What Are Class 3 (SOT) FFL License Requirements?

If you’re a firearms enthusiast, collector, or someone looking to engage in certain firearm-related businesses, you may have heard of a Class 3 Federal Firearms License (FFL), also known as an SOT (Special Occupational Taxpayer) FFL. This type of FFL allows individuals or entities to deal with certain firearms, including machine guns, suppressors, and destructive devices. In this guide, we’ll delve into the Class 3 (SOT) FFL license requirements, breaking down the process into key components.

1. Understanding Class 3 (SOT) FFL Basics 

Before diving into the requirements, it’s crucial to grasp the basics of Class 3 (SOT) FFLs. These licenses are issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and grant permission to deal in National Firearms Act (NFA) firearms. NFA firearms encompass a range of items, such as fully automatic machine guns, short-barreled rifles and shotguns, suppressors, and destructive devices like grenades.

2. FFL Types and SOT Levels 

The first step in obtaining a Class 3 (SOT) FFL is to acquire a standard FFL, which is a prerequisite for SOT licensing. There are various FFL types (e.g., Type 01, Type 07) that correspond to different firearm-related activities. Once you have the appropriate standard FFL, you can apply for the corresponding SOT level:

  • Class 3 SOT (Dealer in NFA Firearms): Allows the purchase and sale of NFA firearms, including those mentioned earlier.
  • Class 2 SOT (Manufacturer of NFA Firearms): Permits the manufacture and sale of NFA firearms, with certain restrictions and regulations.
  • Class 1 SOT (Importer of NFA Firearms): This level is primarily for businesses involved in importing NFA firearms into the United States.

3. Standard FFL Requirements

Before progressing to the SOT-specific requirements, you must obtain a standard FFL. Here are the fundamental prerequisites for a standard FFL:

  • Eligibility: You must be at least 21 years old for a standard FFL. Certain FFL types may require additional qualifications, such as citizenship.
  • Background Check: You’ll undergo an extensive background check, which includes criminal history, mental health records, and more.
  • Business Premises: You must have a suitable location for conducting firearm-related activities. This typically involves a commercial space, although home-based FFLs may be possible under specific circumstances.
  • Compliance with State and Local Laws: You must adhere to state and local laws and regulations regarding firearm sales and transfers.
  • Secure Storage: Proper storage of firearms is a must, with guidelines on securing firearms from theft or unauthorized access.
  • Business Intent: You need a valid reason for obtaining an FFL, such as firearm dealing, manufacturing, or collecting.

4. SOT (Class 3) FFL Requirements 

Once you’ve acquired a standard FFL, you can proceed to apply for the Class 3 (SOT) FFL level that aligns with your intended activities. Here are the specific requirements for each SOT level:

  • Class 3 SOT (Dealer in NFA Firearms): To obtain this license, you’ll need to establish a legitimate firearm business, such as a gun store. You must also comply with additional regulations related to NFA firearms, including thorough record-keeping and reporting to the ATF. This license permits you to buy and sell NFA firearms, including machine guns, suppressors, and short-barreled rifles.
  • Class 2 SOT (Manufacturer of NFA Firearms): This license allows you to manufacture NFA firearms, provided you adhere to strict ATF guidelines. You must maintain records of your manufacturing activities and submit them to the ATF. Additionally, you can buy, sell, and repair NFA firearms. Manufacturing NFA firearms requires substantial investment and compliance with ATF requirements.
  • Class 1 SOT (Importer of NFA Firearms): Importers dealing with NFA firearms must hold this license. It permits the importation and sale of NFA firearms that meet ATF guidelines. Importers must ensure compliance with international and federal regulations governing the importation of firearms.

5. Compliance, Record-Keeping, and Reporting 

Compliance with ATF regulations is paramount for all SOT licensees. This includes meticulous record-keeping and reporting. Here’s what you need to know:

  • Bound Book: Maintain a bound book that records all transactions involving NFA firearms. This book is subject to ATF inspection.
  • Annual Reporting: Submit annual reports to the ATF detailing your NFA firearms activities.
  • Inspections: Be prepared for periodic inspections by ATF agents to ensure compliance with regulations.
  • Notification: Notify the ATF of certain activities, such as the acquisition and disposition of NFA firearms.

6. Staying Informed and Adapting to Regulations

The regulatory landscape for Class 3 (SOT) FFLs can change over time. Staying informed about updates, legislative changes, and ATF requirements is crucial to maintaining your license. Additionally, networking with others in the firearms industry and seeking legal counsel when necessary can help you navigate the complexities of SOT licensing.

Conclusion: Navigating the Class 3 (SOT) FFL Journey

Obtaining a Class 3 (SOT) FFL is a significant step for individuals or businesses involved in the firearms industry. It grants access to a specialized category of firearms and requires strict compliance with ATF regulations. Understanding the requirements for standard FFLs, choosing the appropriate SOT level, maintaining meticulous records, and staying up-to-date with regulations are essential aspects of this journey. With careful attention to detail and a commitment to compliance, you can successfully navigate the Class 3 (SOT) FFL licensing process and engage in lawful and responsible firearm-related activities.