MTM Manufacturing Title II Manufacturing of Firearms
Below is some more detailed information about the National Firearms Act of 1934, (NFA) which is the body of federal law that
regulates ownership and transfer of machine guns and silencers etc.
THE NATIONAL FIREARMS ACT OF 1934 (NFA 34 ): This law placed certain classes of firearms into a registered ownership category. Private individuals can possess a functional machine gun, suppressor ( silencer ), short-barreled rifle or shotgun, smooth-bore pistol, cane gun, destructive device (certain shotguns, grenade launchers, hand grenades, bazookas, mortars, cannon, etc..)only after first paying a Federal Transfer Tax of either $5 or $200 per firearm / device. The $5 tax applies to pen guns, cane guns, smoothbore pistols, or any other such firearm that the Bureau of Alcohol, Tobacco and Firearms classifies as "ANY OTHER WEAPON" ( AOW ). All other functional guns or devices in the NFA registry require payment of a $200 federal tax for each private transfer. The is not an annual tax. It only is paid each time a functional NFA firearm is being transferred to or from a private owner ( excepting inheritance ).
THE GUN CONTROL ACT OF 1968 ( GCA 68 ): Largely modeled after the 1938 Gun Control of Nazi Germany, a section of this law updated the 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 the Federal Registry without penalty.
THE GUN OWNERS PROTECTION ACT OF 1986 ( GOPA 86 ): A some what vague statement was added to this bill that has been interpreted by the Bureau of Alcohol, Tobacco and Firearms ( BATF ) and some Federal Courts to mean no machine guns registered after enactment ( May 19, 1986 ) can be built and sold to private individuals. BATF further concluded that 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 NFA firarms. 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 guns cannot be retained by a SOT payer who fail to renew his SOT annually.
THE VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OR 1994 ( VCCLEA 94 ): 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 manfactured 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 follwing features: pistol grip protruding conspicuously beneath the action, telescoping or folding stock, threaded barrel disigned to accommodate a flash suppressor, grenade launcher, bayonet mount. Semiautomatic pistols with detachabable magazines may possess no more than one of the following features : magazine that attches outside the pistol grip, threaded barrel, shrouded, 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, fix magazine capacity over 5 rounds, ability to accept detachable magazines.
PRIVATE TRANSFERS: A private citizen can acquire funtional NFA firearms from private collectionsin his own stste, provided he first pays the applicable NFA transfer tax on each firearm and receives BATF approval. If he is receiving any firearm as part of an inheritance, the tax can be waived but the paperwork first must be approved before receiving the firearm. If the firearm is nonfunctional and registered as a DEWAT ( deactivated war trophy ), the tax is not due but the federal paperwork still must be filed and approved before taking receipt of the NFA firearm.
GOVERNMENT AGENCY TRANSFERS: There are federal prohibitions on any type of government entity acquiring most NFA firearms, including many destructive devices. Some states prohibit law enforcement agencies from possessing certain types of NFA firearms or destuctive devices. Government agencies are exempt from paying Federal Transfer Tax 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 agencies, including law enforcement agencies, must first be approved by BATF.
SOT DEALER TRANSFERS: The SOT ( Special Occupational Tax ) is an annual fee paid to the U.S. Treasury Depatment by dealers, manufacturers, or importers of certain products including alcohol, tobacco, and firearms. In the case of firearms, the SOT is broken down between 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 dealining in NFA firearms. SOT payers have the advantage of being able to transfer functional NFA firearms to or from other SOT payers and government agencies, with BATF approval, but without having to pay a transfer tax. 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 BATF approvel. SOT payers can transfer certain functional NFA firearms to in-state residents and to both in-state and out-state reular gun dealers, but only after they have paid the appropriate transfer tax and receivied approval from BATF
REGULAR GUN DEALER TRANFERS: Regular gun dealers or manufacturers who do not have SOT's, still can acquire functional NFA firearms from in-state or out-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 be paid on each NFA firearms ordered. Once this paperwork is approved and they have recevied shipment, transfers can then be conducted with private individuals in-state, or dealers either in-state or out-of-state. These transfers also require payment of the tax and BATF approval before they can be completed.
