Manufacturer of Custom Firearms and Suppressors
P.O. Box 225 Elliston, MT 59728
The Devil's in the Details...Know the Laws!
The National Firearms Act of 1934 (NFA 34): This was the first Federal firearms law, and it placed certain classes of firearms into a registered ownership category. Any private individual living in a State that did not restrict them, could possess a functional machine gun, silencer (suppressor), short-barreled rifle or shotgun, smooth-bore pistol, cane gun, or destructive device (certain shotguns, grenade launchers, hand grenades, bazookas, mortars, cannon, etc.), but only after first paying a Federal Transfer Tax of $200 per firearm/device. As subsequently amended, some firearms were removed from NFA classification, and the tax was reduced to $5 for certain short-barreled rifle/shotgun combination guns, pen guns, cane guns, smoothbore pistols, or any other firearm that the Treasury Department classified as "Any Other Weapon" (AOW). The Federal tax on all other functional guns or devices in the NFA registry remained at $200 for each private transfer. Contrary to popular belief, the tax is not an annual tax, nor is it a license. The only time it is paid is when a functional NFA firearm is being transferred to or from a private owner (excepting inheritance).
As a historical footnote, this law had its origins in an attempt to deal with the excesses of prohibition era gangsters and bootleggers, and was itself patterned after an earlier law, the Harrison Anti-Narcotic Act of 1914, that authorized the taxation of cocaine and opiates. With the proposed NFA 34, Congress originally intended to target what it considered the weapons of choice of the most notorious public enemies - machine guns, hand grenades, suppressors, handguns, and short barreled rifles and shotguns. As such, early drafts of the bill included a ban on these gangster weapons and any handgun with a barrel under 12". But after the U.S. Attorney General confided with the President and members of Congress that such a law likely would be overturned by the U.S. Supreme Court as a violation of the 2nd Amendment, the ban was changed to a $200 tax. To prevent circumvention of the tax on handguns, restrictions also were placed on the shortening of any long gun into something that might be readily concealable on a person. In reality, Congress knew that for the average wage earner of the day, a $200 tax would have been tantamount to a de facto ban on the legal possession of anything other than a non-automatic rifle or shotgun. Therefore, in a further effort to ensure its passage, handguns (excepting shortened rifles and shotguns) were removed from the list of registered firearms.
The Gun Control Act of 1968 (GCA 68): Largely modeled after the 1938 Gun Control Act of Nazi Germany, a section of this law updated the National Firearms Act of 1934 (NFA 34) by restricting the transfer of newly imported machine guns to the military, law enforcement, and certain Special Occupational Tax (SOT) payers. In addition, a short moratorium was provided before the law went into effect, to allow unregistered machine guns and other NFA firearms already in private hands, to be added to the Federal Registry without penalty.
The Gun Owners Protection Act of 1986 (GOPA 86): A somewhat vague statement was added to this bill that has been interpreted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) and some Federal Courts to mean no machine guns registered after enactment (May 19, 1986) can be built and sold to private individuals. BATFE further concluded that Special Occupational Tax (SOT) payers cannot receive "post-May" guns without first presenting a letter from a qualifying government agency that has requested to see the firearm. These rulings do not apply to other types of National Firearms Act (NFA) firearms. Transfers to government agencies having law enforcement or military functions are allowed. SOT payers who are also licensed as manufacturers are allowed to produce machine guns from scratch, from kits, or by means of conversion. They cannot transfer them to private individuals. They can be transferred to other SOT payers or government agencies only as described above. Post-May 19th guns cannot be retained by a SOT payer who fails to renew his SOT annually.
The Violent Crime Control and Law Enforcement Act of 1994 (VCCLEA 94): This law sunset on 30 Sep 04 and no longer applies. This law banned the public sale of new detachable magazines with more than a ten round capacity, and invented a new term - assault weapon, the future manufacture of which were also banned from public sale. Note, the law applies only to firearms manufactured after enactment of the law. Specifically, it limits certain features on certain types of firearms. Semiautomatic rifles with detachable magazines may possess no more than one of the following features: pistol grip protruding conspicuously beneath the action, telescoping or folding stock, threaded barrel designed to accommodate a flash suppressor, flash suppressor (not to be confused with a muzzle brake), grenade launcher, bayonet mount. Semiautomatic pistols with detachable magazines may possess no more than one of the following features: magazine that attaches outside the pistol grip, threaded barrel, shrouded barrel, unloaded weight of 50 ounces or more, a semiautomatic version of an automatic firearm. Semiautomatic shotguns may possess no more than one of the following features: folding or telescoping stock, pistol grip that protrudes conspicuously below the action, fixed magazine capacity over five rounds, ability to accept detachable magazines.
