nfa, ffl, ffl01, sot-class-3, ohioI live in Columbus, Ohio, and I want to own a NFA Title II item, including:
How can I have fun with any of the above legally? Additionally, what if I want to become a dealer in any of the above?
Machine guns, suppressors, short-barreled rifles (SBRs), short-barreled shotguns (SBSs), destructive devices (DDs), and “any other weapons” (AOWs) are all taxed and regulated under the National Firearms Act of 1934 (NFA) as amended by Title 2 of the Gun Control Act (GCA) of 1968.
Semi-automatic weapons, and all other firearms are regulated under Title 1 of the Gun Control Act (GCA) of 1968.
What most people mistakenly call “Class 3” are properly referred to as NFA or Title 2 firearms.
#I Want To Purchase As A Civilian
To obtain firearms and suppressors you must first check that your state allows them. Not all states allow all of the different types. For example, Michigan re-legalized the purchase of suppressors in September 2011 after having them disallowed back in 1977 (history). Regarding machine guns, a transferable machine gun is one that was manufactured and registered prior to the closing of the registry on May 19th, 1986. Any machine gun manufactured after that date can only be owned by law enforcement, government, or FFLs paying the SOT. If machine guns of modern manufacture are what you’re after, see the section below titled “I Want To Be A Dealer” and evaluate the process.
If the type of NFA firearm or suppresser you want is allowed in your state, the next step is to decide if you’re going to “manufacture” — usually more accurately described as “convert” — your existing firearm (filling out a “form 1”), or simply transfer it as an existing NFA firearm or suppressor from the manufacturer to you (filling out a “form 4”).
The two types of forms a person needs to know are:
These forms can be found — along with instructions for their use — at the ATF Online Firearms Forms page and the ATF Online Firearms FAQ for the National Firearms Act page.
##For transfer (to an individual, in my state): I want to buy a suppressor, or a rifle or shotgun that was registered as a short barrel version at the factory by the original manufacturer.
Put this whole package in the mail — all in duplicate: fingerprint cards, passport photos, signed and filled out ATF Form 4s — and wait for the ATF’s NFA Branch to receive your package, cash your check, run your background investigation, create your tax stamp, and mail it back.
When the package is returned to you with a copy of the approved forms and your attached stamp, take this paperwork into the dealer that’s been holding your NFA firearm or suppressor for all these months. Most FFLs will charge you a rather large sum for transferring an NFA firearm or suppressor, which you will now pay and he’ll hand over your merchandise.
##For manufacture of a firearm (as an individual, in my state): I already have, or will soon have, a rifle or shotgun that I would like to convert to a short barrel version.
Put this whole package in the mail — all in duplicate: fingerprint cards, passport photos, signed and filled out ATF Form 1s — and wait for the ATF’s NFA Branch to receive your package, cash your check, run your background investigation, create your tax stamp, and mail it back. Once you have the paperwork returned, you are allowed to assemble or modify your weapon. You can purchase short-barreled uppers for AR-15s at any time, for example. Mounting that upper to a lower is illegal until the paperwork has been returned and your lower is engraved. Having a gunsmith modify the barrel length of your shotgun is illegal before the paperwork has been returned and the receiver is engraved.
##Variables Timelines for this fluctuate constantly. When I purchased two SBRs on a Form 4 back in 2006, the ATF took just over 2 months to return my paperwork to me. Current reported wait times as of early November 2011 are as high as 6 months. Some people report that a trust or corp makes their process go faster, others have experienced the opposite.
Additionally, there are a lot of variables in this process, state by state and for special situations. State to state, laws allowing certain types of NFA weapons and suppressors can be different. Different people in the Sheriff’s seat can choose to not sign off on your Form 4 or Form 1. They can also choose to simply not sign any NFA paperworkat all. This leads us to yet another variable: trusts and incorporation.
A trust or a corporation (S corp, C corp, LLC, etc.) can own NFA firearms and suppressors. This can either be a true company such as a gun store (see the section below titled “I Want To Be A Dealer”), or it can be a corporation or trust acting on behalf of an individual (you, your estate) or group (your family). The biggest advantages (to me) in doing a trust or corporation are:
There are many more intricacies and benefits to a corporation or trust. Trusts are preferred to corporations generally because corporations have ongoing fees associated.
The best advice I can give you about trusts is to talk to a lawyer who has set up NFA Trusts. There can be differences between the setup of a trust for NFA items and a trust for normal assets. A lot of law firms and estate planning firms will have experience here, and again things can vary state-to-state. Here is a good write-up about the advantages of using a trust for NFA items. Lawyers from some states may or may not be able to practice in your state, so this may only be good for reference. Maybe the author can practice in your state as well as his or you live in the same state, in which case he can help you. Again, you’ll have to do your homework.
#I Want To Become A Dealer
To be a dealer you must obtain a Federal Firearms License (FFL). An FFL alone will not let you purchase or manufacture NFA weapons. First you must obtain the right FFL, or combination of FFLs, from the many different types, to be eligible to obtain status as a special operations taxes payer. You must obtain status as a special operations taxes payer for the additional privileges of dealing with NFA weapons.
##Federal Firearms Licenses
The ATF considers you a “dealer” if you make more than a certain level of your income from firearms. This includes gunsmiths and ammunition makers as you will see:
##Special Operations Taxes
NFA firearms are one of these supplemental privileges. These supplemental taxes are referred to as “Special Operations Taxes” (or just “SOT”) and as with all things, there are different types:
Remember that these are in addition to the tax payer being a licensed dealer (holder of a FFL) already.
To be eligible for Class 3 SOT status, you need a dealer or manufacturer FFL: Type 1, 2, 7, 8, 9, 10 or 11. You will pay an additional yearly tax of $500.
To be eligible for Class 2 SOT status, you need a manufacturer FFL: Types 7 or 10. You will pay an additional yearly tax of $1000 or $500.
To be eligible for Class 1 SOT status, you need an importer FFL: Types 8 or 11. You will pay an additional yearly tax of $1000 or $500.
Reduced tax rates are for small importers and manufacturers. All additional taxes are due on July 1st of each year.
All content is licensed under CC BY-SA 3.0.