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I think you have to prove you have a storefront, an actual business.
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true.... gone are the days you could be a "kitchen dealer"
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You can still operate out from your house. I know a guy in WA that operates out of his house, he only charges a $20 fee to import. The ATF does not have a problem as he has a sturdy safe to keep the inventory in. Things have changed since 1994 when Clinton was elected. The FFL fee is $200/3 years, $90 to renew.
Here is some good info;
http://www.fega.com/members/batf.html . Just order the ATF form 7 from the ATF and fill it out. The ATF inspects before the application is approved and the license issued. From what I have heard, the compliance guys are usually helpful; they are not the enforcement thugs that make the news from time to time. One thing the BATFE frowns on is people who get a license soley for amassing a personal collection. You must be a real dealer and sell at least a few guns.