FFL License needed to paint camo on customer's guns?

I have a member on my airbrushing website who has been informed by the BATF that they need a "Class 07" to paint firearms for customers.

His words.

"I called again on why i would need the 07 and not the 01/02 and they said its because of "rulling 2009-1" and it only applies to camo, and states that you DO NOT need they 07. But if i am doing anything other than camo coatings, i will need the 07. They said they have all the people in the area that do duracoating have the 07 to be on the safe side. The 07 covers everything the 01/02 can do and is the only option if i plan to do coatings other than just camo."

Federal Firearms Regulations Guide pg 184 section I1 states "A person conducting such activities as a business is considered to be a gunsmith within the definition of a dealer.". You can also tell them to check the U.S.C. 921(a)(21)(D) and 27 CFR 478.11.

For anyone with the knowledge, is this incorrect or the real deal? Anyone painting guns for guys may be interested in knowing.

A couple of points to consider-
1- If your buddy maintains possession of a customers firearm more than ONE BUSINESS DAY he must have at least an 01 FFL (Dealer) to lawfully engage in business.
2- If a Gunsmith performs an alteration/customization on an INDIVIDUALS firearm under contract for the INDIVIDUAL the work performed DOES NOT MEET MANUFACTURER (07 FFL) criteria.

Now if your buddy were to say buy a beat up AR, refinish it with the intent of reselling it then he would meet the criteria for being required to have the 07 FFL.
When this ruling was first implemented it was very restrictive and for example a dealer bought a case of Yugo SKS's and cleaned them up. He did not refinish anything or alter the firearm in any way, he just cleaned the Cosmoline off. He was cited for not having an 07 license.
They have downgraded some of the requirements for an 07 in relation to the document you mentioned since and I did inquire with BATF for clarification as being a Gunsmith myself it is pertinent info to have.
The letter I received basically states point 2 made above. As long as the work is contracted from an individual (and the word individual was used specifically) no 07 is required. Now if your buddy were to get a contract with a company to refinish for them that may fall into 07 territory.

The best thing for your buddy to do would be to either write a letter or Email the BATF describing exactly what he INTENDS to do as far business. He needs to be specific and cite clear examples of work he is expecting to perform.
Let them respond in writing for what they require. Keep the documentation.

As an 07 holder I can tell you the rules are very complicated. We constantly have to contact ATF to verify a rule. There are sections of the rules with sub sections and it's very hard to follow without getting some kind of conformation from ATF on certain things. If you get conformation on a rule or question, save whatever they sent you because if a different agent gets involved, he may not interpret the rule the same way.