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 Firearms Excise Tax FAQsRevised: 09/26/2005 Small Manufacturers Exemptions | Background | Ammunition Reloaders | Claims | Employer Identification Number | Forms and Records | Gunsmiths | Importers | Manufacturers and Producers | Taxes and Statistics | Sales | Taxes DISCLAIMER - The Chief, Regulations and Rulings Division of the Alcohol and Tobacco Tax and Trade Bureau (TTB) attempts to keep the answers to these questions current and accurate. However, TTB does not guarantee that this information is 100 percent accurate. In addition, the information may be modified, superseded, or made obsolete by recent changes in laws and regulations. If you want to know about recent changes in the law and regulations, you may visit the following websites: http://thomas.loc.gov/and http://www.gpoaccess.gov/fr/index.html. If you are concerned with the accuracy of this information, please contact TTB. Also, you may contact your legal advisor. Small Manufacturers ExemptionsQ. What was the effect of the amendment to U.S.C. 4182 regarding the 50 gun exemption from Federal Firearms and Ammunition Excise Taxes? A. As of October 1, 2005, any pistol, revolver, or firearm that was manufactured, produced or imported by a person who manufactures, produces or imports less than an aggregate of 50 such articles during the calendar year is now exempt from the tax. A. A manufacturer, importer or producer qualifies for this exemption based on the number of firearms manufactured, produced and imported on a calendar year basis (January 1-December 31). For example, if Company “A” manufactures 20 firearms in Year 1 then it is exempt from FAET on all firearms it manufactures and sells in Year 1. However, if Company “A” manufactures 55 firearms in Year 2 then it is subject to FAET on all firearms sold in Year 2. A. Since all persons that are a part of a controlled group of corporations will be treated as one taxpayer for purposes of this exemption, members of the group are only exempt from the tax if, collectively, they manufacture, produce or import less than 50 articles during the calendar year. A. No, it does not. A. No, you may not. Background1. What is Firearms and Ammunition Excise Tax (FAET)? Firearms and Ammunition Excise Tax (FAET) is a tax imposed by Chapter 32 of the Internal Revenue Code (26 U.S.C. 4181) on the sale of firearms and ammunition by manufacturers, producers, and importers. Chapter 32 also imposes taxes on other commodities such as:
2. What agency collects FAET? Since its inception in 1919, different Federal agencies have been responsible for overseeing the collection of FAET. From 1919 to 1990, the Internal Revenue Service (IRS) was responsible for collecting FAET. On January 1, 1991 , this function was transferred from the IRS to the Bureau of Alcohol, Tobacco and Firearms (ATF). On November 25, 2002 , President Bush signed into law the Homeland Security Act of 2002. The Homeland Security Act divided the functions of ATF into two new agencies: the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in the Department of Justice and the Alcohol and Tobacco Tax and Trade Bureau (TTB) in the Department of the Treasury. On January 24, 2003 , TTB became responsible for administering the collection of FAET and handling the regulatory and taxation aspects of the alcohol and tobacco industries. The TTB's National Revenue Center performs all duties supporting the collection of FAET. ” [Refer to Industry Circular 2003-2] “ and the link should link to that particular page. 3. What Federal laws and regulations pertain to FAET? The following Federal laws pertain to FAET:
The following Federal regulations pertain to FAET:
4. How does FAET relate to other provisions of law and regulations? The laws and regulations regarding FAET are in addition to, and not a substitute for, any other provisions of laws and regulations. You must comply with other Federal laws and regulations governing the manufacture and importation of firearms and ammunition (such as the Gun Control Act, the National Firearms Act, and the Arms Export Control Act). You must also comply with all state and local laws and regulations. 5. Where can I find information on other Federal firearms laws and regulations?
These laws and their implementing regulations are administered by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in the Department of Justice.
Ammunition Reloaders1. If I reload ammunition, am I liable for FAET?
