Texas has gun-friendly laws that make it relatively easy to get a Federal Firearms License (FFL). The state also has a high gun ownership rate, so it has an existing market where new firearms businesses can thrive.
Even with these advantages, you’ll still need to complete an FFL application, pass a background check and meet other federal requirements enforcement by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF, or BATF).
The following article will help you learn to navigate the licensing process you must complete before selling ammo, handguns, shotguns and similar items in Texas. Once you know how to meet FFL requirements in Texas, you’re on your way to starting a successful gun store.
The path to business success in the firearms industry doesn’t end with getting the right FFL in Texas. Payment processors consider firearms a high-risk industry, so most charge excessive fees to protect themselves from risk. Zenti can help your business thrive by offering upfront pricing on high-risk merchant services.
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What Types of FFL Licenses Can You Get in Texas?
The ATF has nine FFL license types. Most gun sellers in Texas will want Type 01 or Type 02 licenses. If you’re a gunsmith or want to work with NFA items considered destructive devices, you’ll need to consider other licensing options. (The next section will explain what the National Firearms Act considers “destructive devices.”)
What are NFA items (destructive devices)?
Anyone in the firearms industry needs to know which items the National Firearms Act considers destructive devices. Destructive devices include:
- Missiles with more than 1/4 ounce of explosives
- Weapons designed to fire explosives
- Firearms that have barrels greater than half an inch wide
- Parts used to build items that meet the above definitions
In other words, the typical FFL business in Texas can’t sell grenades, grenade launchers, armor-piercing bullets and similar items. Knowing how to sell a gun in Texas isn’t the same as having a license to deal in destructive devices.
Additionally, you’ll need a destructive device license to manufacture or sell silencers (also known as suppressors). Silencers are legal in most states, but the ATF regulates them more closely.
There are some exemptions. For instance, you could sell a rifle exclusively used for sporting purposes even if it has a barrel greater than half an inch in diameter. The destructive devices label also doesn’t apply to antique firearms.
Do you need Special Operations Taxpayer (SOT) status?
Most firearms sellers in Texas don’t need a SOT. However, you’ll need a SOT to buy or sell NFA items, including suppressors. Many people refer to this as a Class 3 SOT.
You could also get a Class 1 SOT to import NFA items for research and development or a Class 2 SOT to manufacture NFA items.
How Much Does a Federal Firearms License Cost in Texas?
FFL licensing pricing varies according to the type of license you want. Unless you want to work with destructive devices, you can expect to spend between 30 USD and 200 USD. All licenses last three years. You need to renew your license at the end of three years to continue operating.
Type 01 and Type 02 licenses have reduced renewal fees. All other renewals cost the same as the first three years.
- Type 01: 200 USD (90 USD renewal)
- Type 02: 200 USD (90 USD renewal)
- Type 03: 30 USD
- Type 06: 30 USD
- Type 07: 150 USD
- Type 08: 150 USD
- Type 09: 3,000 USD
- Type 10: 3,000 USD
- Type 11: 3,000 USD
You need to pay the fee when you submit your FFL application. Make sure you qualify for a license before you submit your application and fee. The ATF will only issue a refund if you pass.
FFL fees aren’t outrageous, but they can still make it challenging for a new business to thrive. Position yourself for success by choosing a payment processor that offers high-risk merchant services at affordable prices. Zenti can help you process online and in-store payments via a secure payment gateway.
Federal Requirements for a Texas FFL
The Gun Control Act (GCA) establishes federal standards for who can legally own a firearm. You must meet these standards before receiving an FFL in Texas or any other state. To meet GCA standards, you must be a legal US resident at least 21 years of age.
You’re disqualified from getting an FFL if you:
- Use illegal drugs
- Have a felony conviction
- Have been convicted of a domestic violence crime
- Have pending criminal charges
- Have outstanding warrants for your arrest
- Have been committed to a mental institution
- Were dishonorably discharged from the military
After the ATF processes your application, it will perform a background check to ensure you qualify for an FFL in Texas. If you pass the background check, your local ATF field office will assign an Industry Operations Investigator (IOI) to interview you. The interview will take place in person.
Finally, the IOI will review all of your information and submit a recommendation to the Federal Firearms Licensing Center (FFLC).
Expect the entire process to take about 60 days.
Once you have your FFL, you can purchase firearms, ammunition and similar items from manufacturers and wholesalers. Then, you can begin selling to the public. Unfortunately, payment processors consider the firearms industry a high risk, which means they’ll charge high rates.
