You need to have a Class 3 firearms license if you sell NFA Title II firearms weapons authorized under the National Firearms Act. Title II firearms include machine guns, shotguns, silencers and destructive devices. According to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), a destructive device is typically a missile with the ability to explode.
Special Occupational Tax (SOT)
A Class III federal firearms license (FFL) is connected with a Special Occupational Tax (SOT). If you are a dealer, you must pay the SOT tax to get a Class 3 license. If you want to obtain a Class 3 firearms license as a seller, you need to fill out and submit an ATF Form 5630.7.
Select the Class 3 option (Dealer in Firearms) located on the ATF form. You are required to pay a $500 fee each year. After completing the form, write out a check for $500 and include it in the same envelope. The occupational tax is due each year on the first day of July.
Class 3 License for Private Owners
Whether or not you need a Class 3 license as a private gun owner is not without its share of confusion and controversy. The bottom line is that the ATF does not technically require you to have a Class 3 Firearms license as a private owner. But you do need to have a Class III license if your state requires you to pay the SOT tax.
There is a different procedure for private firearm owners. If you are not a dealer, you must allow the federal government to check your background. The background check is somewhat complicated and includes taking your fingerprints. However, if you pass the check, then you will pay a $200 SOT tax. Note that passing the federal government’s background check is not enough to qualify you for owning a Class 3 firearm. You must also reside in a state that officially approves the ownership of your firearm.
If the state in which you reside has specific requirements, you should know that the process will not happen right away. You may have to wait for a long period before you are approved. In fact, it is not uncommon to wait for more than a year before you are approved. Once you pass the state’s requirements, you will receive a tax stamp. The stamp proves that you have the legal right to own your firearm.
The ATF has specific requirements for applicants. The ATF will not approve anyone who is less than 21 years of age. The applicant must not have any type of prohibition associated with his or her identity. The applicant must provide honest answers to all of the questions on the application. Plus, the person applying for a license must have a physical location in which the firearms are sold.
Here are some other rules for prospective dealers:
- A dealership must meet with the city’s approval.
- A dealership must meet with the state’s approval.
- A dealership must comply with zoning laws.
If you want to buy a firearm as a private individual, you must provide the dealer with a driver’s license or a similar government photo identification card. Plus, you are required to fill out and submit an official ATF 4473 form. There is no guarantee that the dealer will approve your application.