AR15.Com Archives
 as an 07/02 SOT can I just build a machine gun? What process do I go through?
TZLVredmist  [Member]
6/13/2009 11:37:32 PM
Our company has our interview with the ATF for our FFL in a couple days and we are getting our 02 SOT right after that. I am having a hard time finding information on the process on building firearms. S it as simple as building the gun ad calling the ATF with a SN Number, or how does this process work?


We would like to start off building a supressor host so we can do some full auto rated testing...


Any forums on the internet for SOTs?
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yarbsea  [Member]
6/14/2009 12:34:14 AM


This sounds like a joke.

On a completely unrelated note, I just got licensed to build cars....does anyone happen to know how many wheels a car has?





No offense, but If anybody can get this license, and then ASK afterwards how it works,....I may get one myself and make machine guns in my garage...
TZLVredmist  [Member]
6/14/2009 2:49:25 AM
So you can tell me what DOT standards are for wheels, and how a person would go about testing to those standards?


Check your attitude at the door please.





Anyone else who is willing to fill me in a little bit, I would be thankful! We are excited to start this company off, and are doing it as a business, and to persue a passion for firearms. No this is not a joke, and we hope to bring some great products to all those who love shooting. This is a beginning for me and I must start someplace. I figured the Class 3 section of one of my favorite forums would be a good start.

Thanks in advance!
leonpiper69  [Member]
6/14/2009 3:05:43 AM
im interested in this topic as well. and i think its a valid question, you have to start somewhere. i myself was thinking about looking into getting a mfg license (next year maybe) so i could possibly do some r&d for some ideas i have. and the ideas i have would be easer to work with if i had a few f/a weapons to start with. and since what im talking about wouldnt be for ownership purposes (not long term) then why spend 15 k for example on a rr when i could just build one for testing purposes?
ProfGAB101  [Team Member]
6/14/2009 3:13:19 AM
Getting a Firearms license is not rocket science - be it dealer or manufacture.

Adding SOT (Special Occupational Tax) status options are just that - a matter of filling out the proper forms and paying the tax.

Its almost like opening a corner store and getting a beer license - same occupational tax form even.

But don't be a potential darwin award winner - do the homework to know how to stay 100% legit. - If they still print the "Machine gun dealers bible" get one, read it thru cover to cover about 4x before you fill out any SOT paperwork.

Ignorance is no defense in court. The ATF loves fools it can serve up on the 6 o'clock news. Don't be a fool.
ragedracer1977  [Team Member]
6/14/2009 5:17:11 AM
Not an FFL, but have several close friends who are manufacturers, in other words - don't take my word for it.

Yes, you can build any MG you want. You just have to notify the ATF via Form 2 when you do. You only need a "love letter" if you want to buy a MG from another dealer.
TZLVredmist  [Member]
6/14/2009 10:34:08 AM
So is the form two faxed it? or do they figure that "Within 24 hours" Of postmarked mailed item?

Sounds real simple so far, almost silly simple! As long as my bound book is kept then I am good to go...
ragedracer1977  [Team Member]
6/14/2009 12:36:25 PM

Originally Posted By TZLVredmist:
So is the form two faxed it? or do they figure that "Within 24 hours" Of postmarked mailed item?

Sounds real simple so far, almost silly simple! As long as my bound book is kept then I am good to go...

From what I understand, you may fax it in, and follow up by mail.
CleverNickname  [Team Member]
6/14/2009 12:46:31 PM
Buy this book
tony_k  [Moderator]
6/14/2009 1:22:25 PM
Originally Posted By CleverNickname:
Buy this book

+1.

It is the bible for NFA dealers, manufacturers, importers and exporters.
TZLVredmist  [Member]
6/14/2009 3:00:03 PM
Roger that folks! I will stalk an issue and purchase it!


Thanks!
tony_k  [Moderator]
6/14/2009 9:31:52 PM
Originally Posted By TZLVredmist:
Roger that folks! I will stalk an issue and purchase it!


Thanks!

Good.

The MGDB will save your butt many times over. It gots into great, precise detail over how to conduct business as an 07/02 FFL/SOT, and covers almost every question you could come up with.

