If you’re like us, you LOVE firearms.
Sure, you might disagree with your gun buddies about whether Glock, HK, or Sig is best, but there’s likely one thing we can all agree upon: NFA firearms like silencers (suppressors), short barreled rifles and shotguns, and full-auto machine guns are awesome!
If you like NFA firearms, you might have already heard about a Class 3 License but you might not be exactly sure what one is, what it does for you, nor how easy it is to get one yourself. If this is you, you’re in luck. . . we’re going to cover everything you need to know about getting your class 3 license.
In this article about Class 3 Firearm Licenses, we’re going to cover:
First, we’ll explore the special class of NFA Firearms, what they are, and how to legally make and sell them. Then, we’ll jump into what a Class 3 license is (and what it isn’t) and how to get a class 3 license.
Spoiler alert: there’s really no such thing as a “class 3 firearm” nor a “class 3 license.” Want to know why? Read on…
NFA Firearms get their name because they are the special class of firearms regulated by the National Firearms Act of 1934 (NFA).
These specially regulated firearms are often incorrectly referred to a “Class 3 Firearms.” As we’ll discuss more in the next section, “Class 3” is just one of three classes of taxpayer that a Federal Firearm Licensee (FFL) can be to import, make, or sell NFA firearms.
A Class 3 firearm dealer can sell NFA Firearms but those NFA Firearms were either made by a Class 2 manufacturer or imported by a Class 1 importer. Therefore, a particular firearm can never be a “class 3” firearm… it started it’s life in the United States with either a Class 1 or Class 2 SOT (more on this below) before it ever made it to a Class 3 dealer for sale.
These special class of NFA firearms are:
- Silencers (suppressors)
- Short barreled rifles (SBR)
- Short barreled shotguns (SBS)
- Full-auto machine guns
- Any Other Weapons (AOW)
- Destructive Devices (DD)
In the most simple summary ever, here’s what each of these NFA firearms are:
Silencers are any device that diminishes the report of a portable firearm. Every part of a silencer is considered to be a silencer.
Short Barreled Rifles are rifles (yes, they need to be rifles in the first place) that have an overall length less than 26″ or a barrel length less than 16″
Short Barreled Shotguns are shotguns (yes, they need to be shotguns) that have an overall length less than 26″ or a barrel length less than 18″
Full-Auto Machine Guns are firearms that fire more than one projectile for each single operation of the trigger.
Any Other Weapons are a weird catch-all category of firearms that are best explained in their own article.
Destructive Devices are things like grenades
In order for a normal citizen to possess NFA firearms, a federal tax must be paid and approval from the ATF must be obtained. The tax is $200 per NFA firearm ($5 for AOW) transfer and the recipient must have an approved ATF Form 4. The wait time on ATF Form 4s, can be up to 10 months.
We’ve got some bad news… there’s technically no such thing as a “Class 3 License.”
We get it, this term “Class 3 License” is constantly used (especially at your local gun store), but how many other inaccurate things have you heard in a gun store? 🙂
So, what is a “Class 3 License?” It is really an entity (business or person) who holds a Federal Firearms License (FFL) and who has also become a Class 3 SOT.
Ok, new term… Class 3 SOT vs Class 3 License.
An SOT, or Special Occupational Taxpayer, is something that an FFL holder can become by paying a special annual tax. This annual tax payment makes the FFL entity a special kind of taxpayer that is allowed to make, sell, or import NFA firearms.
Another bonus of becoming an SOT is that the wait time for NFA paperwork with the ATF shortens to a couple of days (instead of many months). And, if the FFL is a manufacturer, then they can make as many machine guns as they want (without pre-approval).
Ok, an SOT is a type of taxpayer that can deal with NFA firearms. So, what is the “Class 3” part?
There are 3 types of SOTs called “classes of SOT.”
- Class 1 SOTs can import and sell NFA firearms
- Class 2 SOTs can make and sell NFA firearms
- Class 3 SOTs can only sell NFA firearms
Each Class of SOT requires a particular type of FFL.
|NFA Firearms||Class of SOT||FFL Types|
|Buy/Sell||3||1, 2, 9|
So, why does it drive us so crazy to hear people refer to a Class 3 License or, even worse, a Class 3 firearm? First, it is inaccurate. Second, that firearm was made by a Class 2 SOT or imported by a Class 1 SOT before it was in the Class 3 SOT’s hands to sell. But, it’s never called a Class 2 (or Class 1) firearm.
So, yes, many people call it a Class 3 License, but now you know that it’s really someone (some company) that has an FFL that became a Class 3 SOT. And the firearm is an NFA firearm that happens to be sold by a Class 3 SOT (but it could also be sold by a Class 2 SOT).
Ok, as we learned above, a better section title is “How do you become a Class 3 SOT?”
Here are the steps to getting a class 3 license:
First, you need to get your FFL. It’s a lot easier than you might think to get an FFL (if you set it up the right way) and you can stay out of trouble with the ATF if you know what you’re doing. Also, we bet that an FFL costs a lot less than you think.
If you’re going to want to make NFA Firearms, then you’ll get a Type 07 FFL. There are many different types of FFL depending on what you want to do in the firearm industry.
Second, after getting your FFL, you need to register as an SOT and pay your annual tax.
If you want to just be a dealer of NFA Firearms, then you would register as a class 3 SOT (what many people call a class 3 dealer). If, however, you’d also like to make NFA Firearms, a type 07 FFL can instead register as a Class 2 SOT.
Class 3 License Cost
So, how much does a “Class 3 License” cost? It costs either $500 or $1000 per year depending on how much you sell per year and the type of business you’re in (and have an FFL for).
|NFA Activity||SOT Class||under $500k in sales||over $500k in sales|
|Dealer or Pawn Broker||3||$500||$500|
It is important that you register for your “Class 3 license” at the right time of year so that you don’t waste money. If you’d like some help with the nuances of this, please consider this course on how to be an SOT
As an SOT, you can import (class 1), make (class 2), or sell (class 3) NFA firearms and save a TON of money and time on NFA firearms for yourself.
And yes, machine guns are legal!
Class 3 License FAQ
Q: How Do You Get a Class 3 License?
A: You get a “Class 3 license” by being an FFL who registers as an SOT by paying an annual tax.
Q: What is a Class 3 License?
A: A “Class 3 License,” or more correctly a Class 3 SOT, is a type of federal taxpayer that can conduct business with NFA Firearms.
Q: What is a Class 3 Firearm?
A: A Class 3 Firearm, actually an NFA firearm, is a special class of highly regulated firearms (silencers, machine guns, etc.).
Q: How long does a Class 3 License Last?
A: A “Class 3 license,” actually an SOT, is actually an annual registration that must be renewed every June 31st.
Q: How Much Does a “Class 3 License” Cost?
A: A “Class 3 license” is actually an annual SOT registration that must be renewed every June 31st.