[Refer to 27 CFR 53.11 (definition of shells and cartridges)] 2. If I reload ammunition, when is my customer liable for FAET? 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 ]
Claims1. When may I file a claim? You may file a claim when you overpay your FAET. [Refer to 27 CFR 53.171 ] 2. What is a credit? A credit is an adjustment to your tax payment that decreases the amount of FAET you owe. This occurs when you overpay your FAET. 3. What is a refund? A refund is money returned to you when you overpay your FAET. 4. How do I file a claim for credit? You may file for a credit by explaining your overpayment(s) in Schedule C on your tax return (TTB F 5300.26). 5. How do I file a claim for refund? You may file for a refund by completing TTB F 2635 (5620.8). 6. Does a statute of limitations apply if I file a claim? Yes. You must file for your credit or refund within 3 years from the date your filed your return. However, if you did not file a tax return, you must file for your credit or refund within 2 years from the date you paid your FAET.
Employer Identification Number1. What is an Employer Identification Number (EIN)? An EIN is a nine-digit number that the Internal Revenue Service (IRS) assigns to businesses and entities for tax filing. Some examples include:
2. When do I need to obtain an EIN? You must obtain an EIN if you manufacture, produce, or import articles on a regular basis. However, you do not need to obtain an EIN if you manufacture, produce, or import articles on a one-time or occasional basis. If you manufacture, produce, or import articles on a one-time or occasional basis, TTB will establish your account through your Social Security Number instead. 3. How do I obtain an EIN? You can obtain an EIN by filing a Form SS-4 with the IRS. You can obtain an SS-4 by contacting your local IRS office. 4. When do I use my EIN or Social Security Number? Include your EIN on all deposits, returns, and correspondence that you file with TTB. In addition, include your EIN on all check and money order payments you make to TTB. If you do not have an EIN because you manufacture, produce, or import articles on a one-time or occasional basis, use your Social Security Number instead 5. What if my EIN changes? If your EIN changes, contact the FAET Unit at the NRC and provide them with your new EIN. Forms and Records1. What forms pertain to FAET? The following forms pertain to FAET:
The following informational forms pertain to FAET:
2. What is the Annual Firearms Manufacturing and Exportation Report? You must submit an Annual Firearms Manufacturing and Exportation Report (ATF F 5300.11) to notify ATF of all weapons (other than semi-automatic weapons) that you manufacture. You must submit an ATF Form 5300.11A to report all semi-automatic weapons that you manufacture. Your Annual Manufacturing and Exportation Report is due by April 1 of each year. Your report will cover the previous year's manufacturing activities. You must file a report every year (even if you do not manufacture firearms during the year). 4. Where do I send my Annual Manufacturing and Exportation Report? Send your Annual Manufacturing and Exportation Report to: Note: Do not send your Annual Manufacturing and Exportation Report to the NRC! 5. Am I required keeping records for FAET purposes? Yes. Although the regulations do not specify any particular format, you must maintain accurate records that will enable TTB to conduct a financial audit. You must maintain a system of accounting that will enable a TTB officer to determine if you incur tax liability and, if so, the amount of tax liability you incur. Some examples of financial records include:
[Refer to 27 CFR 53.24 ] In addition, you must maintain a copy of all documents that you submit to TTB such as:
[Refer to 27 CFR 53.24(b) and 27 CFR 53.24(c) ] 6. How long must I maintain my FAET records? You must maintain FAET records with respect to your tax for whichever is later:
You must maintain records of any claims for at least 3 years after you file the claim. [Refer to 27 CFR 53.24(d)(2) ]
Gunsmiths1. Is a gunsmith liable for FAET? If you perform gunsmithing on a firearm, your liability for FAET will depend on the type of work you perform on the firearm.
2. If I perform gunsmithing, when is my customer considered the manufacturer?
3. If my customer is considered the manufacturer, when is he or she liable for FAET?
Importer1. Am I an importer? You are an importer if you:
[Refer to 27 CFR 53.11 (definition of importer)] 2. Am I liable for FAET on a one-time or occasional importation?