Payment processors often charge different fees and percentages depending on your customer’s credit card, making it difficult for businesses to know how much they spend on payment processing. Zenti avoids this problem by giving you upfront pricing for every service. Plus, the fees don’t vary by credit card. You pay the same amount (a fee plus a percentage of the sale) for every transaction.
FFL Requirements in Texas
Once you meet federal requirements, you don’t need to worry much about the state’s expectations. You only need to register your business name and get a business license. In many cases, forming a limited liability corporation (LLC) makes sense. You can form an LLC or other business structure through the Texas Secretary of State.
Local Laws Can Affect Your Firearms Business
Knowing how to sell a gun in Texas requires learning about local zoning ordinances.
Depending on where you want to start your business in Texas, local zoning requirements could create some of your biggest challenges. For the most part, zoning issues won’t prevent you from opening a gun store in a retail space. However, each city can create its own zoning laws. You might find that opening a store in Ft. Worth is a little easier than in Dallas. It depends on the area’s specific zoning requirements and how you plan to operate your business.
Zoning laws could also make establishing your home-based FFL as a business address challenging. If your community’s rules say you can’t operate a business from a residential neighborhood, you might need to explore retail locations or consider moving to a less restrictive area.
If you need more clarification about how local zoning ordinances might affect your plans, talk to an expert to get details. A firearms attorney, local Better Business Association office or city councilmember could have the answers you need.
Make sure the experts you talk to know that you plan to start a firearms business with an official license and plan for success. Zenti gives you access to a secure payment gateway that helps you make smart business decisions that lower costs and contribute to success. Once you have the correct license and know how to sell a gun in Texas, Zenti makes payment processing easy.
Starting Your Firearms Business
Getting an FFL in Texas requires a lot of steps, so you want to make sure you have a business plan that helps you sell items and generate profits. The good news is that Texas gun sales peaked at the beginning of the pandemic. They have fallen somewhat since then, but they remain high compared to previous years. Still, you need a reliable plan to reach consumers and convince them to choose you over competitors.
Choose gun shop software
Everyone with an FFL in Texas must maintain at least 20 years of records. That means tracking every item that comes into your inventory, or you sell to a customer. Manual records will take a lot of effort and time. They also create opportunities for human error to interfere with your business and make it harder to renew your FFL license. Gun shop software can make processes easier and more accurate.
Some types of software you should consider are:
- Regulatory compliance software that collects all the information you need to pass FFL inspections
- Inventory management software that helps you identify trends and alerts you when stock runs low
- Bookkeeping software that tracks all of your expenses and sales
- Payment processing services that let you collect payments from in-store customers and online shoppers
Zenti is a gun-friendly payment processor that can benefit your business in several ways. Some advantages of choosing Zenti include:
- Upfront fees for every payment you process
- Integration with popular bookkeeping software
- Real-time fund verification to help you avoid chargebacks
- Data encryption that protects payment information processed in-store and online
- Integration with Shopify, WooCommerce and other popular ecommerce platforms
Sell firearms online to reach a broader audience
Selling firearms online doesn’t have to take a lot of effort. Several websites already help buyers and sellers connect. You just have to post an advertisement on a site and wait for someone to respond.
Meeting the FFL requirements in Texas also means you can auction firearms and ammunition on sites like GunBroker.
Alternatively, you could build a website where potential customers can browse your inventory, put items in an online shopping cart and use credit cards to pay for their purchases. Creating and maintaining a website takes time and money, but it could improve brand recognition. You can also use your business website for advertising services, such as firearm safety training courses and transfers.
What are firearm transfers?
If you have an FFL and know how to sell a gun in Texas, you can also provide firearm transfer services.
When someone buys a firearm online, they cannot have the item shipped directly to their home. Federal law only allows shipping to individuals or businesses that have FFLs.
Once you have your Texas FFL, you can offer firearm transfer services to the people in your area. They can have their purchases sent to your location when they shop online. Then, they can pick up the items from your store.
You’ll need to perform a background check to ensure the buyer can legally own a firearm in Texas. It’s the standard work you do with every in-store sale.
Charge a fee for these services so you can increase your revenues. You might have lost a sale to an online dealer, but you can still earn money from the firearm transfer. Zenti makes it easy for you to process payments for gun transfers without paying excessive fees. Start a high-risk merchant account to process payments securely and quickly.
Partner With Zenti
Partner with Zenti today so you can take a step toward building a successful business in the firearms business. The benefits of having a high-risk merchant service provider ready to work with you might even help you meet FFL requirements in Texas.
Contact Zenti to learn more about your options as an FFL holder.