State Laws and Local Ordinances: Every state except Hawaii allows some type of ownership of National Firearms Act (NFA) firearms, but about half the states (and perhaps some local municipalities) have statutes or ordinances that restrict or further regulate NFA ownership. These can range anywhere from a state permit requirement to a ban on certain types of NFAs. For example, among its many other restrictions, California bans suppressors, but allows machine guns and large bore destructive devices if one can acquire their rarely issued and discretionary state permit. Connecticut allows machine gun ownership but only if the gun is not select-fire, i.e., able to shoot semi-automatic as well. If you are uncertain of the applicable laws in your area, contact your state or national gun rights organization for help. They likely will know more about your local firearms laws than anybody else. If you believe your laws are too vague, bizarre, or restrictive, you can work through national, state, or local grass roots organizations to improve them. This approach has proven highly successful in several states in recent years. For example, thanks to the efforts of pro-gun civil rights groups, Montana and Washington no longer restrict ownership or use of suppressors; South Carolina now allows private ownership of all NFAs; North Carolina no longer requires a sheriff's permission and FFL to possess a NFA; and in Texas it is now legal to hunt with a suppressor.
Where to find NFA Firearms: A private citizen can acquire National Firearms Act (NFA) firearms from other private individuals or dealers in his own state so long as there are no state laws restricting ownership. Most states (40 at our last count) allow private ownership of at least some NFAs, but if you have any questions, e-mail us and we'll let you know. Regular gun dealers, SOT payers, military organizations, and law enforcement agencies can acquire NFA firearms from sources in any state, i.e., manufacturers, dealers, private collectors, or government agencies. Confiscated firearms may be retained or acquired by state or local government agencies, with the approval of the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).
Private Transfers: A private citizen can acquire functional National Firearms Act (NFA) firearms from private collections in his own state, provided he first pays the applicable NFA transfer tax (Form 4) on each firearm and receives prior approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE). The Form 4 requires payment of the applicable Federal Transfer Tax. Unless filing as an estate (trust) or corporation, the applicant also must provide recent photographs, fingerprint cards, and a law enforcement endorsement. If a firearm is nonfunctional and registered as a DEWAT (deactivated war trophy), the tax is not due, but a Form 5 must be filed and approved before taking receipt of the NFA firearm. The Form 5 also requires a law enforcement endorsement, fingerprint cards, and photographs. If a private citizen is receiving any NFA firearm as the lawful heir of an estate, the tax exempt Form 5 is submitted along with fingerprint cards and photographs, but the law enforcement endorsement is not required. Inherited firearms can be shipped to a lawful heir residing in another state if the receiving state allows private ownership of the particular type of NFA. The heir cannot take receipt of the firearm until the Form 5 is approved by BATFE.
Government Agency Transfers: There are no federal prohibitions on any type of government entity acquiring most National Firearms Act (NFA) firearms, including many destructive devices. Some states prohibit law enforcement agencies from possessing certain types of NFA firearms or destructive devices. All government agencies are exempt from paying Federal Transfer Taxes or Federal Excise Taxes. In most cases, machine guns and other NFA weapons can be imported, purchased off-the-shelf, or custom manufactured specifically for any authorized government agency by using the tax exempt Form 5. Seized or confiscated firearms can be retained by state and local law enforcement agencies, but they must be registered with BATFE on a Form 10. Federal agencies are exempt from the registration requirement. Excluding direct military contracts with licensed manufacturers, all other transfers to government agencies, including law enforcement agencies, must first be approved by BATFE. All foreign transfers require State Department approval.
SOT Dealer Transfers: The Special Occupational Tax (SOT) is an annual fee paid to the U.S. Treasury Department by dealers, manufacturers, or importers of certain products including alcohol, tobacco, and firearms. In the case of firearms, the SOT is broken down between National Firearms Act (NFA) dealers, manufacturers, and importers (a separate SOT applies to destructive devices). For our purposes the term "SOT payer" refers to any currently licensed gun dealer, manufacturer, or importer who also has paid the SOT for dealing in NFA firearms. SOT payers have the advantage of being able to transfer tax exempt, functional NFA firearms to other SOT payers and government agencies, with the prior approval of the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE). SOT payers also can acquire registered NFA firearms from any regular gun dealer or private citizen, but only after paying the applicable transfer tax and receiving BATFE approval. SOT payers can transfer certain functional NFA firearms to in-state residents and to both in-state and out-of-state regular gun dealers, but only after they have paid the appropriate transfer tax and received approval from BATFE.
