges in obtaining a firearm license.

The zoning department in your area must be informed that you plan on starting a home-based firearm business without a typical store. Since you are applying for a home-based FFL, you can’t expect foot traffic at home. You should sell guns at gun shows, exhibitions, or online. Another major concern is getting approval from your landlord. If you live in a rental apartment, you need to contact your landlord and seek their permission to use a small portion of your rental space for conducting a firearm business.

You must also mention their contact details in your FFL form, as the ATF will contact the landlord to confirm if they are okay with allowing the tenant to use their residential space for a firearm business.

What Does a Home-Based Firearm Business Allow?

Once your application for a home-based firearm business license is approved, you will be eligible to import firearms from overseas or get the weapons and ammunition at a wholesale price from a local manufacturer in your state. You can save as much as 30% on guns. The approval, however, can be quite challenging if you fail to prove that you won’t use your license for personal purposes.

The license allows you to conduct any kind of firearm business, be it buying a basic handgun from a wholesaler or having an NFA firearm, including machine guns.

Having a registered business, be it a brick-and-mortar store or an online home-based store, is a basic requirement to get approved for a firearm business. Make sure you set a specific area in your home aside for your weapon business. As mentioned earlier, the ATF will inspect your house to ensure it’s suitable for a firearm business.

Bottom Line

That was all about obtaining a Federal Firearms License in the US. Note that the license requirements and whether you can open a home-based firearm business depend on your location and the zoning regulations in your area. It’s important to get in touch with the local municipality and the state’s zoning department to know the requirements for getting a home-based FFL before sending your application to the ATF. Complying with federal and local regulations is crucial to ensure legal business operation.

FAQs

Are you allowed to have home-based FFL?

Most states allow home-based FFL. Contrary to popular belief, they are very popular and most Americans operating a firearm business apply for a home-based Federal Firearms License.

How is a home-based FFL different from the regular FFL?

Both have the same regulations and require the business owner to have a registered business and a clear criminal and compliance history to be considered eligible for starting a firearm business. The only difference is the location where you can conduct a firearm business. In a home-based license, you can operate from a residential space, while a regular license requires a commercial store.

Can I run an FFL business as a sole proprietor?

Yes, you can run it as a sole proprietor. You can have employees to manage your online sales, but that’s completely optional. Most people choose a home-based firearm business to save on overhead expenses, like utility bills and employees’ wages.

Which is better—a home-based or a regular firearm store?

Both have their perks, but a home-based business is most viable, as it doesn’t involve a physical store. That said, you cannot expect foot traffic at home, as that’s prohibited by the zoning departments and ATF. You must weigh the pros and cons of each before choosing.