01 FFL & 03 SOT

rmbstyle17 · Oct 30, 2014

So I have been looking into applying for a 01 FFL to do strictly transfers out of my residence. I understand that you can not use the 01 FFL for the sole purpose of enhancing your own personal collection, but my question is roughly how many transfers would I have to conduct every month or year so the ATF would see it as a legitimate business? Also I would like to get my 03 SOT so I could get a hold of post 86 mg's. My other question is do you have to conduct a certain amount of class 3 transfers so the license is not revoked? In other words, it is it okay to have a 03 SOT for the purpose of having post 86 mg's?

Mark75H · Oct 30, 2014

rmbstyle17 said:
So I have been looking into applying for a 01 FFL to do strictly transfers out of my residence. I understand that you can not use the 01 FFL for the sole purpose of enhancing your own personal collection, but my question is roughly how many transfers would I have to conduct every month or year so the ATF would see it as a legitimate business? Also I would like to get my 03 SOT so I could get a hold of post 86 mg's. My other question is do you have to conduct a certain amount of class 3 transfers so the license is not revoked? In other words, it is it okay to have a 03 SOT for the purpose of having post 86 mg's?

Your zoning has to allow a business at your location.

rmbstyle17 · Oct 30, 2014

Mark75H said:
Your zoning has to allow a business at your location.

I know, I have already looked into that.

bobthefisher · Nov 1, 2014

You'll also need a "law letter" from a local law enforcement or government agency to acquire post-86 dealer samples with an FFL01/Class III SOT.

dblas · Nov 2, 2014

rmbstyle17 said:
So I have been looking into applying for a 01 FFL to do strictly transfers out of my residence. I understand that you can not use the 01 FFL for the sole purpose of enhancing your own personal collection, but my question is roughly how many transfers would I have to conduct every month or year so the ATF would see it as a legitimate business? Also I would like to get my 03 SOT so I could get a hold of post 86 mg's. My other question is do you have to conduct a certain amount of class 3 transfers so the license is not revoked? In other words, it is it okay to have a 03 SOT for the purpose of having post 86 mg's?

I don't believe there are any "minimums" set by ATF for either license. With that said, call the ATF and find out, better still if they can put you in touch with the ATF inspector that might cover your business.

Bald Fat Guy · Nov 3, 2014

They know it when they see it.

Inigoes · Nov 3, 2014

You mean 07 SOT?

03's are for C&R...

Once you have a business under your 01 FFL, you only need to pay the tax for the 07.

However, to make post samples: You will need to be in with your local LE agency to get a letter to allow you to make new prototypes.

ericoak · Nov 3, 2014

rmbstyle17 said:
In other words, it is it okay to have a 03 SOT for the purpose of having post 86 mg's?

No

ericoak · Nov 3, 2014

Inigoes said:
You mean 07 SOT?

03's are for C&R...

Once you have a business under your 01 FFL, you only need to pay the tax for the 07.

However, to make post samples: You will need to be in with your local LE agency to get a letter to allow you to make new prototypes.

You sure about that? Manufacturer's make guns all the time before they sell them. Colt doesn't need a letter, they just make it.

I know non manufacture SOT's need law letters though.

Inigoes · Nov 3, 2014

Home » » Faq » National Firearms Act Machine Guns.html
National Firearms Act (NFA) — Machine Guns
1.May an unlicensed person make a machine gun?
2.May machine guns be transferred from one registered owner to another?
3.Does the fact that two licensed manufacturers are wholly-owned by the same parent corporation allow them to transfer post-1986 machineguns between the corporations without either having a Government contract or law enforcement sales demonstration request?

--------------------------------------------------------------------------------

May an unlicensed person make a machine gun?
Generally, no. However, if documentation can be provided, along with the Application to Make a Machinegun, which establishes that the weapon is being made for distribution to a Federal or State agency, an individual may be permitted to make the machine gun.

[18 U.S.C. 922(o)(2), 27 CFR 479.105(e)]

May machine guns be transferred from one registered owner to another?
Yes. If the machine gun was lawfully registered and possessed before May 19, 1986, it may be transferred pursuant to an approved ATF Form 4 (5320.4).

[18 U.S.C. 922(o)(2), 26 U.S.C. 5812]

Does the fact that two licensed manufacturers are wholly-owned by the same parent corporation allow them to transfer post-1986 machineguns between the corporations without either having a Government contract or law enforcement sales demonstration request?
Because the licensed manufacturers are separate legal entities, any NFA firearm would have to be transferred between the entities subject to an ATF-approved application. However, under 27 CFR 479.105(d), a machinegun made or imported on or after May 19, 1986, may only be transferred to the U.S. Government (USG) or a law enforcement agency, or to a Federal firearms licensee for use as a USG or law enforcement sales sample. The transfer of a post-1986 machinegun between licensed manufacturers solely for the performance of a manufacturing sub-process in furtherance of finishing the product, without meeting the requirements of 27 CFR 479.105(d), is not permissible.

To accomplish the sub-process without conducting a transfer of the firearm, an employee of the entity to which the machinegun is registered must accompany the machinegun to the secondary manufacturer’s premises and remain with it, maintaining dominion and control, while the sub-process is being performed. If the sub-process requires more than one day to complete, the registrant may store the firearm overnight at the secondary manufacturer’s premises in a locked container to which only the registrant’s employee has access. In this scenario, no transfer between the primary and secondary manufacturer takes place, and both parties would comply with 18 U.S.C. 922(o).

https://www.atf.gov/firearms/faq/national-firearms-act-machine-guns.html#same-parent-transfer

ericoak · Nov 3, 2014

Inigoes said:
Home » » Faq » National Firearms Act Machine Guns.html
National Firearms Act (NFA) — Machine Guns
1.May an unlicensed person make a machine gun?
2.May machine guns be transferred from one registered owner to another?
3.Does the fact that two licensed manufacturers are wholly-owned by the same parent corporation allow them to transfer post-1986 machineguns between the corporations without either having a Government contract or law enforcement sales demonstration request?