Regular Gun Dealer Transfers: Regular gun dealers or manufacturers who do not pay the Special Occupational Tax (SOT) to deal in National Firearms Act (NFA) firearms, still can acquire functional NFA firearms from in-state or out-of-state sources. If the firearm is a machine gun, they are restricted to purchasing only those machine guns registered prior to May 19, 1986, excluding all dealer samples. The applicable NFA transfer taxes must first be paid on each NFA firearm ordered. Once this paperwork is approved and they have received shipment, transfers can then be conducted with private individuals in-state, or with other dealers either in-state or out-of-state. These transfers also require payment of the tax and BATFE approval before they can be completed.
How to Pay the Tax: If you are acquiring a National Firearms Act (NFA) firearm from a (Special Occupational Tax) SOT payer, he will provide you with copies of the required paperwork for each firearm being transferred to you. If this is a private transfer or a transfer from a regular gun dealer who does not possess a SOT, forms can be acquired from the Bureau of Alcohol, Tobacco and Firearms (BATFE), National Firearms Act Branch, Washington, D.C. Some states have their own requirements in addition to the federal paperwork. Check with the appropriate licensing bureau in your state. The federal paperwork involves three forms, two of which must be completed in duplicate (ATF Form 4 and fingerprint card). The front of the ATF Form 4s are filled out and signed by the seller (See exceptions for SOT payers and corporations below). On the back of the Form 4s are placed recent photographs of the purchaser. The purchaser also signs the block under his photograph. The bottom backside of the form is endorsed by the purchaser's sheriff, chief judge, police chief, etc. The second set of forms is the FBI fingerprint cards. While the Form 4 is being endorsed, ask to be fingerprinted using the cards supplied by BATFE. Both the person fingerprinted and the person taking them signs these forms. The third form is the ATF 5330.20, Certificate of Compliance with 18 U.S.C. 922(g)(5)(B). This is a statement by the transferee (buyer) that he is a legal resident of the United States. The transferee should complete this form using capital letters and sign it. The transferor (seller) then mails the paperwork and a check for the Federal Transfer Tax to BATFE. On average it takes about 90 days for approval (NOTE: as of July 2011, BATFE reorganized their NFA Branch to improve efficiency. According to their customer service branch, the current estimated turnaround time for all Form 1 and Form 4 transfers has increased to five months). The seller will receive back one of the Form 4s with a Federal Transfer Tax Stamp attached to it. This is given to the purchaser when he picks up the NFA firearm. It's his firearm from then on. No further tax is due.
Corporate or Estate (Trust) Ownership: In some areas it is difficult to get a law enforcement signature on the tax paid Form 4 request to transfer a National Firearms Act (NFA) firearm. To circumvent this problem, some people purchase the gun through a corporation or an estate. If you are a SOT payer acquiring a firearm from a private source, a private individual who is creating an estate, or someone who is incorporated or is a senior officer in a corporation, you can acquire an NFA firearm on a Form 4 without the need for a law enforcement endorsement, photograph, or fingerprint card. You still must pay the Federal Transfer Tax. If the gun is being transferred to a corporation (or other legal entity such as at trust), it must be retained by the corporation (or trust) until it is dissolved. At such time the gun must be sold or re-titled to another entity or person using a tax paid transfer, or surrendered to the Bureau of Alcohol, Tobacco and Firearms (BATFE).
In the case of a corporate transfer, the Federal Firearms License (FFL) holder will use the legal name of the corporation to identify it as the transferee on the Form 4 application. No individual name shall be included in identifying the transferee. A copy of the Articles of Incorporation must be included with the Form 4. This documentation must identify a point of contact for the corporation and must be sufficient for ATF to establish the legitimacy of the corporation. If the firearm being transferred is a machine gun, short barreled rifle, short barreled shotgun, or destructive device, an officer or director of the corporation must complete item 15 on the reverse side of the Form 4. Items 13, 14, 16, and 17 of the Form 4 do not require completion for transfer to a corporation, nor is the submission of ATF Form 53330.20, Certification of Compliance with 18 USC 9229g)(5)(B), required.