HOW TO PAY THE TAX: If you are acuiring an NFA firearm from a SOT payer, they 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, form s can be acquired from the Bureau of Alcohol, Tobacco and Firearms ( BATF ), 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 two forms that are completed in duplicate (ATF form 4 and fingerprint card ). The front of the ATF form 4 are filled and signed by the seller ( see exceptions for SOT payers and corporations below ). On the back of the form 4 are placed recent photographs of the purchaser. The purchaser also signs the block under his photograph. The bottom backside of the forms are endorsed by the purchaser's sheriff, chief judge, police chief, etc.. The second set of forms are FBI fingerprint cards. While the form 4s are being endorsed, ask to be fingerprinted using the cards supplied by BATF. Both the person fingerprinted and the person taking them sign these forms. The seller then mails the paperwork and check for the transfer tax to BATF. On the average it takes about 90 days for approval. 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 there firearm from then on. NO Further tax is due.
CORPORATE OWNERSHIP: In some areas it is difficult to get a law enforement signature on the ATF form 4. To circumvent this problem, some people purchase the gun through a corporation. If you are a SOT payer acquiring a firearm from a private source, or if you are a private individual who is incorporated or is a senior officer in a corporation, you can acquire an NFA firearm on an ATF form 4 without the need for a law enforcement endorsement, photograph, or a fingerprint card. You still must pay the Federal Transfer Tax. If the gun is transferred to a corporation, it must be retained by the corporation until it is dissolved. AT such time the gun must be sold on a tax paid transfer, retitled to someone on a tax paid transfer, or surrendered to the BATF.
TRAVEL AND USE: Do not take NFA firearms out of state without first checking with BATF. For machine guns, short barrel rifles, and short barrel shotguns, you will need prior approval from BATF on a form 5320.20 to travel interstate or to permanently move NFA firearms to another state. THis protects you from accidentally going some place where they are banned. If the state you are traveling to allows possession of the type of NFA firearm you owen, 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 travel status you are afforded the same protection as any other gun owner under the GOPA 86 law. You cannot be legally arrested for simply passing through a stste, county, or a 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: NFA firearms may be left for repair with an authorized person ( dealer, gunsmith, manufacturer ) with out filing any federal paperwork ( check your state and local laws for any restrictions ). BATF ADVISES owners to first file a form 5 before doing this. The form 5 was designed for the purposes of inheritance, government acquisiton, or to transfer a deactived firearm. It looks very similar to the form 4, the main difference being that no tax is paid. However, law enforcement endorsements and fingerprint cards are required ( unless waived by BATF ). 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 repair won't take 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 judgement.
TRANSFERABLE FIREARMS: NFA firearms that can be transfered to private citizens on a form 4 are the most desirable, and therefore most expensive ones to acquire. They are often referred to as "FULL 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 GCA 68.
Deactivated war trophies ( DEWAT )that were registered prior to enactment of the GCA 68 . DEWATs can be reativated after payment of the $200 Federal Transfer Tax and approval by BATF.
Domestically manufactured or remanufactured guns that were registered after the GCA 68 enactment, but prior to the GOPA 86 ( May 19,1986 ). This includes registered receivers, sears, bolts, or other parts accepted by BATF.
Imported guns that were remanufactured into machine guns prior to the GOPA ( May 19,1986 ). This includes registered receivers, sears, bolts, or other parts acceptrd by BATF.
CURIOS AND RELICS: Some states allow private ownership of machine guns only if they are listed as Curios and Relics by the Federal Government. Examples would include original Thompson 1921 or 1928 submachine guns, early production M16 rifles. The Curios and Relics list is periodically updated and you can petition for a 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 and Relic license ( FFL ) can purchase these guns out of state, with prior payment of the applicable transfer tax and approval by BATF.
PRE-MAY DEALER SAMPLE: Machine guns imported after 1968 and prior to May 19,1986, are trasferable to FFL dealers ( 01 ) and manufacturers ( 07 ) who may have paid the Special Occupational Tax ( SOT ) for the current year. A dealer who acquires a pre-May dealer sample 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 a 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 SOT payers only if they first provide a letter on a gency letterhead showing that a legitimate government organization has requested to see it. This ususally 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, BATF 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.
