Is It Legal to Sell Reloaded Ammo?

Chances are that you’ve already typed this question into your search engine of choice and found the answer to be a resounding yes. But there are, of course, some substantial caveats to be aware of, though. If you’re looking for a simple, straightforward guide to getting started, this article will help you keep your business ventures successful and above board. Be advised that there is no one-size-fits-all primer, unfortunately, but this article will give a rundown on the basics of ensuring that all of your proverbial ducks are in a row.  

Those 4 Dreaded Words 

If you’re reloading ammo, chances are you’re either very frugal or you’re on a quest for ultimate accuracy. So, if you are the former, be warned that I’m about to say the four words that no frugal person wants to hear: Talk to a lawyer. This is an absolute necessity that cannot be passed over if you’re going to sell reloaded ammo. I know what you’re probably thinking: “Why not just ask me to take out my wallet and set it on fire?” And I get that, but any expenses you may incur in getting legal advice will probably be much cheaper than an unexpected liability case down the road. 

As I’m sure you already suspect, I have to give the usual disclaimer that I am not a lawyer, and while I can point you toward the things you should probably look into, nothing in this article should be misconstrued as any kind of legal counsel. No matter how many facets of selling reloaded ammo I present to you here, state and local laws may be unique where you’d be selling.  

That aside, let’s talk about what you may need to get started selling your reloads.  

Consider Starting an LLC 

It may seem like a lot of fuss and unnecessary paperwork to start a limited liability company just to sell what should be a potentially cost-saving product, but you need to look out for your most precious asset: yourself. If you were unexpectedly faced with a liability lawsuit, having a LLC might prevent your assets- i.e. your house, your car, and your bank balance- from being seized.  Please notice that I said might. Not to sound like a broken record, but this is one of the reasons that talking to a lawyer is so important. They’ll help you sort out how to best protect you and your assets in the event of a misfortune. No one else, myself included, can offer those kinds of assurances or help you weigh the risks involved. 

Get a Class 6 FFL 

If you’re reloading ammo for a private sale, and you’re not looking to go into the business of reloading for profit, you may be able to skip this step. But, for everyone else, you’ll need a Class 6 Federal Firearms License, which qualifies you to manufacture ammunition in the United States. While reloading is typically much more akin to customizing/recycling than it is to manufacturing, in the eyes of the law, they seem to be one and the same.  

And holding a class 6 FFL doesn’t mean you’re necessarily ready to start reloading at your home workshop. In addition to getting your paperwork in order with the federal government, you’ll also need to check in with your local government, because zoning laws may prohibit you from manufacturing at home.  

Zoning Laws 

Municipal governments typically do not allow people to engage in commercial munitions manufacturing in residential areas. Now, you might not intend to keep a large amount of gunpowder on hand, or even have the intent to make more than a few rounds here and there, but even so, you’ll need to find out what qualifies as ‘manufacturing’ in your area before you move forward. Again, it bears repeating that you’re going to have to seek some legal counsel to make sure you’re not in violation of local ordinances. 

Liability Insurance 

One of your major costs in this endeavor is going to be insurance. While I’m not aware of any federal law requiring liability insurance for the purpose of selling reloaded ammo, forgoing it could be disastrous if something were to go wrong. So, what exactly do you need to check with your lawyer about? 

You may want to ask about commercial general liability insurance to cover any property damage, and you’ll probably also want to look into product liability insurance as well. It may seem unusual to think of reloaded ammo as a new product than something that simply has been renewed or customized, but legally speaking, you’re creating a new product. And products liability insurance may protect you and your business from possible claims of bodily harm- but again, check with a lawyer.   

Your lawyer may recommend other insurance as well, as local laws and your own personal circumstances may bring in some unique considerations. And speaking of unique considerations, be advised that you’ll need to seek out specialized insurance carriers for munitions, as many insurance carriers may not insure hand-loaded ammunition.  

Study Federal and State Laws.  

Having your Class 6 FFL isn’t going to prepare you for selling just anywhere you like in the US. Some states will have their own regulations that you’ll have to follow- most notably California and New York. California will require you to be licensed by the state as a munitions vendor. And in New York, ammunition buyers have to submit a police background check for every purchase, and sellers must be registered with the state as a vendor as well. 

Excise Taxes 

Be advised that as a munitions manufacturer, you’ll be subject to a federal excise tax of 11% on your wholesale sales prices. And there are state-level taxes for California (11%) and Colorado (6.5%) to be aware of as well. In California, it’s possible that you might qualify for an exemption if your total sales are low or if your customers are active duty or law enforcement personnel. So, it’s best to check state websites and hunt for any exemptions you can.  

It also worth mentioning that there are municipal governments that also collect excise taxes. Seattle, Washington also collects an excise tax on reloaded ammunition, as well as Cook County, Illinois. By no means should these two municipal examples be considered an exhaustive list, so as I said before, please check with a lawyer. And, if you haven’t already, it may be worth clicking through some of those links above, as they lead to state websites with more detailed information. And keep in mind that excise taxes are in addition to state and local sales taxes.  

As a side note, the Cook County, Illinois legal battle over the constitutionality of collecting tax on ammunition is pretty interesting, if you happen to be a news enthusiast.   

Is It Worth Your Time? 

As you probably already know, some cartridges and calibers became rare during the pandemic, and some still haven’t become widely available again. So, reloaders are definitely filling a need out there. And for those who are seeking the highest amount of accuracy from their precision firearms, the work of a highly skilled reloader can be well worth the asking price. That said, the amount of legal research to be done, and the mounting expenses to consider cannot be understated. But just an endeavor that appears to be insurmountable doesn’t necessarily mean that’s the case. Check out some of the links in this article, look into some legal advice, and even if you’re not ready for more than private sales of reloaded ammo today, tomorrow never knows.

Written by: Lanna Perkins, Educational Writer