In the case of estate ownership, an NFA firearm can be transferred using an approved Form 4, or made using an approved Form 1 (with the exception of machine guns which currently are restricted from private manufacture). Estate owned firearms have the advantage that trusteeship can be transferred, and/or inheritance can be specified by name or status (spouse, son, daughter, etc.) to lawful individuals. A lawful individual is anyone who legally can possess the NFA, therefore anyone with an existing felony conviction or someone who has been adjudicated mentally defective cannot act as trustee, lawful heir, or otherwise take possession of the NFA. Minors can act as trustees or take possession through inheritance once they reach legal age. Another advantage of the trust is that it need only be created once. Once it is notarized, plain copies of it can be submitted to BATFE with each NFA application you file. NEVER SEND THEM YOUR ORIGINAL.
Preparing a trust: Establishing the estate trust can be quite simple or somewhat complicated, depending upon which approach you use, and whether or not your State imposes any restrictions or special conditions. Generally speaking, a trust legally established in one State is recognized in all 50 States. The simplest way to create a trust is through a GOOGLE search online for a generic trust sample or a fill-in-the-blank trust program. Some of these samples and programs are free, and others may range in cost from $10 - $50. You may be able to find a trust kit of fill-in-the-blank trust form at a local office supply store. However, the safest (and most expensive) way to create a trust is to contact a local Notary Public, CPA, or lawyer. Your trust need not be specific to firearms, and can be written generically to cover other assets such as real estate, bank accounts, and investments. If you plan to include such items in your trust, then hiring a competent estate lawyer would be your best bet, but understand you may be charged several hundred dollars for his service. Whichever course you choose, complete the Revocable Living Trust by entering your name in the appropriate locations, and the name of each designated successor trustee (and heirs, if desired). This documentation must identify a point of contact for the trust and must be sufficient for BATFE to establish the legitimacy of the trust. Two witnesses must be present to sign and have the Notary Public apply their seal and complete the form. If using the Notary Public for the entire job, your cost and the time required are minimal. All you will need is satisfactory identification (ask the Notary Public what is preferred). The trust should contain a Schedule A and Schedule B, which are left blank with regard to any NFA you are acquiring, but must be included with the documentation establishing the trust when submitting your ATF Form 4 (transfer) or Form 1 (manufacture) to BATFE for approval. Only after BATFE approves the transfer/manufacture, should you enter the NFA on the Schedule A (This same rule applies to all subsequent NFAs you want added to the trust).
Whether using a fill-in-the-blank trust kit or a professionally prepared trust, as a minimum, the following clarifying statements should be included in one form or another:
Entering trust information on a Form 4 (NFA transfer): In the case of Form 4 transfers, the FFL holder will use the legal name of the trust to identify it as the transferee on the Form 4 application. In block 2a (Transferee's Name and Address), enter "The (trust name) Revocable Living Trust" with your address. If the firearm being transferred is a machine gun, short barreled rifle, short barreled shotgun, or destructive device, a director of the trust must complete item 15 (Transferee's Certification) on the reverse side of the Form 4. Enter the trust name in the first blank and sign your name and the title "Grantor and Trustee" in the bottom block, and date it. Items 13, 14, 16, and 17 of the Form 4 do not require completion for transfer to a trust, nor is the submission of ATF Form 53330.20, Certification of Compliance with 18 USC 9229g)(5)(B), required.
Entering trust information on a Form 1 (NFA manufacture): If submitting a Form 1, in block 3b (applicants name), enter "The (trust name) Revocable Living Trust" with your address. In block 10 enter your name and the title "Grantor and Trustee". Leave the reverse side of the Form 1 blank. Keep in mind that while your name is the logical name for the trust, you can use your initials or any other name you desire. You also have the option of entering a long trust name, followed by an abbreviated form of the name if you state "also may be known as" or "referred to as". This is important to keep in mind because ATF requires the trust name or authorized abbreviation to be engraved/stamped on the NFA just as it appears in the trust document, along with your city and state (two letter state abbreviation is allowed), and a unique serial number (if a pre-existing serial number is not already present). Please note that the marking requirements may appear to contradict the instructions that accompany the Form 1, which says such new markings apply to firearms assembled from parts. However, BATFE has confirmed to us that this naming convention applies to all Form 1 firearms, even if it is a pre-existing firearm with an existing name, place of manufacture, and serial number. You have the option of sending a written request for variance (in duplicate) to the Director of BATFE if you believe existing markings meet the identification criteria. Otherwise, you must engrave or stamp the required identification to a depth of .003" using at least 1/16" inch characters. Consult the BATFE website for further details.