For anything not covered in the MGDB, try the forums over at subguns.com –– it's the closest thing to an "SOT" forum out there. Unfortunately, there are a few folks who post there who are either impostors or idiots, so you can't take everything at face value. Though if you hang there for awhile, you soon learn who is an RKI and who is blowing smoke.

To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item. Upon completion to the 80% level, they must notify BATFE within 48 hours (more precisely, by the close of business on the day following 80%+ manufacture) via a Form 2. And yes, the Form 2 may be faxed in, though for a beginning 07/02, it is important to contact BATFE's SOT Specialist, Amy Stely, beforehand by phone to lay the groundwork and let her know the fax will be incoming.

HTH.
Bubbles  [Team Member]
6/15/2009 7:33:02 AM
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.
tony_k  [Moderator]
6/15/2009 10:54:12 AM
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.
CAR-AR-M16  [Team Member]
6/15/2009 11:37:24 AM
Originally Posted By tony_k:
[
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item. Upon completion to the 80% level, they must notify BATFE within 48 hours (more precisely, by the close of business on the day following 80%+ manufacture) via a Form 2. And yes, the Form 2 may be faxed in, though for a beginning 07/02, it is important to contact BATFE's SOT Specialist, Amy Stely, beforehand by phone to lay the groundwork and let her know the fax will be incoming.

HTH.


tony_k, What is the annual cost for an 07/02? I assume you have the FFL fee, SOT fee, ITAR fee and ???????

tony_k  [Moderator]
6/15/2009 4:31:38 PM
Originally Posted By CAR-AR-M16:
Originally Posted By tony_k:
[
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item. Upon completion to the 80% level, they must notify BATFE within 48 hours (more precisely, by the close of business on the day following 80%+ manufacture) via a Form 2. And yes, the Form 2 may be faxed in, though for a beginning 07/02, it is important to contact BATFE's SOT Specialist, Amy Stely, beforehand by phone to lay the groundwork and let her know the fax will be incoming.

HTH.


tony_k, What is the annual cost for an 07/02? I assume you have the FFL fee, SOT fee, ITAR fee and ???????


Type 07 FFL = $50/year
Class 2 SOT = $500/year
ITAR = $2,250/year
(Making your own machine guns = priceless.)

So the total in federal fees is $2,800 per year. Any state business fees, of course, are on top of that.

ProfGAB101  [Team Member]
6/16/2009 4:29:30 AM
Originally Posted By tony_k:
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.


Want to be really picky about how bizarre NFA regs can be... the type 07 CAN make M203 and/or M79 receivers because until assembled ( or group of parts are at the same location ) it is a tittle I firearm with no caliber. The 07 could then complete a firearm on a form 1 for his personal use (not resale). Bare receivers could be sold to folks to do there own Form I builds - but Darwin logic says you had really better know the customer intends to do a buy the book (form 1) before you would sell a receiver.

( 11th Commandment for NFA - Thou shalt Cover Your Ass at all times! )
bradb  [Team Member]
6/17/2009 8:17:34 PM
Originally Posted By tony_k:
Originally Posted By CAR-AR-M16:
Originally Posted By tony_k:
[
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item. Upon completion to the 80% level, they must notify BATFE within 48 hours (more precisely, by the close of business on the day following 80%+ manufacture) via a Form 2. And yes, the Form 2 may be faxed in, though for a beginning 07/02, it is important to contact BATFE's SOT Specialist, Amy Stely, beforehand by phone to lay the groundwork and let her know the fax will be incoming.

HTH.


tony_k, What is the annual cost for an 07/02? I assume you have the FFL fee, SOT fee, ITAR fee and ???????


Type 07 FFL = $50/year
Class 2 SOT = $500/year
ITAR = $2,250/year
(Making your own machine guns = priceless.)

So the total in federal fees is $2,800 per year. Any state business fees, of course, are on top of that.



$1000/year if over $500K in sales
Shizzlemah  [Member]
6/17/2009 9:17:08 PM
Originally Posted By ProfGAB101:
Originally Posted By tony_k:
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.


Want to be really picky about how bizarre NFA regs can be... the type 07 CAN make M203 and/or M79 receivers because until assembled ( or group of parts are at the same location ) it is a tittle I firearm with no caliber. The 07 could then complete a firearm on a form 1 for his personal use (not resale). Bare receivers could be sold to folks to do there own Form I builds - but Darwin logic says you had really better know the customer intends to do a buy the book (form 1) before you would sell a receiver.

