Class III Questions

[taquito971]

I'm a California resident and I work for a company that holds government contracts. A proposed contract involves Class III Full Auto weapons.
If this goes through the corporation would obtain the license.

My question is really centered around obtaining full auto weapons that are not on a form 4.

I'm familiar with the term "Dealer Sample" but my searches have been inadequate and I'm afraid that the dealer sample category may not be what I'm looking for as there would be no LE involvement (other than notification or something along those lines).

Brian

[Nodda Duma]

There are exceptions for work involving government contracts, but I don't know off-hand the details...you may want to contact CA DOJ if no one here can help.

-Jason

[taquito971]

Thanks Jason. I hate calling them...

[freakshow10mm]

I am a Class 2 manufacturer. My company performs conversions and makes fully automatic weapons for government and civilian LE clients. Let me help out a bit.

Post 86 Dealer Sample: Machine guns manufactured after May 19, 1986. In order for these to transfer to SOTs the receiving SOT must have a demo letter from an LE or government agency requesting a demo of the particular weapon. These cannot be owned by civilians under any circumstances. These transfer to the LEA or government agency on a tax free Form 5.

Pre 86 or Pre May Sample: Machine guns imported after the GCA of 1968 banned their importation for civilian ownership, but may be transferred among SOTs without the need for a law letter. Additionally, an SOT may keep them after their SOT status is given up by transferring to themselves on a Form 4.

Fully Transferrable: Machine guns domestically manufactured and registered prior to May 19, 1986. Legal for civilian ownership. Transfers on a tax paid Form 4.

There are 3 classes of SOTs, Special Occupational Taxpayer. Class 1 is an Importer of NFA weapons. Class 2 is a Manufacturer of NFA weapons. Class 3 is a Dealer of NFA weapons.

A Class 1 SOT can import and deal. A Class 2 can manufacturer and deal along with very limited importation, usually for R&D. A Class 3 can only deal.

If your company is merely selling (dealing) NFA weapons they will need a Type 01 FFL ($200), Class 3 SOT ($500), and your state's permits and licensing. The FFL is a 3 year term and the SOT is yearly from July 1 to June 30.

If you company is manufacturing NFA weapons for sale to LE or government agencies, they will need a Type 07 FFL ($150), Class 2 SOT ($1000), and register with the US State Department under the ITAR rules for an additional $2250 yearly.

Dealing will cost you $566 yearly with the federal licensing. Manufacturing will cost you $3300 per year with the federal licensing.

[taquito971]

FreakShow, thanks for the clarification. With those details in mind what kind of license will the company need to obtain and use (not necessarily *dealing*) class III weapons (potentially modifying existing weapons, but not manufacturing new ones) for testing?

I've been thinking that Class 1 is what we need, but actually obtaining the weapons has me a little confused.

Brian

[freakshow10mm]

First off, there is no such thing as a Class 3 weapon. Class 3 is a type of SOT. The weapons you refer to are NFA weapons.

To obtain NFA weapons for testing you need a Class 3 SOT. You cannot make modifications to the weapons unless they are broken. You can fire them, change accessories but the host weapon cannot be changed.

A Class 1 SOT is for importing. That means if you want to buy a machine gun from China and have it shipped to your company directly located in CA, you can. That is what importing is.

The FFL/SOT that would do your company the best would be the 07 FFL and 02 SOT. This is the manufacturer FFL and SOT. You can make them, perform R&D, and repair them if you like. If you are a manufacturer and you have a client that wants a M16 demonstration, make one. Take a semi auto lower, machine out the space between the selector switch to fit the auto sear, install M16 fire control group inside (trigger, hammer, disconnector) and that's it.

If they want a suppressor on it. Make one. No biggie.

The Class 2 manufacturer status gives you the most leeway in the NFA world. There isn't much you can't do.

[freakshow10mm]

but actually obtaining the weapons has me a little confused.

Brian

It's not really hard.

If you are an SOT and you want a newly manufactured machine gun (made after 1986) you will need your government client to give you a letter stating that they want a demo of an M16 machine gun in 5.56x45mm NATO and a SIG 550 machine gun in 5.56x45mm NATO.

Let's say the local FBI agency wants this demonstration.

You will get a letter on FBI letterhead requesting that you (your company) perform a demonstration of these weapons to them so they can test them in preparation for a purchase of one or both of these weapons for their agents' use in official capacity of their duties as federal LE officers.

You call up Machine Guns R Us, a machine gun dealer, and they have a M16 and SIG 550 machine gun in stock. You tell them you have a demo letter for both of them.

Machine Guns R Us takes your demo letter copy, your FFL/SOT and files a Form 3 (tax paid transfer between SOTs) with the ATF. The ATF will approve the transfer in 2-3 months. This will then allow you to take possession of the machine guns from Machine Guns R Us. You do your little demo for the FBI. You can keep these machine guns as long as you have your SOT. You can only sell them to other SOTs the same way you got them or directly to LE/.gov with a purchase order on official letterhead.

Now if you are a manufacturer, it's way easier. Let's say the FBI wants a M16 and a MAC10 machine gun to demo. Take a semi auto AR15 and MAC10 off your shelf, do a bit of drilling and milling and you have machine guns. File a Form 2 (Notice of NFA weapon manufactured) with the ATF (mail or fax it to them). Call the FBI tell them to meet you at the range and blast away.

As a manufacturer you don't need a demo letter to make them. I can wake up, make a machine gun, make a suppressor, file a Form 2 and go back to bed without answering to anyone.