3. Am I liable for FAET if I import an article for someone else? 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 ] 4. If I import an article for my personal use, how do I determine my FAET? 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; 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
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 Producers1. Am I a manufacturer? You are a manufacturer if you manufacture or produce a taxable article from scrap, salvage, junk material, new material, or raw material by:
[Refer to 27 CFR 53.11 (definition of manufacturer)] 2. If I manufacture an article and sell it in knockdown condition, am I liable for FAET? 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)] 3. If I purchase an article in knockdown condition and assemble it, am I liable for FAET? If you purchase an article in knockdown condition and assemble it, your liability for FAET will depend on the following factors:
[Refer to 27 CFR 53.11 (definition of manufacturer)] 4. If I manufacture an article only for my personal use, am I still liable for FAET? 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) 5. If I manufacture an article and use it in the course of my business, am I liable for FAET? 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:
[Refer to 26 U.S.C. 4218 , 27 CFR 53.111 , and 27 CFR 53.112 ] 6. How do I determine my FAET if I manufacture and use an article in the course of my business? 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) ] 7. What if more than one person is involved in the manufacturing process? 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.
Tax Rates and Statistics1. What are the tax rates?
[Refer to 26 U.S.C. 4181 and 27 CFR 53.61(a) ] When you sell an article, you will calculate your FAET by multiplying your sale price by the applicable tax rate. If you owe interest on Federal Excise Tax, use the rates published by the Internal Revenue Service in http://www.irs.gov/pub/irs-drop/rr-05-15.pdf or just file the return and we will assist you in computing any adjustments to the tax.
2. How much FAET does TTB collect?
3. Where do the tax dollars go? TTB gives all money it collects from FAET to the Fish and Wildlife Service under the Department of the Interior.
SalesDetermining your sale price 1. What is my sale price? Your sale price is the total amount of consideration that you receive for your article. Consideration may be in the form of money, services, or other things. 2. How do I determine my sale price? You must determine your sale price by including certain charges that you incur in producing an article. You may also exclude certain charges from your sale price. 3. What charges must I include in my sales price? When calculating your sales price, you must include: • Charges that you must pay as a condition of the sale [Refer to 27 CFR 53.91(a)]; • Charges for tools and dies used in production [Refer to 27 CFR 53.91(b)]; • Charges for a warranty ( Note : This depends on whether the warranty is optional or required. If you require the purchaser to pay for a warranty when purchasing the article, you must include any charges for warranty in your sales price. However, if you give the purchaser the option of purchasing a warranty with the article, you do not need to include any charges for the warranty in your sales price) [Refer to 27 CFR 53.91(c)]; and • Charges for coverings, containers, and packing [Refer to 26 U.S.C. 4216(a) and 27 CFR 53.91(d)]. 4. What charges may I exclude from my sale price? When calculating your sale price, you may exclude: • The excise tax itself (you do not need to include the cost of FAET when calculating your sale price )[Refer to 26 U.S.C. 4216(a) and 27 CFR 53.92(a)]; • Charges you incur when transporting a product to a customer after a sale (this includes charges for delivery, transportation, and insurance) [Refer to 26 U.S.C. 4216(a) and 27 CFR 53.92(b)]; • Certain charges related to local advertising [Refer to 26 U.S.C. 4216(e) and 27 CFR 53.100]; • Charges for extra and identical parts and accessories [Refer to 27 CFR 53.61(b)(1) ] ; and • The cost of non-taxable articles you sell in combination with taxable articles [Refer to 27 CFR 53.92(b)(2)]. 5. What insurance charges may I exclude from my sale price? You may only exclude insurance charges that you incur when transporting a product to a customer after a sale . [Refer to 26 U.S.C. 4216(a) , 27 CFR 53.92(b) and Industry Circular 93-7]. 