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:
- What is a Class 3 Firearm License?
- How to Get a Class 3 License
- How Much Does a Class 3 License Cost?
- Basics of NFA Firearms
First, we’ll explore what a Class 3 firearms license is (and what it isn’t) and how to get a class 3 license for yourself.
Then, we’ll jump into the special class of NFA Firearms, what they are, and how to legally make and sell them.
What is a Class 3 Firearms License?
A Class 3 License allows firearms dealers (FFLs) to sell NFA Firearms like silencers and machine guns without paying a per item tax.
But, we’ve got some bad news… there’s technically no such thing as a “Class 3 Firearm 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?” A “class 3 firearm license” is really a Federal Firearms Licensee (FFL) who has paid a special tax to 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.
If you’re not comfortable with the topic NFA firearms, don’t worry, we cover NFA firearms in detail below.
As you may already know, when an NFA firearm is made and every time it changes ownership (sold), a special federal tax must be paid. For most NFA firearms, the making and transfer tax is $200 – the one exception is “Any Other Weapons” (AOWs) which only have a $5 tax.
|Firearm Type||NFA Tax|
|Short Barreled Rifle||$200|
|Short Barreled Shotgun||$200|
|"Any Other Weapon"||$5|
By becoming an SOT, an FFL pays the Special Occupational tax (typically $500) once per year. And as an SOT, the FFL no longer has to pay a tax every time an NFA firearm is made or transferred.
This means that becoming an SOT keeps a firearms dealer from having to pay $200 every time a silencer (or other NFA firearm) is made or purchased for resale. The FFL avoids the per item tax but the FFL’s customers will still have to pay the NFA tax upon purchasing the NFA item from the FFL. As you can see, by the third silencer purchased the FFL dealer is already saving money. ($200 each times 3 is $600 vs. $500 once a year).
As a note: becoming an SOT for an NFA firearm manufacturer isn’t a money saving venture, it is required to make 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.” The 3 classes of SOTs are:
- 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 Firearm Activity||SOT Class||FFL Type|
|Selling NFA Firearms||3||Type 1, 2, or 9 FFL|
|Making and Selling||2||Type 7 or 10 FFL|
|Importing and Selling||1||Type 8 or 11 FFL|
So, why does it drive us so crazy to hear people refer to a <strong>Class 3 License</strong> 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 Firearm 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 was made by a Class 2 SOT and happens to be sold by a Class 3 SOT (but it could also be sold by a Class 2 SOT).
Hopefull all of this infomration about what a class 3 firearms license is hasn’t confused you and you can see the benefits of an FFL becoming an SOT.
How to Get a Class 3 License
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:
- Get a Federal Firearms License (FFL)
- Register as an Special Occupational Taxpayer (SOT)
Step 1 – Get an FFL
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.
Contrary to popular belief, you can even get an FFL from your home – in fact, most FFLs in the country are home-based FFLs. As long as you meet the FFL License Requirements, you’re good to go!
Step 2 – Become an SOT
Second, after getting your FFL, in order to become an SOT, you need to register 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 and make and sell NFA firearms.
If you’d like some help with either of these steps, check out RocketFFL
Class 3 Firearm 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).
|FFL Type||SOT Class||Under $500k Cost||Over $500k Cost|
|Type 1 FFL||3||$500||$500|
|Type 2 FFL||3||$500||$500|
|Type 3 FFL||n/a||n/a||n/a|
|Type 6 FFL||n/a||n/a||n/a|
|Type 7 FFL||2||$500||$1,000|
|Type 8 FFL||1||$500||$1,000|
|Type 9 FFL||3||$500||$1,000|
|Type 10 FFL||2||$500||$1,000|
|Type 11 FFL||1||$500||$1,000|
It is important that you register for your “Class 3 license” at the right time of year so that you don’t waste money. The SOT tax year begins and ends on the same date for everyone regardless of when you actually register. 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!
Basics of NFA Firearms
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 discussed above, “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.
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.
However, for those citizens who choose to get an FFL (even a home-based FFL), then they can get NFA firearms much faster (a couple of days at most) and much cheaper! If you’re curious about whether you qualify for an FFL, you can check out FFL License Requirements.
Class 3 License FAQs
A: You get a “Class 3 license” by being an FFL who registers as an SOT by paying an annual tax.
A: A “Class 3 License” allows firearm dealers (FFLs) to sell NFA Firearms like silencers and machine guns without paying a per item transfer tax.
A: A Class 3 Firearm, actually an NFA firearm, is a special class of highly regulated firearms (silencers, machine guns, etc.).
A: A “Class 3 license,” actually an SOT, is actually an annual registration that lasts for one year.
A: A “Class 3 license” typically costs $500 but it can cost up to $1,000 depending on the size of business and firearm activity conducted.
A: No, a “Class 3 license” is not required to own silencers or any other NFA firearm. Instead, it is required for an FFL engaged in the business of making or selling NFA firearms.
A: NFA firearms are a special class of highly regulated firearms including, machine guns, silencers (suppressors), short barreled rifles, short barreled shotguns, and “any other weapons.”
A: The requirements for a Class 3 License include having a Type 01 FFL or a Type 02 FFL and the intent to be engaged in the business of selling NFA Firearms.
April 30, 2022
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April 27, 2022