SOTs by nature pay one tax yearly that allows them to make or transfer as many NFA weapons as they want to. Each time a transfer takes place between SOTs, there is no tax due. Each time a transfer takes place between a civilian and an SOT or a civilian and a civilian, there is transfer tax due.

[Nodda Duma]

Sounds like his company may be wanting to do this in CA. How does that change things (I know you may not have the answer, Freakshow).

And does it change if your business is doing this work for the military?

-Jason

[freakshow10mm]

Sounds like his company may be wanting to do this in CA. How does that change things (I know you may not have the answer, Freakshow).

Comply with federal stuff but then I think in CA you need an AW permit then there is a permit for each type of AW; machine gun, suppressor, SBR, SBS, AOW, etc. Don't know about CA stuff though. In Michigan I just have to comply with federal law but I can't make or possess SBR or SBS. Everything else is fair game.

And does it change if your business is doing this work for the military?
-Jason

No, they are a "government agency" being the Department of Defense. When you supply the military, Army, Marines, Air Force, et al, you get a check from the DoD.

[taquito971]

First off, there is no such thing as a Class 3 weapon. Class 3 is a type of SOT. The weapons you refer to are NFA weapons.

I've read that numerous times and I'm going to need to get my terminology right to get the answers I'm going to need for this. Thanks for the nudge in the right direction!

Brian

[taquito971]

It's definetly sounding like the Class 2 manufacturer route is the way to go.

I didn't realize you could keep the weapons after the demo letter had been generated, that helps me understand this a lot better.

The testing is going to be for the Navy, so would that make any difference? I suppose DON letterhead and a letter of intent is just the same.

I wonder if the SBR and SBS configurations will pose any problems...

Lets suppose that we don't have the facility to do the modifying of weapons, what kind of requirements are we looking at for access and control if we subbed that out?

What about movement of weapons across state lines? Are we looking at the same 3 month turnaround? What about movement within the state?

Brian

[Quiet]

What about movement of weapons across state lines?

Certain NFA firearms (DD, MG, SBR & SBS) require approval from the BATFE prior to moving it across state lines.

[ke6guj]

Certain NFA firearms (DD, MG, SBR & SBS) require approval from the BATFE prior to moving it across state lines.

IIRC, an FFL does not need to file a 5320.20 to get permission to transport inventoried NFA items across state lines.

That even applies to a C&R FFL (not in CA) with C&R NFA items. He does not need to file a 5320.20 to take his C&R MG to another state for a fun shoot.

[Quiet]

AFAIK...

Comply with federal stuff but then I think in CA you need an AW permit then there is a permit for each type of AW; machine gun, suppressor, SBR, SBS, AOW, etc. Don't know about CA stuff though.

CA has many requirements to go through prior to being allowed to deal in NFA firearms.

You need to apply for a Dangerous Weapons License/Permit. Fee for application is $321 + live scan fee.
You need to submit an application for every NFA firearm (DD, MG, SBR, SBS) you want to have in your inventory.
You also pay a yearly inspection fee to CA DOJ based off the number of NFA firearms in your inventory. (0-4 = $165, 5-25 = $750, 26+ = $1500).

If you get a Law Enforcement/Military/Government demonstration letter for a NFA firearm, you need to report it to CA DOJ. The report must included the agency requesting and make/model/serial numbers of the NFA firearms being demonstrated.

If you are doing training or research & developement of NFA firearms in CA, you need to report it to CA DOJ. Report must included which agency you are doing R&D for and the make/model/serial numbers of the NFA firearms being tested.

All Assault Weapons, DD, MG, SBR & SBS in your inventory needs to be registered with CA DOJ.

All locations where the NFA firearms are being stored and make/model/year/color/license plate or VIN number of the vehicles being used to transport the NFA firearms in your inventory needs to be registered with the CA DOJ. Storing and transporting NFA firearms in non-registered places/vehicles is grounds for fines/revocation of license/confiscation of NFA firearms.

Good luck with getting CA DOJ approval.

[freakshow10mm]

I didn't realize you could keep the weapons after the demo letter had been generated, that helps me understand this a lot better.

Yes. Once transferred you can keep it as long as you have a valid SOT status. If you give up your SOT, you must destroy or transfer all of your Post 86 machine guns prior to the expiration of your SOT or you are in possession of a restricted machine gun. Felony.

The testing is going to be for the Navy, so would that make any difference? I suppose DON letterhead and a letter of intent is just the same.

Makes no difference. An NFA weapon is an NFA weapon.

I wonder if the SBR and SBS configurations will pose any problems...

They shouldn't.

Lets suppose that we don't have the facility to do the modifying of weapons, what kind of requirements are we looking at for access and control if we subbed that out?

To machine most weapons for full automatic firing capability, a $400 mini mill from Harbor Freight will work. If you have a 3x3 foot workspace, you can modify a semi auto AR15 lower to full auto. AR15, AK47, MAC, Uzi are all stupid easy to modify.

What about movement of weapons across state lines? Are we looking at the same 3 month turnaround? What about movement within the state?

Movement within state: no restrictions for the most part. CA may be different. You or an employee may possess the weapon at any time. Your sales guys can take a weapon, demo it, and bring it back to the licensed premises.

Movement out of state: if you are a dealer or manufacturer there are no restrictions. You do not need ATF permission.

Certain NFA firearms (DD, MG, SBR & SBS) require approval from the BATFE prior to moving it across state lines.

Only for civilian owners. All NFA but AOW and suppressors need permission. If you are an FFL/SOT, you do not need permission to cross state lines with the weapon. Just do it. I take my machine guns and my suppressors into WI when I travel quite often.