Firearms Licensing and Regulatory Compliance

  • Overview
  • Attorneys
  • News
  • Publications

The firearms industry is one of the most heavily regulated in the United States and because of the current political environment, the number and nature of these requirements continue to increase and expand. As a licensee you are subject to a maze of federal, state and local laws, regulations, rules, forms, compliance requirements and rulings with respect to a wide variety of circumstances. This increases the need for vigilance and care for you to operate within the law and Kutak Rock’s Firearms Industry Practice Group can help you navigate this regulated landscape through all aspects of licensing and legal compliance.

The federal laws you deal with are well established:

  • The National Firearms Act (as amended by Title II of the Gun Control Act);
  • The Gun Control Act of 1968;
  • The Arms Export Control Act; and
  • Title 18 concerning nonmailable firearms and the rules and regulations related to these, including the National Instant Criminal Background Check System regulations.

In addition, every state and many local governments have a wide variety of statutes, regulations and ordinances which must be complied with.

National Firearm Act Compliance

  • Originally enacted in 1934, the current National Firearms Act imposes a tax on making and transferring firearms defined by the Act, as well as a special (occupational) tax on persons and entities engaged in the business of importing, manufacturing, and dealing in National Firearms Act firearms. The law also requires the registration of all National Firearms Act firearms with the Secretary of the Treasury.
  • In 1967, the United States Supreme Court held in the Haynes v. United States case that a person prosecuted for possessing an unregistered National Firearms Act firearm had a valid defense to the prosecution. The Haynes decision made the 1934 Act virtually unenforceable.
  • Title II of the Gun Control Act of 1968 amended the National Firearms Act to cure the constitutional flaw pointed out in Haynes. First, the requirement for possessors of unregistered firearms to register was removed. Second, a provision was added to the law prohibiting the use of any information from a National Firearms Act application or registration as evidence against the person in a criminal proceeding with respect to a violation of law occurring prior to or concurrently with the filing of the application or registration.
  • In 1971 the Supreme Court reexamined the National Firearms Act in the United States v. Freed case and amended the National Firearms Act definitions of “firearm” by adding “destructive devices” and expanding the definition of “machine gun.”
  • In addition, in 1986 Congress passed the Firearms Owners’ Protection Act. This Act amended the National Firearms Act definition of “silencer” by adding combinations of parts for silencers and any part intended for use in the assembly or fabrication of a silencer. The Act also amended the Gun Control Act to prohibit the transfer or possession of machine guns with some exceptions.

Comprised of a mere 22 sections of the current Internal Revenue Code, the National Firearms Act is a complex mosaic of taxes imposed on the manufacture, import and transfer of National Firearms Act firearms as well as registration, identification, records and reporting requirements. Violation of the National Firearms Act can result in fines, 10 years of imprisonment on each count, and forfeiture of the device.

Since the National Firearms Act relies on the definition of such terms as “firearm,” “silencer,” “machine gun” and “destructive device” among many others, the familiarity with these definitions combined with a practical knowledge of the variety of firearms and ammunition provides Kutak Rock with the experience and knowledge to assist you in being fully compliant with the National Firearms Act.

Gun Control Act Compliance

The Gun Control Act was signed by President Lyndon Johnson on October 22, 1968 as an omnibus measure reflecting a variety of congressional purposes, including amendments to the National Firearms Act of 1934, extending its coverage and relatively prohibitive tax to “destructive devices” (bombs, hand grenades, land mines and similar mechanisms) and altering the registration provisions of the National Firearms Act to rescue its registration requirement from the Haynes decision.

Most relevant to the firearms industry today, Section 922 of the Gun Control Act provides that it shall be unlawful “for any person, except as a licensed importer, licensed manufacturer, or licensed dealer to engage in the business of importing, manufacturing or dealing in firearms, or in the course of such business to ship, transport or receive any firearm in interstate or foreign commerce” and for any person “except a licensed importer or licensed manufacturer, to engage in the business of importing or manufacturing ammunition, or in the course of such business to ship, transport, or receive any ammunition in interstate or foreign commerce.”

In 1993 the Brady Handgun Violence Prevention Act amended the Gun Control Act and paved the way for the National Instant Criminal Background Check System, or NICS. Launched by the FBI on November 30, 1998, NICS is used by Federal Firearms Licensees (FFLs) to instantly determine whether a prospective buyer is eligible to buy firearms or explosives.

Every company manufacturing, importing, selling, purchasing, repairing, altering, auctioning, pawning or collecting firearms is affected by the Gun Control Act, so whether you are a Type 01 applicant seeking a Federal Firearms License as a dealer or manufacturer or an existing Federal Firearms Licensee with compliance or enforcement issues, Kutak Rock has the practical knowledge of firearms, ammunition and other devices to provide you with real-world advice on complying with the Gun Control Act.

State Law Compliance

All 50 states, the District of Columbia, American Samoa, Guam, North Marianna Islands, Puerto Rico and the Virgin Islands, and many individual local governments, have some form of firearms and ammunition laws and regulations. These laws are in addition to the GunControl Act and affect over-the-counter sales of rifles and shotguns to out-of-state residents.

With 500 lawyers in 18 locations, Kutak Rock has lawyers licensed in virtually every state. In addition to assisting the firearms industry with federal law compliance, Kutak Rock has the experience to help you navigate through the plethora of state and local laws as well.