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Importer
You are an importer if you:
- Bring an article into the United States or the District of Columbia from a source outside of the United States ; or
- Withdraw an imported article from a customs bonded warehouse for sale or use in the United States or the District of Columbia.
[Refer to 27 CFR 53.11 (definition of importer)]
| You are liable for FAET on a one-time or occasional importation if you: | You are not liable for FAET on a one-time or occasional importation if you: |
| • Acquire a firearm or ammunition outside the United States for the sole purpose of using the firearm in the United States; or | • Import a firearm or ammunition (that you previously owned and had in the United States) for personal use; |
| • Import firearms or ammunition in knockdown condition (unassembled but complete as to all component parts) | • Import foreign or domestic firearms or ammunition that was sold or used in the United States anytime after 1918; |
| • Acquire a firearm or ammunition during a stay outside the United States, use the firearm during your stay, and then import the firearm into the United States; | |
| • Import a firearm or ammunition for a legal alien to temporarily use during a stay in the United States. Some examples include lawful sporting purposes, official law enforcement, or repair; or | |
| • Import parts for firearms or ammunition. |
The person who actually causes the importation of the article is liable for FAET.
Scenario: I am a Federal Firearms Licensee. Since I have a Federal Firearms License, a customer asks me to special order a firearm from France and import it into the United States. I complete the required paperwork, import the firearm, and sell the firearm to my customer. The customer reimburses me for customs duties and fees. Who is liable for FAET in this instance?
Answer: In this instance, the customer is liable for FAET since he actually caused the importation of the firearm (He would be referred to as the beneficial owner. ). Since you merely acted as an agent, and imported the firearm on behalf of the customer, you are not liable for FAET (You would be referred to as the nominal importer ). [Refer to Revenue Ruling 69-393 and Revenue Ruling 72-215 ]
If you import an article for personal use, you calculate your FAET by using one of the following two options:
(1) Calculate the sale price on your own.
Your sale price will be the total of the following charges:
• The entry value that Customs uses to determine their duty;
• The import duty;
• Customs handling fees;
• Freight and delivery charges to the port of entry; and
• Any other costs of importing.
Note: If the entry is duty free (i.e., you are a member of the U.S. Armed Forces or the article is valued below the minimum established by Customs), you must still include the duty that would apply if you were importing the article under normal conditions in your calculation.
When calculating your sale price, you do not need to include:
• State or local taxes; or
• Other expenses you incur after importation.
(2) Ask TTB to calculate your sale price.
If you ask TTB to determine your sale price, you will need to send us details (such as pictures, purchase invoices, and other written descriptions and evaluations). Please allow several weeks for us to make a determination of your FAET liability.
Manufacturers and Producers
You are a manufacturer if you manufacture or produce a taxable article from scrap, salvage, junk material, new material, or raw material by:
- processing, manipulating, or changing the form of an article; or
- combining or assembling two or more articles.
[Refer to 27 CFR 53.11 (definition of manufacturer)]
Yes. If you manufacture an article and sell it in knockdown condition (unassembled but complete as to all component parts), you are liable for FAET.
[Refer to 27 CFR 53.11 (definition of manufacturer)]
If you purchase an article in knockdown condition and assemble it, your liability for FAET will depend on the following factors:
- the amount of labor, material, and overhead required to assemble the article; and
- whether you assemble the article for business or personal use.
[Refer to 27 CFR 53.11 (definition of manufacturer)]
If you manufacture a firearm for your personal use, you are not liable for FAET. (Note: this exemption does not apply to partnerships and corporations)
Yes. If you manufacture an article and use it in the course of your business, you are liable for tax. FAET will attach on an article once you begin using it during the course of your business. Some examples of business uses of articles include:
- Sales samples;
- Demonstration models;
- Use by security force; and
- Use by writers in preparing articles.
[Refer to 26 U.S.C. 4218 , 27 CFR 53.111 , and 27 CFR 53.112 ]
You must calculate your FAET on the price that other manufacturers, producers, or importers sell those same (or similar) articles in the ordinary course of trade.