6. What amount of local advertising charges may I exclude from my sale price? You may only exclude a maximum of 5 percent of your local advertising charges per calendar year. [Refer to 26 U.S.C. 4216(e)(2) and 27 CFR 53.101 ] . Constructive sale price 1. What is a constructive sale price (CSP)? A constructive sale price (CSP) is a substitute sale price that the Internal Revenue Code either permits or requires you to use. When you use a CSP, you are constructing a new taxable sale price for your article. 2. When will I use a CSP? You will use a CSP when you sell an article:
[Refer to 26 U.S.C. 4216(b) and 27 CFR 53.94 ] 3. What does “otherwise than at arm's length” mean? You qualify as selling an article “otherwise than at arm's length” when:
[Refer to 27 CFR 53.95(d) ] 4. What is the purpose of a CSP? Since your FAET liability is based on the wholesale price of your article, the Internal Revenue Code established the concept of a CSP to ensure tax fairness. For example, when you sell an article at retail or on consignment, your retail sale price will usually be higher than your wholesale price. The Internal Revenue Code permits you to use a CSP so you can establish a sale price for your article that is comparable to your wholesale price. However, when you sell an article not at arm's length and less than fair market value, your sale price will usually be lower than if you had sold the article at arm's length and fair market value. In this instance, the Internal Revenue Code requires you to base your FAET on an increased sale price. Note: You should contact the National Revenue Center for information on how to determine your CSP. Price readjustments and exchanges 1. How do I calculate FAET if I readjust my sale price at a later date? You must calculate your FAET on the original sale price of your article. You may only calculate FAET on a readjusted sale price if you make the readjustments before your tax period ends. Some examples of readjustments you may make in your sale price include:
2. May I anticipate price readjustments? No. You may not anticipate readjustments in your sale price when calculating FAET. [Refer to 27 CFR 53.93(c) ] 3. How do I calculate my FAET if I exchange an article? If your customer exchanges or trades in an old article for a new one, you will base your FAET on:
[Refer to 27 CFR 53.93(a) ] Credit sales and leases 1. When does FAET attach on a credit sale? When you sell an article on credit, FAET attaches when you actually make the sale ( not when you actually collect the purchase price). Example: I sold a firearm on credit on February 2. I received payment for the firearm on February 10. The customer did not actually take possession of the firearm until February 15. Question: When do I become liable for FAET? Answer: Since you actually transferred title of the firearm to the customer on February 2, you become liable for FAET on February 2. [Refer to 27 CFR 53.2(a) ] 2. If I sell an article on credit, but never receive payment, am I still liable for FAET? Yes. If you sell an article on credit, but do not actually receive payment from the customer, you are still liable for FAET. Example: I sold a firearm on credit for $200.00. The customer received the firearm, however, I never received payment for the firearm. Question: Do I still owe FAET even though I never received payment? Answer: Yes- you would still owe FAET for the full sale price of $200.00. [Refer to 27 CFR 53.2(c) and 27 CFR 53.98(c) ] 3. What is a lease? A lease is an exclusive and continuous right to possess or use an article for a period of time. A lease may be a verbal or written contract or agreement. This also includes any:
[Refer to 26 U.S.C. 4216(c) , 26 U.S.C. 4217(a) , and 27 CFR 53.103 ] 4. Am I liable for FAET if I lease an article? Yes. A lease is considered a sale. [Refer to 26 U.S.C. 4217(a) and 27 CFR 53.103 ] 5. When does FAET attach on a lease? FAET attaches on each lease payment made by the customer (lessee). [Refer to 26 U.S.C. 4216(c) and 27 CFR 53.2(e) ] FAET liability exists for the entire time you lease the article to the customer. You are liable for FAET each time you lease the article. You are also liable for FAET if you sell a previously leased article (regardless as to the amount of tax already paid on previous leases). Exception: If you lease an article and you are engaged in the business of selling articles that are the same type and model, you are only liable for FAET until the total tax is paid. Once you have paid the total FAET on a leased article, you are not liable for FAET on any subsequent lease or sale of the same article. [Refer to 26 U.S.C. 4217 and 27 CFR 53.104 ] 6. How do I calculate FAET on a lease? When you lease an article, you must apply a percentage of FAET to each lease payment made by the customer. [Refer to 26 U.S.C. 4216(c) , 26 U.S.C. 4217 , 27 CFR 53.98(a) , and 27 CFR 53.104 ] Consignment and Installment Sale 1. What is a consignment sale? An example of a consignment sale is when a manufacturer, producer, or importer physically transfers an article to a licensed dealer for sale to a customer. The licensed dealer will then sell the article to a customer on behalf of the manufacturer, producer, or importer. The manufacturer, producer, or importer retains ownership of the article until the licensed dealer actually sells it to a customer. [Refer to 27 CFR 53.2(d) ] 2. When does FAET attach on a consignment sale? Once the consignee sells the consigned article to a customer, tax will attach and the consignor will be liable for FAET. [Refer to 27 CFR 53.2(d) ] 3. What is an installment sale? An example of an installment sale is when you sell an article to a customer but still retain ownership of the article until a later date. The customer pays you for the article in installment payments. [Refer to 27 CFR 53.98(b) ] 4. When does FAET attach on an installment sale? FAET attaches on each installment payment made by the customer. [Refer to 27 CFR 53.2(e) and 27 CFR 53.98(b) ] 5. How do I calculate FAET on an installment sale? You must apply a percentage of FAET to each installment payment made by the customer. [Refer to 26 U.S.C. 4216(c) and 27 CFR 53.98(b) ] Tax-exempt sales 1. What is a tax-exempt sale? A tax-exempt sale is a sale of an article where the tax never attaches. 2. When may I sell an article tax-exempt? You may only sell an article tax-exempt if: • The article is a firearm classified under the National Firearms Act and the transfer tax required by 26 U.S.C. 5811 has been paid [Refer to 26 U.S.C. 4182(a) and 27 CFR 53.62(a) ] ; or • You sell the article to the Department of Defense (such as the Army, Navy, or Air Force) or to the United States Coast Guard with appropriated funds (the funds must be specifically appropriated for a military department). [Refer to 26 U.S.C. 4182(b) and 27 CFR 53.62(b) ] 3. Do I need approval from TTB before selling an article tax-exempt? No. However, your sale must qualify as a tax-exempt sale. Tax-free sales 1. What is a tax-free sale? A tax-free sale is a sale of an article where the tax originally attaches. However, because of the nature of the sale, you are eligible to receive a refund of the tax. 2. When may I sell an article tax-free? You may only sell an article tax-free: • For use in further manufacture [Refer to 26 U.S.C. 4221(a)(1) , 27 CFR 53.131 , and 27 CFR 53.132 ] ; • To a purchaser who will resell it for use in further manufacture [Refer to 26 U.S.C. 4221(a)(1) , 27 CFR 53.131 , and 27 CFR 53.132 ] ; • For export [Refer to 26 U.S.C. 4221(a)(2) , 27 CFR 53.131 , and 27 CFR 53.133 ] ; • To a purchaser who will resell it for export [Refer to 26 U.S.C. 4221(a)(2) , 27 CFR 53.131 , and 27 CFR 53.133 ] ; • For use as supplies on vessels or aircraft [Refer to 26 U.S.C. 4221(a)(3) , 27 CFR 53.131 , and 27 CFR 53.134 ] ; • To state and local governments for their exclusive use ( Note: this does not apply to Federal agencies) [Refer to 26 U.S.C. 4221(a)(4) , 27 CFR 53.131 , and 27 CFR 53.135 ] ; and • To nonprofit educational organizations [Refer to 26 U.S.C. 4221(a)(5) , 27 CFR 53.131 , and 27 CFR 53.136 ] 3. Do I need approval from TTB prior to selling an article tax-free? Yes. If you want to sell an article tax-free, you must have a tax-free registration number. To obtain a tax-free registration number, you must file an Application for Registration for Tax-Free Transactions (TTB F 5300.28). [Refer to 26 U.S.C. 4221 , 27 CFR 53.140 , and TTB F 5300.28 ]
TaxesLiability You are liable for FAET if you:
[Refer to 26 U.S.C. 4181 and 27 CFR 53.61 ] 2. To what jurisdictions does FAET apply?
