9/95 Can You Still Get An FFL?

Can You Still Get an FFL?
Larry Pratt
Executive Director
Gun Owners of America
(written for Guns & Ammo 1995)

“Can I still get a Federal Firearms License (FFL)?” I get asked that question a lot these days. Bill Clinton’s endless war on gun owners has made many of us reconsider questions such as “how can I be sure I can always legally purchase firearms?”

The short answer to the FFL question is yes. FFLs are still being obtained by both first-time applicants and being renewed for long-time licensees. FFLs are more costly. The Bureau of Alcohol, Tobacco and Firearms (BATF) is working overtime to reduce the number of licensees. Depending on where you live, new BATF policies could affect your chances. But for most people in most places, an FFL is still available.

I am also asked how this whole mess happened. People are concerned, correctly, that as long as we have an anti-gun President, the BATF will be encouraged to run wild. Yet they also want to know if there was something our side did to cause the FFL troubles. I have been forced to say these problems have been caused by both our friends and our foes.
The Danger of Asking the Government for a Monopoly

The man who owns a store specializing in firearms faces many challenges. Some of them are common to any business: taxes, paperwork, meeting a payroll, and making a profit. There are also additional costs. The labor costs at a quality firearms shop are higher. Unlike a fast food restaurant, the firearms store can’t just hire anyone off the street and pay them the minimum wage. They have to hire knowledgeable people who can answer technical questions about a wide variety of firearms. The staff must also remember all the laws regarding firearms sales, know something about gun safety, and, sadly, keep cool if someone decides to rob the store.

It is a tough business. And there are people in it who have decided to ask Congress to make their business more profitable. Every time the firearms industry ask the government to do something to eliminate ‘competitors’, it asks for trouble. There are those who believe that private FFL’s should be abolished. They forget that every time they say FFL’s should cost more and be harder to get, Dianne Feinstein will agree. Our enemies will gladly raise the price of FFL’s–to the point nobody can afford one.

License costs jumped from $30 for three years to $200 ($90 for renewals) in the last Congress. And there were bills introduced to make these costs much higher. Where did the notion come from to raise FFL fees? There are two people who deserve the credit: Josh Sugarmann of the Violence Policy Center and Bill Bridgewater of the National Alliance of Stocking Gun Dealers.

Josh Sugarmann began making his place in this debate as an employee of the National Coalition to Ban Handguns. In 1988, he had an insight: if it looked like a machine gun, most people would think it was a machine gun. And the debate over banning certain semi-automatic rifles and shotguns (so-called “assault weapons”) began.

In 1992, Mr. Sugarmann issued documentation suggesting a new form of gun control. If there are no places to legally purchase firearms, then firearms are effectively banned. Thus the BATF should make FFLs much more costly and harder to obtain. His monograph, More Gun Dealers Than Gas Stations, became the source for the debate on FFLs in the next Congress. (Mr. Sugarmann is listed as the holder of two FFLs himself–both giving Washington, DC addresses, one being that of his Violence Policy Center.)

Mr. Sugarmann is a smart man. But a review of his study suggests that he picked up some of his ideas from ‘friends’ of the gun movement. On page 21, Mr. Sugarmann begins a discussion of “the kitchen table dealers.” He talks about the difference between the wholesale and the retail price of firearms. He refers to people using an FFL “for personal use or resale, [and] kitchen-table dealers can also broker sales between wholesalers and retail purchasers for a ‘handling fee.'” Mr. Sugarmann cites other sources for this discussion. But the term “kitchen-table dealer” is a stock complaint from Mr. Bill Bridgewater and his National Alliance of Stocking Gun Dealers.

The April, 1994 issue of Mr. Bridgewater’s magazine, The Alliance Voice, is a relevant example. The cover shows Mr. Bridgewater shaking hands with the hero of Waco, then-treasury Secretary Lloyd Bensen. Inside, readers were reminded, “how in the world can a gun retailer make money when there are tens of thousands of people who are ordering guns wholesale and bypassing the legitimate gun shop?” The National Rifle Association (NRA) was attacked: “Their sole concern with the industry is that there be enough extra FFLs issued to keep prices down to factory cost for their members.”

The featured theme of this issue? An agreement signed by Mr. Bridgewater and several anti-gun ‘police’ organizations calling for an increase in FFL fees and requiring that any FFL holder must comply with “state and local laws and ordinances.” This agreement would soon be enforced by the BATF with a vengeance.

Those who see the interests of stocking gun dealers as being somehow distinct from other portions of the shooting community forget one thing: our enemies see us as different parts of the same problem. If it goes bang, they want to ban it: be it hunting rifle or AR-15. They want to shut down every gun store everywhere. And they are succeeding.
BATF Harasses Home Businessmen

Anyone who begins a business tries to hold down unnecessary costs. Apple Computer began in a garage–not an expensive office. In today’s decentralized workplace, computers, faxes and other technology have even created the “virtual office” and “virtual corporation”–workplaces that exist wherever the coworkers may happen to be. Many Americans earn extra money (or obtain more time with their children) by running all sorts of home-based businesses.

The “kitchen-table” firearms dealer is no different than the “kitchen-table” computer shareware manufacturer or the “kitchen-table” Mary Kay saleswoman. The business may be the beginning of something much bigger. Or it can be as much a hobby as a business, allowing a person to make a few extra dollars doing something he or she enjoys anyway.

Generally, these efforts are conducted in a fairly law-abiding manner. But if a person wishes to do business from his home, he generally does so even though his home is not zoned for commercial purposes.