( 11th Commandment for NFA - Thou shalt Cover Your Ass at all times! )


Just curious, couldn't an 07/02 build the M79 (in the above example) for the shop / for resale on a form 1 ? If the SOT covers non-DD, then the $200 form 1 should cover the DD regardless of whom owns it, be it the personal or company?
phreaky  [Member]
6/18/2009 10:00:43 AM
Originally Posted By tony_k:
Originally Posted By CleverNickname:
Buy this book

+1.

It is the bible for NFA dealers, manufacturers, importers and exporters.


Where can this book be bought. Everyplace that has it says no copies available, no longer in production...
RyJones  [Team Member]
6/18/2009 12:30:31 PM
if you want to make a DD as an 02/07, I'm fairly sure you pay the same making tax on a form 1 as anyone else.
CleverNickname  [Team Member]
6/20/2009 6:31:35 PM
Originally Posted By phreaky:
Where can this book be bought. Everyplace that has it says no copies available, no longer in production...


Try Small Arms Review.
ProfGAB101  [Team Member]
6/27/2009 2:04:51 PM
Originally Posted By Shizzlemah:
Originally Posted By ProfGAB101:
Originally Posted By tony_k:
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.


Want to be really picky about how bizarre NFA regs can be... the type 07 CAN make M203 and/or M79 receivers because until assembled ( or group of parts are at the same location ) it is a tittle I firearm with no caliber. The 07 could then complete a firearm on a form 1 for his personal use (not resale). Bare receivers could be sold to folks to do there own Form I builds - but Darwin logic says you had really better know the customer intends to do a buy the book (form 1) before you would sell a receiver.

( 11th Commandment for NFA - Thou shalt Cover Your Ass at all times! )


Just curious, couldn't an 07/02 build the M79 (in the above example) for the shop / for resale on a form 1 ? If the SOT covers non-DD, then the $200 form 1 should cover the DD regardless of whom owns it, be it the personal or company?


The 07 (even without any SOT status) would have the following engraved on the receiver, business name, Model description, city, state and serial no. when the receiver is made.

Then once a forum 1 is approved he would have to add additional engraving - His personal name, residence address and in some cases an additional ATF ID/serial no.

Not pretty.

Also - prolly the second time he tried to sell a completed form 1 item he built - ATF would decide that he is now in the business of producing DD's and would require appropriate SOT be paid... Time to pony up the big bucks.
VarmitSniper  [Industry Partner]
6/27/2009 2:15:37 PM
Originally Posted By ProfGAB101:
Originally Posted By Shizzlemah:
Originally Posted By ProfGAB101:
Originally Posted By tony_k:
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.


Want to be really picky about how bizarre NFA regs can be... the type 07 CAN make M203 and/or M79 receivers because until assembled ( or group of parts are at the same location ) it is a tittle I firearm with no caliber. The 07 could then complete a firearm on a form 1 for his personal use (not resale). Bare receivers could be sold to folks to do there own Form I builds - but Darwin logic says you had really better know the customer intends to do a buy the book (form 1) before you would sell a receiver.

( 11th Commandment for NFA - Thou shalt Cover Your Ass at all times! )


Just curious, couldn't an 07/02 build the M79 (in the above example) for the shop / for resale on a form 1 ? If the SOT covers non-DD, then the $200 form 1 should cover the DD regardless of whom owns it, be it the personal or company?


The 07 (even without any SOT status) would have the following engraved on the receiver, business name, Model description, city, state and serial no. when the receiver is made.

Then once a forum 1 is approved he would have to add additional engraving - His personal name, residence address and in some cases an additional ATF ID/serial no.

Not pretty.

Also - prolly the second time he tried to sell a completed form 1 item he built - ATF would decide that he is now in the business of producing DD's and would require appropriate SOT be paid... Time to pony up the big bucks.




A form one to build a machine gun will not be approved even if you have an 07 FFL , unless it is being built for a Government agency.

You must have an 07 with the SOT to build a Machine Gun...

It would be registered on a form 2


An 07 FFL even with the SOT does not make you eligble to make DD's that is a different license..

