Your comprehensive guide to navigating the manufacturing, sale, and purchase of NFA items. Before we start, it is important to note that this guide is written from the perspective of an FFL holder.
In order to deal in or manufacture NFA items Short barreled rifles (SBR), short barreled shotguns (SBS), suppressors, and machine guns.
Special Occupational Tax
You will need to pay the Special Occupational Tax (SOT), type 1, 2, or 3 depending on your plans. Applying for an SOT is done by completing and returning ATF form 5630.7: Special Tax Registration and Return – National Firearms Act.
The SOT is $500 and must be paid once every federal fiscal year (July 1st – June 30th). The fee is not prorated, this means you pay the same amount if it is granted on July 1st or April 1st and it is always due for renewal on July 1st.
There are three classes of SOT, these are always held in conjunction with an FFL.
SOT Class 1 – Import / Sale of NFA items
SOT Class 2 – Manufacture / Sale of NFA items. The SOT 2 is typically paired with an FFL07
SOT Class 3 – Sale of NFA items. an SOT Class 3 is the typically paired with an FFL01
As a dealer, it is important to quickly distinguish between the 6 NFA forms
Form 1 – Application to Make and Register a Firearm or Suppressor (ATF Form 5320.1)
Form 1 is used when an entity without an SOT want to make a firearm
Form 2 – Notice of Firearms Manufactured or Imported (ATF Form 5320.2)
Form 3 – Application for Tax-Exempt Transfer of Firearm and Registration to Special Occupational Taxpayer (ATF Form 5320.3)
Form 4 – Application for Tax Paid Transfer and Registration of Firearm (ATF Form 5320.4)
Form 5 – Application for Tax Exempt Transfer and Registration of Firearm (ATF Form 5320.5)