The mechanic may fix cars for friends on Saturdays. So long as automobiles do not overflow onto his yard and elsewhere, the neighbors do not mind. In fact, they may not even know. A newly divorced woman may run a telephone answering service from her home. Again, this may not be strictly legal according to zoning laws or some ordinance, but bothers no one and provides her with an income.

Under President Clinton, the BATF has taken it upon itself to become the national enforcer of local zoning laws, state sales tax laws and state and local licensing laws. This is flatly unconstitutional. The federal government has no Constitutional authority to enforce local ordinances. (new laNGUAGE HERE)In fact Article 1, Section 8 prohibits the federal government from usurping powers that belong to the states.

One thing the BATF is doing is to persecute the FFL holder who has not obtained a retail store and other licenses. Consider a letter I received from the City of Melvindale, Michigan:

The Bureau of Alcohol, Tobacco and Firearms is attempting to limit the number of Federally-licensed firearms dealers. One way in which they are attempting to limit the number of licensees is in that all future renewals will be sent to the local municipality for Zoning Approval.

Currently all local Melvindale licensees are NOT zoned for retail sales. In order for the City of Melvindale to approve the Zoning on your future licenses (sic) renewal you must apply for and receive Special Approval from the City of Melvindale Planning Commission for a home occupation involving retail sales of ammunition and firearms.

Applications for Special Approval are available from the City of Melvindale Building Department. The fee is $200.00 and a Public Hearing will be required. This does not guarantee that Special Approval will be granted.

Looks like there will be no more FFLs in Melvindale for a while. The minute politicians or bureaucrats must affirmatively approve something is the minute few things will be approved. They will offer reasons which sound good–liability concerns, public complaints, whatever. But the bottom line will be no FFLs.

A chat with Robert Lesmeister of American Firearms Industry reveals Melvindale is not alone. The City Council of Honolulu, Hawaii, has just passed an ordinance banning the sale of firearms and ammunition from residentially-zoned districts. FFL holders in Detroit’s residential zones have been threatened with a $500 fine for failing to get a variance from the Board of Zoning Appeals. FFL holders in Maryland are being similarly harassed.

Curiously, though everyone seems to know about this BATF change of policy, the BATF has not bothered to follow the procedures required to make this policy legal. In a discussion one of my staff had at a meeting between firearms dealers and the BATF, we were told that no Notice of Proposed Rulemaking had been printed in the Federal Register, no public comment took place nor was a Final Rule published. Requests for any documentation at all have been met with either silence or hostility.
Commercial Dealers Are Not Safe

Bill Bridgewater and his allies may think that fewer FFL’s mean bigger profits for those that remain. What they do not realize is that Bill Clinton has no love for retail gun shops either. Honolulu firearms stores in commercially-zoned districts are being required to provide BATF with a letter from their landlord specifically giving the dealer permission to conduct a firearms business.

When Jonathan Low told BATF agent Gerry Kim getting such a letter would be no problem, the agent disagreed. Two days after the landlord had agreed to write the needed letter, he changed his mind. The reason? A federal agent had visited the landlord and warned him of all kinds of “liability concerns” the landlord might face for allowing the store to operate. When Low found a new location for his shop, agent Kim spoke to the new landlord and Low lost another letter of permission.

The BATF will eagerly put a store out of business for record-keeping errors. Yet when the BATF itself could not account for 152 firearms during a 1991 inventory, the missing firearms were simply removed from the computer. Had an FFL holder tried that, he would be in prison.
FFL Not the Only License Needed These Days

The BATF is not only willing to help localities enforce zoning laws. It is eager to help states and localities enforce all kinds of licensing and tax laws. While FFL holders have been required to comply with state and local laws, determining what those laws actually are can be a task worthy of Sherlock Holmes.

Given that states and cities are eager to find new sources of revenue for their reckless spending, the honest businessman had best expect to keep up with ever-changing rules in this area. State governments have found a friend in the BATF when it comes to learning who sould be licensed and who should be paying sales taxes.

North Carolina asked for, and received a complete list of FFL holders from BATF. A North Carolina firearms dealer is required to have a state license (cost: $50 annually) as well as an FFL. Roughly 3,900 did not. The licenses are issued by the state’s Revenue Department, which also enforces income tax and sales tax laws. Some of these FFL holders could be looking at extensive audits in a search for “unreported” business income–even if they sold no firearms to anyone else.

North Carolina’s policy seems motiviated by anti-gun sentiment as well as greed. Jean Kossoff of the department was reported as saying, “we’re going after them. We’ve made them a priority.”
What You Can Do

For some people, getting an FFL may well be more trouble than it is worth. If you live in an urban Northeastern area or an anti-gun community, it may be a costly struggle. If you live in most other places, getting an FFL will cost a bit more, but otherwise is easily attainable.

Some people argue that groups like Gun Owners of America should support whole new categories of FFLs. While this argument has some merit from the perspective of the prospective pistolsmith, it could further divide our splintered community. We are all in this together. It is time we started to act that way.

Write your Congressman and Senators. Demand that the BATF get out of the zoning business. And encourage your local firearms stores to fight with you, not against you.

Readers who are interested in the BATF’s abuse of power may order a video, Breaking the Law in the Name of the Law at the special price of $15.95 plus $3 shipping and handling (regularly $19.95 & shipping). Call 1-800-417-1486 and tell them you are responding to the Guns & Ammo special. Or you may write to Gun Owners of America, Dept. GA, 8001 Forbes Place, Suite 102, Springfield, VA 22151.