3. When do I become liable for FAET? You generally become liable for FAET when you transfer title of an article to a purchaser. The moment that you become liable for FAET on an article is often referred to as “attachment of tax.” 4. Where does FAET apply? FAET applies to: Portable weapons that use an explosive to expel a projectile such as:
[Refer to Revenue Ruling 57-606 and Revenue Ruling 74-137 ] Ammunition such as:
[Refer to 27 CFR 53.61(a)(4) ] Firearms and ammunition that are unassembled but contain all component parts (such as firearms kits) [Refer to Revenue Ruling 56-208 and Revenue Ruling 62-169 ] 5. Where does FAET not apply? FAET does not apply to: Non-portable weapons (such as cannons) Any device that does not use an explosive to expel a projectile such as:
[Refer to Revenue Ruling 67-453 ] • Starter pistols that use blank ammunition [Refer to Revenue Ruling 60-233 ] Individual parts of firearms such as :
[Refer to 27 CFR 53.61(b)(5)(ii) ] Any extra or spare parts that come with a firearm such as:
[Refer to 27 CFR 53.61(b)(5)(iii) and Revenue Ruling 54-98 ] Accessories such as:
[Refer to 27 CFR 53.61(b)(5)(iv) and Revenue Ruling 54-98 ] Separate parts of ammunition such as:
[Refer to Revenue Ruling 68-463 6. Am I liable for FAET if I transfer a firearm classified under the National Firearms Act (NFA)? If you transfer an NFA firearm, you must either:
7. Am I liable for FAET on gifts or donations of articles? This depends on the reason you gave the gift or donation. For example, if you gave or donated an article as a “good deed” and receive no compensation in return, you would probably not be liable for FAET. However, if you gave or donated an article as a promotion or advertisement, you would probably be liable for FAET. Note: You should contact the NRC for help in determining whether or not you owe FAET on gifts or donations. 8. Am I liable for FAET on articles stolen from my business? No. You are not liable for FAET on any articles stolen from your business (a theft is not considered a sale). [Refer to Revenue Ruling 67-58 ] Tax Returns 1. How do I report my FAET liability? You will report your FAET liability by filing and submitting a Firearms and Ammunition Excise Tax Return (TTB F 5300.26). [Refer to 27 CFR 53.151(a)(1) ] 2. When do I file a return? You must file a return if you:
You must file your return and pay FAET according to pre-established tax return periods and due dates. Note: Unless TTB instructs you otherwise, you will file your tax returns and pay FAET on a quarterly basis [Refer to 27 CFR 53.151(a) ] 3. What are the quarterly tax return periods and due dates?
Note: If the due date for your return and payment is a Saturday, Sunday, or legal holiday, your return and payment are due on the next succeeding day that is not a Saturday, Sunday, or legal holiday. [Refer to 27 CFR 53.153(a) and 27 CFR 53.153(c) ] 4. What are the monthly tax return periods and due dates?
* For a leap year, your tax period will end on February 29. Note: If the due date for your return and payment is a Saturday, Sunday, or legal holiday, your return and payment are due on the next succeeding day that is not a Saturday, Sunday, or legal holiday. [Refer to 27 CFR 53.153(b)(1) and 27 CFR 53.153(c) ] 5. What are the semi-monthly tax return periods and due dates?
* For a leap year, your tax period will end on February 29. Note: If the due date for your return and payment is a Saturday, Sunday, or legal holiday, your return and payment are due on the next succeeding day that is not a Saturday, Sunday, or legal holiday. [Refer to 27 CFR 53.153(b)(2) and 27 CFR 53.153(c) ] 6. When must I file my return on a monthly or semi-monthly basis? You must file a return on a monthly or semi-monthly basis only if TTB instructs you to do so. [Refer to 27 CFR 53.151(b) ] 7. If I file quarterly and do not incur any FAET liability for a tax period, must I still file a tax return for that period? No. If you file quarterly and do not incur any FAET liability for a tax period, you do not need to file a tax return for that period. [Refer to 27 CFR 53.151(a)(2) ] 8. How do I file my tax return? You must complete your tax return (TTB F 5300.26) in duplicate according to the instructions on the form. Make sure you sign and date your return. Keep one copy for your records and mail the original (along with the appropriate payment) to the following address: Alcohol and Tobacco Tax and Trade Bureau [Refer to TTB F 5300.26 ] 9. When must I file a “one-time” or “occasional” return? You must file a “one-time” or “occasional” return if you: • Manufacture, produce, or import articles on a one-time or occasional basis; and • Are not engaged in the business of manufacturing, producing, or importing firearms or ammunition on a regular basis. [Refer to 27 CFR 53.151(a)(5) ] 10. How do I file a one-time or occasional return? You must complete your tax return (TTB F 5300.26) by:
Note: Keep one copy for yourself and send the original to TTB. [Refer to TTB F 5300.26 ] 11. When must I file a final return? You must file a return when you permanently discontinue manufacturing, producing, or importing articles. [Refer to 27 CFR 53.152(a) ] 12. How do I file a final return? Check the appropriate box in Item 4 of your TTB F 5300.26. Attach a statement to your TTB F 5300.26 containing the following information: • The name of the individual who will keep your records; • The location (address) of your records; and • Whether or not you transferred the business to another person (provide the name and address of who you transferred the business to). Note: Keep one copy for yourself and mail the original to the address listed in Question (J8). [Refer to 27 CFR 53.152(b) and TTB F 5300.26 ] 13. How do I pay my FAET? Your FAET payment must be in the form of a check or money order made payable to the Bureau of Alcohol, Tobacco, and Firearms. Send your payment with your tax return to: Alcohol and Tobacco Tax and Trade Bureau [Refer to TTB F 5300.26 ] 14. What is Electronic Funds Transfer (EFT)? Electronic Funds Transfer (EFT) allows you to send your payments to TTB electronically. You may choose to send your payments by EFT as opposed to using a check or money order. 15. May I pay FAET by EFT? Yes. For further information, contact the National Revenue Center. Note: If you choose to make payments by EFT, you must still file a tax return. [Refer to 27 CFR 53.158] 16. Who is authorized to sign my tax return?
