Something interesting....

[RD62]

Actually, you know when I think about it it's not uncommon for companies to charge more for the pieces than for the whole. It's kind of odd that the pieces would total more than the whole +11% though.


-RD62

[Charles Daly]

....Now what has my interest is that the Treasury Dept. basically says that if a consumer (in the span of 1 year) buys enough components to build a weapon, then that counts against one of your 50 that you are allowed to build without collecting FET. If you go over 50 weapons, then you have to pay the 11% on ALL 50!
Now IMHO, it is NEARLY impossible to keep track of what all components a customer buys and seeing if it adds up to a complete weapon....

C4

As a manufacturer that mails a check for FET to Treasury every two weeks of my life, this has really piqued my interest also.

I think it would be impossible to track such activity. When TTB (Tax and Trade Bureau) comes in to audit your FET activities, what records could possibly tell them what your customers are building?

For several years we sold Mauser barreled actions and Butler Creek synthetic stocks for those barreled actions, neither of which are taxable articles. Our distributors in turn resold those same items to their dealers. Surely the dealer sold them separately again, and FET never attached to these items, all the way into the consumers home.

Now you're saying that if you sold one of those barreled actions and one of those stocks, that sale (1 pc) would count towards your 50 per year allotment? What if the consumer buys the barreled action from you and the stock from the dealer down the street (or the internet)? Would that barreled action sale count towards your 50?

How in the world is it possible to know the actions of your consumers? As long as you sold the product legally, and did not assemble the non-taxable componenets into a taxable article, certainly there is no FET liability and I would argue, no manufacturing for ATF pruposes.

RRA certainly would never have to worry about the 50 piece per year threshold. The fact that they charge more for the components than the same componenets assembled, as many manufacturers do, leads me to believe it has more to do with discouraging component sales than any FET issue.

[Trim2L]

RRA gets a lot of parts from CMT (Stag). I see little difference personally. Stag also does not build in the 11% FET like RRA does.



C4

CMT subcontracts parts for a lot of companies, such as RRA, BM, Colt, etc. That hardly means they all get the same parts as the Stag house brand.

My experience has been that Stag is most likely selling the rejects from other contract runs.

[C4IGrant]

As a manufacturer that mails a check for FET to Treasury every two weeks of my life, this has really piqued my interest also.

I think it would be impossible to track such activity. When TTB (Tax and Trade Bureau) comes in to audit your FET activities, what records could possibly tell them what your customers are building?

For several years we sold Mauser barreled actions and Butler Creek synthetic stocks for those barreled actions, neither of which are taxable articles. Our distributors in turn resold those same items to their dealers. Surely the dealer sold them separately again, and FET never attached to these items, all the way into the consumers home.

Now you're saying that if you sold one of those barreled actions and one of those stocks, that sale (1 pc) would count towards your 50 per year allotment? What if the consumer buys the barreled action from you and the stock from the dealer down the street (or the internet)? Would that barreled action sale count towards your 50?

How in the world is it possible to know the actions of your consumers? As long as you sold the product legally, and did not assemble the non-taxable componenets into a taxable article, certainly there is no FET liability and I would argue, no manufacturing for ATF pruposes.

RRA certainly would never have to worry about the 50 piece per year threshold. The fact that they charge more for the components than the same componenets assembled, as many manufacturers do, leads me to believe it has more to do with discouraging component sales than any FET issue.

All very good questions. I and many of my fellow 07's have talked to the Treasury folks about this issue many times. While we have gotten different answers from time to time (which is common), they seem pretty consistant on the fact that if you sell enough components to a customer to build a weapon, then you have to pay the FET on that weapon.

Now if the consumer buys everything from you less the trigger, then you are safe.

My business is nothing like your business and I find it nearly impossible to remember what each customer has bought throughout the year. In my opinion though, I think the Treasury dept. is more interested in a large company (like say yours) pushing out a ton of weapons and not paying FET VS a small mom and pop shop like ours.

I do belive that RRA is just trying to make their customers buy complete weapons. One of is for certain, they beat you up on prices when you buy things ala cart!


C4

[C4IGrant]

CMT subcontracts parts for a lot of companies, such as RRA, BM, Colt, etc. That hardly means they all get the same parts as the Stag house brand.

My experience has been that Stag is most likely selling the rejects from other contract runs.

There is not doubt that CMT puts out different parts to different specs. Some manufacturers have much tighter QC and standards and CMT sends them what they will buy.

I personally believe that Stag (generally) gets the best parts. This is the same opinion that S&W shares as well and is why they pulled everything from them.


C4

[MX5]

I wouldn't make too much out of this or try to read too much into it. It's very common for manufacturers of all manner of goods to sell the complete assembled item for less than the total of the parts prices, themselves. This is very common in industry. If the parts add-up to less than the assembled item, then that would be an exception rather than the rule. Try adding-up the parts prices of a motor vehicle.

[C4IGrant]

I wouldn't make too much out of this or try to read too much into it. It's very common for manufacturers of all manner of goods to sell the complete assembled item for less than the total of the parts prices, themselves. This is very common in industry. If the parts add-up to less than the assembled item, then that would be an exception rather than the rule. Try adding-up the parts prices of a motor vehicle.

Really? I would have to disgree. I can show you many companies that do not do this. Short list off the top of my head that do not follow RRA's lead; LMT, Stag, ADS, Noveske, CMMG.


C4

[recon]

Car parts? Don't get me started there! Are those companys you list more expensive that RRA?

[C4IGrant]

Car parts? Don't get me started there!

Do they have a FET on them as well???



C4

[recon]

Do they have a FET on them as well???
C4

Good one!