Remember, if you are submitting a Form 4 or Form 1 using either the
Corporate or Estate option, no photographs, fingerprint cards, or law enforcement
endorsement are required. Leave these areas blank. Since the FBI fingerprint
check is omitted, your turnaround time may be reduced by 30 days or more. (NOTE: as of July 2011, BATFE reorganized their NFA Branch to improve
efficiency. According to their customer service branch, the current estimated
turnaround time for all Form 1 and Form 4 transfers has
increased to five months or longer)
(NOTE: as of July 2011, BATFE reorganized their NFA Branch to improve efficiency. According to their customer service branch, the current estimated turnaround time for all Form 1 and Form 4 transfers has increased to five months or longer)
Rumors and Internet lore about NFA trusts: In recent years numerous rumors have spread across the internet warning potential trustees they could be jailed, fined, or have firearms in their trust seized by BATFE, if that agency determines after the fact that the trust was invalid. The stories relate how trustees have suffered heavy penalties or even gone to prison for what amounted to minor infractions involving the wording or structure of the trust. Such stories do not ring true for a number of reasons. First there is something called mistake of fact which is not to be confused with mistake of law. Mistake of fact is a defense to a criminal charge, while mistake of law is not. Let us suppose a convicted felon attempts to circumvent Federal by using a what appears to be a valid trust to obtain possession of a NFA. This would be a mistake of law. It is simply the old ignorance of the law or the "I did not know it was illegal" argument. This is not a valid defense. However, a mistake of fact is a valid defense. In this latter case, a trustee who is not prohibited by law from possessing a firearm, can rightfully argue that he believed he possessed a valid trust, whether he prepared it himself or used someone he believed to be competent estate attorney. The error in this case is that you mistakenly believed the trust was prepared correctly. An agency or prosecutor can of course always push the issue, but they are on far shakier prosecutorial ground where there has been a good faith effort to comply with the law. A search was conducted of the Westlaw database All Federal Cases. These database include all federal district court and appellate court cases. The following search criteria were used: first search "National Firearms Act" and "NFA Trust"; second search "National Firearms Act" and "National Firearms Act Trust"; third search "National Firearms Act" and "gun trust"; fourth search "National Firearms Act" and "firearms trust". No results were found for any of these searches. Finally, a search for "National Firearms Act" and "Trustee" was tried. While 18 results were found, none appeared to involved an NFA trust trustee. Most of them regarded bankruptcies or other cases somehow involving trustee and some reference to the National Firearms Act. BOTTOM LINE: To date (18 March 2011), we have been unable to confirm any case exists where a "mistake of fact" was provided as the ground for prosecution. If anyone has evidence to the contrary, please provide us with the specific case numbers of these prosecutions so we can research them more thoroughly, and report our findings.
Travel and Use: Do not take National Firearms Act (NFA) firearms out of state without first checking with the Bureau of Alcohol, Tobacco and Firearms (BATFE). For machine guns, short barrel rifles, and short barrel shotguns, you will need prior approval from BATFE on a Form 5320.20 to travel interstate or to permanently move NFA firearms to another state. This protects you from accidentally going someplace where they are banned. If the state you are traveling to allows possession of the type of NFA firearm you own, and you have received prior approval on a Form 5320.20 (if applicable), then you can transport the firearm through any state just like any other firearm. That means it must be unloaded and readily inaccessible (in a locked case or trunk of the car). While in a travel status you are afforded the same protection as any other gun owner under the Gun Owners Protection Act (GOPA 86) law. You cannot be legally arrested for simply passing through a state, county, or township where the guns are banned unless you violate the procedures just described or stop in that state for an extended period of rest. Necessary stops for food, gas, repairs, etc., are allowed. Stopping to site-see, visit friends, or even spend the night, might be construed as an unnecessary delay and place you at risk. Check your state and local laws for other restrictions that may apply regarding hunting, concealed carry, or self-defense with an NFA firearm.
Temporary Transfers: National Firearms Act (NFA) firearms may be left for repair with an authorized person (dealer, gunsmith, manufacturer) without filing any federal paperwork (check your state and local laws for any restrictions). The Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) advises owners to first file a Form 5 before doing this. The Form 5 was designed for the purposes of inheritance, government acquisition, or to transfer a deactivated firearm. It looks very similar to the Form 4, the main difference being that no tax is paid. However, law enforcement endorsements, photographs, and fingerprint cards are required (unless waived by BATFE). As a result, the Form 5 is a bit awkward for purposes of repair. If you are taking the firearm to someone local and reputable, and the repairs won't take a very long time, then a Form 5 may seem pointless. If you are shipping the firearm to someone you don't know, it might be best to use the Form 5 as an audit trail. Indeed, some companies won't accept NFA firearms without an approved Form 5. Use your best judgment.