17. When will TTB consider my return as “timely filed”? TTB will consider your return as “timely filed” if you mail it by the due date. For proof of timeliness, we use the U.S. Postal Service's official postmark on your envelope or certified mail. [Refer to 27 CFR 53.154(b) and TTB F 5300.26 ] 18. Are there penalties if I file my return or pay my FAET late? Yes. You will be liable for penalties and interest if you file your return or pay your FAET late. Tax Deposits 1. What is a tax deposit? A tax deposit (TTB F 5300.27) is used to pay FAET when you incur more than $2,000 in FAET liability during a calendar quarter. [Refer to 27 CFR 53.159 ] 2. When must I begin making tax deposits? You must begin making tax deposits once your unpaid FAET liability exceeds $2,000 for a tax period during a calendar quarter. [Refer to 27 CFR 53.159(c) ] 3. What are the calendar quarters and the corresponding tax deposit periods?
Exceptions
[Refer to Industry Circular 96-3] 4. What form do I use to report my tax deposits? You must use a Federal Firearms and Ammunition Excise Tax Deposit (TTB F 5300.27) to report your tax deposits. 5. How much do I deposit? Your first deposit for the current quarter must equal your unpaid tax liability. Your deposit of tax for each semimonthly period thereafter must be equal to the amount of tax liability you incur during that semimonthly period. 6. If I am required to make deposits, do I still have to file a tax return? Yes. If you are required to make tax deposits, you must still file a tax return. 7. Must I make a deposit for any quarter in which I incur less than $2,000 FAET liability? No. If you incur less than $2,000 FAET liability for a calendar quarter, you do not need to make a tax deposit for that quarter. 8. Must I make a deposit if I file a “one-time” or “occasional” return that exceeds $2,000 liability? No. If you file a one-time or occasional tax return, you do not need to make a tax deposit (no matter how large your FAET liability is). 9. If I file semi-monthly tax returns, must I still make a tax deposit if my FAET liability exceeds $2,000? No. If TTB requires you to file your tax returns on a semi-monthly basis, you do not need to make a tax deposit. 10. How do I make my tax deposit? You must complete your Federal Firearms and Ammunition Excise Tax Deposit (TTB F 5300.27) in duplicate according to the instructions on the form. Keep one copy for your records and mail the original (along with the appropriate payment) to the following address: Alcohol and Tobacco Tax and Trade Bureau [Refer to TTB F 5300.27] 11. If I am required to make tax deposits, how do I pay FAET? Your FAET payment must be in the form of a check or money order made payable to the Alcohol and Tobacco Tax and Trade Bureau. Make sure you include your EIN on your check or money order. [Refer to TTB F 5300.27] 12. May I pay my tax deposit by EFT? Yes. You may pay your tax deposit by EFT. If you pay your tax deposit by EFT, you must still send your tax deposit (TTB F 5300.27) to TTB. [Refer to 27 CFR 53.158 ] 13. When will TTB consider my deposit as “timely filed”?
[Refer to 27 CFR 53.159(g) ] 14. Are there penalties if I make my tax deposit late? Yes. You will be liable for penalties if you make your deposit late. |
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