--------------------------------------------------------------------------------

May an unlicensed person make a machine gun?
Generally, no. However, if documentation can be provided, along with the Application to Make a Machinegun, which establishes that the weapon is being made for distribution to a Federal or State agency, an individual may be permitted to make the machine gun.

[18 U.S.C. 922(o)(2), 27 CFR 479.105(e)]

May machine guns be transferred from one registered owner to another?
Yes. If the machine gun was lawfully registered and possessed before May 19, 1986, it may be transferred pursuant to an approved ATF Form 4 (5320.4).

[18 U.S.C. 922(o)(2), 26 U.S.C. 5812]

Does the fact that two licensed manufacturers are wholly-owned by the same parent corporation allow them to transfer post-1986 machineguns between the corporations without either having a Government contract or law enforcement sales demonstration request?
Because the licensed manufacturers are separate legal entities, any NFA firearm would have to be transferred between the entities subject to an ATF-approved application. However, under 27 CFR 479.105(d), a machinegun made or imported on or after May 19, 1986, may only be transferred to the U.S. Government (USG) or a law enforcement agency, or to a Federal firearms licensee for use as a USG or law enforcement sales sample. The transfer of a post-1986 machinegun between licensed manufacturers solely for the performance of a manufacturing sub-process in furtherance of finishing the product, without meeting the requirements of 27 CFR 479.105(d), is not permissible.

To accomplish the sub-process without conducting a transfer of the firearm, an employee of the entity to which the machinegun is registered must accompany the machinegun to the secondary manufacturer’s premises and remain with it, maintaining dominion and control, while the sub-process is being performed. If the sub-process requires more than one day to complete, the registrant may store the firearm overnight at the secondary manufacturer’s premises in a locked container to which only the registrant’s employee has access. In this scenario, no transfer between the primary and secondary manufacturer takes place, and both parties would comply with 18 U.S.C. 922(o).

https://www.atf.gov/firearms/faq/national-firearms-act-machine-guns.html#same-parent-transfer

That doesn't address licensed manufacturer's though. That addressed:
1. Non licensed individuals
2. Addresses transfer of already registered weapon
3. Addresses transfer of already registered weapon

Colt doesn't need a demo letter before they design a new machine gun.

Inigoes · Nov 3, 2014

ericoak said:
Colt doesn't need a demo letter before they design a new machine gun.

Do you know that for sure?

Design as is on on-paper only, noone needs a license or letter for that. Once there is a physical sample, there should be some paper trail on how that was authorized. Especially since Colt, builds MGs for government contracts.

Look at the other thread on how the Navy got in trouble for building suppressors.

ericoak · Nov 3, 2014

Inigoes said:
Do you know that for sure?

Design as is on on-paper only, noone needs a license or letter for that. Once there is a physical sample, there should be some paper trail on how that was authorized. Especially since Colt, builds MGs for government contracts.

Look at the other thread on how the Navy got in trouble for building suppressors.

Huh? For a suppressor, anyone can fill out a form 1, and when it is approved you make the device. You definitely don't need a demo letter. Demo letter isn't the same as a NFA form X.

I don't know about now, but old manufacturer's used to have to register guns they made within a certain amount of time, but they definitely didn't need a demo letter.

MAC went bankrupt and had tens of thousands of machine guns that were made with no buyers lined up. They were legally registered though (some of them). My gun is stamped Power Spring but registered later at the Marietta plant.

Inigoes · Nov 3, 2014

ericoak said:
I don't know about now, but old manufacturer's used to have to register guns they made within a certain amount of time, but they definitely didn't need a demo letter.

I believe that is how things are, if the manufacturer is under an approved government contract.

ericoak · Nov 3, 2014

Inigoes said:
I believe that is how things are, if the manufacturer is under an approved government contract.

So if Colt wants to design a bunch of new machine guns based on new cartridges it either has to be for an approved contract or they need a law letter?

I was under the impression that having the manufacturing SOT was enough, and that you just need to register any new weapons you make. As in Colt just makes the guns and then fills out the Form 1s.

Inigoes · Nov 3, 2014

ericoak said:
So if Colt wants to design a bunch of new machine guns based on new cartridges it either has to be for an approved contract or they need a law letter?

I was under the impression that having the manufacturing SOT was enough, and that you just need to register any new weapons you make. As in Colt just makes the guns and then fills out the Form 1s.

There are always DARPA field tries, that may be how they are getting away it it :shrug:

NateIU10 · Nov 3, 2014

ericoak said:
I was under the impression that having the manufacturing SOT was enough, and that you just need to register any new weapons you make. As in Colt just makes the guns and then fills out the Form 1s.

It's a Form 2, but that is otherwise correct.

ericoak · Nov 3, 2014

NateIU10 said:
It's a Form 2, but that is otherwise correct.

Thanks I thought so.

Oh yea and that is tax exempt correct?

NateIU10 · Nov 3, 2014

ericoak said:
Thanks I thought so.

Oh yea and that is tax exempt correct?

Also correct.

clandestine · Nov 3, 2014

Nate is correct. L.E. Demo Letter not needed.

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