Gun Stores & FFL Dealers, CPA & Tax Services

Why Gun Stores and FFL Dealers in Dallas Need a Specialized CPA

Running a gun store or Federal Firearms License (FFL) dealership in Texas means dealing with tax and accounting requirements that most CPAs have never encountered. Between federal excise tax obligations, ATF bound-book inventory reconciliation, NFA item tracking, and the ongoing challenge of maintaining compliant banking relationships, the financial side of a firearms business demands specialized attention. A single recordkeeping gap can trigger both IRS penalties and ATF compliance issues at the same time.

At AG Freideman, we work with gun store owners and FFL dealers across Dallas, Plano, Frisco, and the surrounding DFW area who need a CPA that actually understands their industry. Al Freideman has over 30 years of experience in tax and accounting, and he handles every client personally. No hand-offs to junior staff, no explaining your business model from scratch every year. We know the difference between a Form 4 transfer and a Form 1 manufacture, and we know exactly how those transactions hit your books.

Federal Firearms Excise Tax: Who Owes It and How It Works

If your FFL involves manufacturing or importing firearms or ammunition, you owe Federal Excise Tax (FET) under the Pittman-Robertson Act, collected by the IRS through TTB Form 5300.26. The current rates are 10% on pistols and revolvers, 11% on other firearms and ammunition. These are manufacturer-level taxes, meaning standard retail FFL holders (Type 01) who only buy and resell do not owe FET on sales, but anyone with a Type 07 (manufacturer) or Type 08 (importer) license does.

FET is calculated on the sale price at the time of first sale and is due quarterly by the last day of the month following the close of each quarter. Late filings carry both penalties and interest. We see dealers who hold a Type 07 license for custom gunsmithing work without realizing that assembling a complete firearm from parts can trigger FET obligations. If you modify or build firearms in any capacity, you need a CPA who can evaluate whether those activities create excise tax liability and ensure quarterly filings are accurate and on time.

Bound-Book Inventory Reconciliation and Your Tax Returns

Your ATF Acquisition and Disposition (A&D) bound book is a legal record of every firearm that enters and leaves your business. It is also, from an accounting standpoint, your most critical inventory document. Every firearm listed in that bound book should tie directly to your financial inventory records, and any discrepancy between the two creates serious problems on both the compliance and tax sides.

For tax purposes, your year-end inventory valuation directly affects your cost of goods sold (COGS) and, ultimately, your taxable income. If your bound book shows 347 serialized firearms on hand but your accounting system shows 312, you have a gap that needs to be resolved before filing. We reconcile your bound-book records against your accounting inventory as part of our year-end tax preparation process, catching discrepancies before they become audit triggers. This includes:

• Matching serialized items in your A&D book to your point-of-sale and accounting systems
• Properly categorizing consignment firearms (which you do not own and should not appear in your inventory asset balance)
• Accounting for NFA items held in separate inventory classes
• Valuing slow-moving or obsolete inventory appropriately for tax deduction purposes
• Documenting theft, loss, or damage write-offs with supporting ATF Form 3310.11 filings where applicable

NFA Item Accounting: Transfers, Tax Stamps, and Revenue Recognition

Dealers handling National Firearms Act items (suppressors, short-barreled rifles, machine guns) face accounting complexities that standard retail businesses do not. The $200 NFA tax stamp paid by the buyer is a federal tax, not revenue to your business, but the way NFA transfers flow through your books requires careful handling to avoid overstating income or misclassifying deposits.

NFA transfers through the ATF can take weeks or months to process. During that period, you may be holding a customer deposit, the item remains in your physical inventory, and the sale is not yet complete for revenue recognition purposes. We set up your books so that NFA deposits are tracked as customer liabilities (not income) until the Form 4 transfer is approved and the buyer takes possession. This prevents you from paying taxes on revenue you have not actually earned in a given tax year. For dealers with significant NFA volume, getting this wrong can mean thousands of dollars in overpaid taxes or, worse, understated income if deposits are not tracked at all.

Banking Relationship Documentation for Firearms Businesses

Firearms businesses in Dallas and across Texas continue to face challenges with banking access. Many banks and payment processors categorize FFL dealers as high-risk businesses, leading to account closures, frozen funds, or refusal of service. While the political and regulatory landscape around firearms industry banking has shifted in recent years, the practical reality is that your financial documentation needs to be exceptionally clean to maintain banking relationships.

We help FFL dealers maintain the kind of transparent, well-organized financial records that banks require. This includes monthly reconciled books, clear documentation of revenue sources, proper separation of personal and business finances, and organized records that demonstrate legitimate business operations. If your bank requests financial statements, a profit-and-loss report, or documentation of your business model, we can provide those quickly. For dealers who have experienced account closures, having a CPA-prepared set of financial statements is often the difference between getting approved at a new institution and being turned away.

Gun Store and FFL Dealer Tax Mistakes We Fix

After 30 years of tax and accounting work, Al has seen the same costly mistakes across firearms businesses. Here are the most common ones we correct for new clients:

• Treating NFA deposits as current-year income. Customer deposits for suppressors and other NFA items pending ATF approval are liabilities, not revenue. Booking them as income inflates your tax bill for the year the deposit is received.
• Failing to file or underpaying Federal Excise Tax. Type 07 and Type 08 license holders who perform manufacturing or importing activities sometimes miss quarterly FET filings entirely, creating back-tax exposure plus penalties.
• Inventory discrepancies between the bound book and accounting records. When your physical serialized inventory does not match your financial records, you may be overpaying taxes on phantom inventory or understating COGS.
• Not claiming Section 179 deductions on range equipment and fixtures. Gun stores with indoor ranges can often deduct ventilation systems, bullet traps, target retrieval systems, and range build-out costs in the year of purchase rather than depreciating them over decades. For 2026, the Section 179 deduction limit is over $1 million for qualifying equipment.
• Missing Texas franchise tax obligations. Every Texas LLC, corporation, or partnership must file a franchise tax report and Public Information Report annually with the Texas Comptroller. Gun stores structured as LLCs that ignore this filing risk penalties and loss of good standing, which can affect your FFL renewal.

What Our Firearms Industry Clients Get

We provide full-service tax and accounting for gun stores and FFL dealers. Our business tax preparation for S-Corps and partnerships runs $1,000 to $2,000, and Schedule C sole proprietor returns are $750 to $1,200. Monthly bookkeeping with bank reconciliation and payroll processing is $300 to $600 per month. Texas franchise tax filings are $250 to $500 per year. Every engagement includes direct access to Al, and registered agent services ($149/year) are included free with any tax or bookkeeping package.

We serve gun stores throughout Dallas, Plano, Frisco, Allen, McKinney, Richardson, Prosper, Celina, and all DFW suburbs. Virtual appointments are available for clients who prefer remote service. Call Al directly at (972) 893-3481 or book your free consultation online to get started.