[Refer to 26 U.S.C. 4223(b) , 27 CFR 53.115 , and 27 CFR 53.143(b) ]
If more than one person is involved in the manufacturing process, liability for FAET will depend on what each person furnishes or contributes to the manufacturing process. You must consider such factors as labor, materials, manufacturing facilities, patents, trademarks, title, and price controls. The person who actually causes the manufacture of the product is liable for FAET.
| Example | If you furnish: | and the other company furnishes: | then… |
| 1 | materials labor manufacturing facilities | patents trademark title sales control production control ownership of tools | the other company is the manufacturer and liable for FAET. |
| 2 | materials labor Title | patents | the other company is the manufacturer and liable for FAET. |
| 3 | materials labor title sales controls tools and dies | trademark materials price controls | you are the manufacturer and liable for FAET. |
| 4 | materials labor title sales controls product controls | patents | you are the manufacturer and liable for FAET. |
| 5 | materials labor manufacturing facilities ownership of tools | title proprietary interest right to use | the other company is the manufacturer and liable for FAET. |
Gunsmiths
If you perform gunsmithing on a firearm, your liability for FAET will depend on the type of work you perform on the firearm. See the Gunsmith Information packet for detailed information on gunsmith activities and how FAET liability may pertain to these activities.
| You are liable for FAET if you: | You are not liable for FAET if you: |
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| The gunsmith is considered the manufacturer if: | The customer is considered the manufacturer if: |
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| He or she alters a firearm in connection with a sale to the customer (however, the gunsmith’s alteration of the firearm must constitute manufacturing). |
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| The customer is liable for FAET if: | The customer is not liable for FAET if: |
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| He or she uses the firearm for personal use after delivery from the gunsmith. |
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Ammunition Reloaders
| You are liable for tax if you: | You are not liable for tax if you met all of these conditions |
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[Refer to 27 CFR 53.11 (definition of shells and cartridges)]
Your customer is liable for FAET on reloaded ammunition if he or she does not use it for personal use.
[Refer to 27 CFR 53.11 (definition of shells and cartridges) and 27 CFR 53.112 ]
Tax-free Registration Holder
Requirements for Tax-Free Registration Holders
TTB has approved your application to engage in the tax-free transaction categories for which you applied and qualified. Your tax-free registration number is reflected in Item 10 and is effective on the date that your application is signed by the Director of the National Revenue Center (NRC) in Item 10(b).
The following information explains the requirements you must meet to maintain your business.
- How to Report Tax-Free Sales
If you make tax-free sales during any calendar quarter, you must report these tax-free sales on a TTB Form 5300.26, Federal Firearms and Ammunition Excise Tax Return. You must first show these sales in Item 8 – The sales price of all articles sold. You must then show these sales in Item 10 – The sales prices of all articles sold tax-free along with your TTB Tax-Free Registration Number. We prefer that you file your TTB Form 5300.26 electronically through Pay.gov Download TTB F 5300.26 [PDF]. - Where to File using a Paper Form:
Alcohol and Tobacco Tax and Trade Bureau
Excise Tax
P. O. Box 979055
St. Louis, MO 63197-9000
If you filed your original application on paper, and haven't requested that your data be migrated to our Permits Online system, you should file these amendments on the TTB forms described in the applicable regulations. If you filed your original application through Permits Online, you should also electronically file your amendments in Permits Online. For more information about changes see the regulations at 27 CFR 53.1-187.
- How to Change the Category or Categories on your Approved Registration
If you want to add or drop a category listed in Item 6, send your current registration and a new, complete application on TTB Form 5300.28 to TTB via Permits Online or to the below address. Changes are effective when TTB approves the application. - How to Change your Name or Principal Place of Business
Send a letter to report any change in your name or principal place of business to TTB at the below address within 30 days. Include your registration number. - How to Report Changes in Business Ownership or Control
Send a letter to report any change in business ownership or control to TTB at the below address within 30 days. Include your registration number and the details of the change. - How to Cancel your Certificate
Send your approved certificate of registry along with a written request for cancellation to TTB at the below address. - Where to Send the above Notifications
Alcohol and Tobacco Tax and Trade Bureau
National Revenue Center
8002 Federal Office Building
550 Main Street
Cincinnati, OH 45202
Title 27, Code of Federal Regulations, Section 53.24(a) In general – (1) Form of records – provides that the records required by the regulations in this part shall be kept accurately, but no particular form is required for keeping the records. Such forms and systems of accounting shall be used as will enable appropriate TTB officers to ascertain whether liability for tax is incurred and, if so, the amount thereof.
Your tax-free registration approval mandates that you adhere to federal laws governing tax-free transactions under Title 26, United States Code, Section 4221, and federal regulations under Title 27, Code of Federal Regulations, Part 53, Subpart K.
You can find additional information regarding tax-free transactions under the Firearms and Ammunition section of our website at https://www.ttb.gov/firearms.