Transferable Firearms: National Firearms Act (NFA) firearms that can be transferred to private citizens on a tax paid Form 4 are the most desirable and therefore the most expensive ones to acquire. They are often referred to as "fully transferable". Nearly all NFA suppressors, short barrel rifles, short barrel shotguns, and AOWs are transferable. The number of registered machine guns that are transferable was frozen in 1986. Included in this category are the following machine guns:
Original or converted machine guns, whether foreign or domestic, if added to the Federal Registry prior to enactment of the Gun Control Act of 1968 (GCA 68).
Deactivated war trophies (DEWAT) that were registered prior to enactment of the GCA 68. DEWATs can be reactivated after payment of the $200 Federal Transfer Tax and approval by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).
Domestically manufactured or remanufactured guns that were registered after the GCA 68 enactment, but prior to the enforcement date of the Gun Owners Protection Act of 1986 (GOPA 86) on May 19th, 1986. This includes registered receivers, sears, bolts, or other parts accepted by BATFE.
Imported guns that were remanufactured into machine guns prior to the GOPA (May 19, 1986). This includes registered receivers, sears, bolts, or other parts accepted by BATFE.
Curios and Relics: Some states allow private ownership of machine guns only if they are listed as Curios & Relics by the Federal Government. Examples would include original Thompson 1921 or 1928 submachine guns, and early production M-16 rifles. The Curios & Relics list is periodically updated and you can petition for particular guns to be added. Normally a gun is accepted to the list if the Federal Government determines it is of some historic value or of such an age or rarity that it is unlikely to see criminal use. Collectors who possess a Curios & Relics Federal Firearms License (C&R FFL) can purchase these guns out-of-state, with prior payment of the applicable transfer tax and approval by the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE).
Pre-May Dealer Sample: Machine guns imported after 1968 and prior to May 19, 1986, are transferable to Federal Firearms License (FFL) dealers (01) and manufacturers (07) and importers who have paid the Special Occupational Tax (SOT) for the current year. A dealer who acquires a "pre-May" dealer sample and then fails to pay the SOT in succeeding years may retain the gun in his private collection. It only can be transferred to someone holding a SOT or to an approved government agency, usually military or law enforcement. An exception is made sometimes if the gun is being inherited from the dealer's estate by a family member.
Post-May Dealer Sample: Any machine gun manufactured or imported after May 19, 1986, can be transferred between Special Occupational Tax (SOT) payers only if they first provide a letter on agency letterhead showing that a legitimate government organization has requested to see it. This usually means a law enforcement agency or military unit. The gun can be retained by the dealer/manufacturer only so long as he pays his annual SOT. If he drops the SOT, the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) expects him to first dispose of, surrender, or destroy the gun. It can be transferred only to another SOT payer or approved government agency, as previously described.
Privately Building NFA Firearms: Provided there is no State or local restriction, you can build your own National Firearm Act (NFA) firearm if you receive prior approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) on a tax paid Form 1. Along with the Form 1, you must include fingerprint cards, law enforcement endorsement, and a drawing of the firearm (unless filing as a corporation or estate). Machine guns will not be approved. Only suppressors, short barrel shotguns, short barrel rifles, and firearms categorized as Any Other Weapon (AOW) will be approved. In all cases, the tax will be $200 per firearm. Once approved, they will be treated as any other fully transferable NFA firearm. ATF requires your name, corporate name, or trust name (as applicable) be engraved/stamped on the NFA just as it appears in the trust document, along with your city and state (two letter state abbreviation is allowed), and a unique serial number (if a pre-existing serial number is not already present). Please note that the marking requirements may appear to contradict the instructions that accompany the Form 1, which says such new markings apply to firearms assembled from parts. However, BATFE has confirmed to us that this naming convention applies to all Form 1 firearms, even if it is a pre-existing firearm with an existing name, place of manufacture, and serial number. You have the option of sending a written request for variance (in duplicate) to the Director of BATFE if you believe existing markings meet the identification criteria. Otherwise, you must engrave or stamp the required identification to a depth of .003" using at least 1/16" inch characters. Consult the BATFE website for further details.