An 07 FFL can form 1 a DD for himself.


Shizzlemah  [Member]
6/27/2009 6:24:59 PM
Originally Posted By ProfGAB101:
Originally Posted By Shizzlemah:
Originally Posted By ProfGAB101:
Originally Posted By tony_k:
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.


Want to be really picky about how bizarre NFA regs can be... the type 07 CAN make M203 and/or M79 receivers because until assembled ( or group of parts are at the same location ) it is a tittle I firearm with no caliber. The 07 could then complete a firearm on a form 1 for his personal use (not resale). Bare receivers could be sold to folks to do there own Form I builds - but Darwin logic says you had really better know the customer intends to do a buy the book (form 1) before you would sell a receiver.

( 11th Commandment for NFA - Thou shalt Cover Your Ass at all times! )


Just curious, couldn't an 07/02 build the M79 (in the above example) for the shop / for resale on a form 1 ? If the SOT covers non-DD, then the $200 form 1 should cover the DD regardless of whom owns it, be it the personal or company?



The 07 (even without any SOT status) would have the following engraved on the receiver, business name, Model description, city, state and serial no. when the receiver is made.

Then once a forum 1 is approved he would have to add additional engraving - His personal name, residence address and in some cases an additional ATF ID/serial no.

Not pretty.

Also - prolly the second time he tried to sell a completed form 1 item he built - ATF would decide that he is now in the business of producing DD's and would require appropriate SOT be paid... Time to pony up the big bucks.


No I think you missed it.

Lets say my name is Fred and I own Big Guns LLC (07/02).

Big Guns LLC makes a M79 receiver. (just a receiver, not a DD yet) and the receiver is engraved Big Guns LLC.
Big Guns LLC now files the Form1 to make a dd.
Form 1 is approved, and Big Guns LLC assembles the DD. No engraving needed - since it is already there.

That should not be a problem. I don't need to PERSONALLY submit the form 1, and engrave "Fred" on the side. The LLC (or FFL, SOT, etc) can file the form 1.

If you are not aFFL but not a DD dealer, you can buy and sell all the DDs you want as long as you transfer them on form 4s not form 1s. You don't even have to be a SOT for this, because a form 4 is a "tax paid" transfer.

If you aren't a DD dealer and try doing them on form 3s, you may get some heat eventually.

aggiez28  [Member]
6/29/2009 2:10:48 PM
Originally Posted By Shizzlemah:
Originally Posted By ProfGAB101:
Originally Posted By Shizzlemah:
Originally Posted By ProfGAB101:
Originally Posted By tony_k:
Originally Posted By Bubbles:
Originally Posted By tony_k:
To answer your original question, yes, a Type 07 FFL/Class 02 SOT may legally manufacture any NFA item.


Ah, not quite. A Type 07 FFL may not manufacture destructive devices. That requires a Type 10 FFL.

Picky, picky, picky ... but you're right.


Want to be really picky about how bizarre NFA regs can be... the type 07 CAN make M203 and/or M79 receivers because until assembled ( or group of parts are at the same location ) it is a tittle I firearm with no caliber. The 07 could then complete a firearm on a form 1 for his personal use (not resale). Bare receivers could be sold to folks to do there own Form I builds - but Darwin logic says you had really better know the customer intends to do a buy the book (form 1) before you would sell a receiver.

( 11th Commandment for NFA - Thou shalt Cover Your Ass at all times! )


Just curious, couldn't an 07/02 build the M79 (in the above example) for the shop / for resale on a form 1 ? If the SOT covers non-DD, then the $200 form 1 should cover the DD regardless of whom owns it, be it the personal or company?



The 07 (even without any SOT status) would have the following engraved on the receiver, business name, Model description, city, state and serial no. when the receiver is made.

Then once a forum 1 is approved he would have to add additional engraving - His personal name, residence address and in some cases an additional ATF ID/serial no.

Not pretty.

Also - prolly the second time he tried to sell a completed form 1 item he built - ATF would decide that he is now in the business of producing DD's and would require appropriate SOT be paid... Time to pony up the big bucks.


No I think you missed it.

Lets say my name is Fred and I own Big Guns LLC (07/02).

Big Guns LLC makes a M79 receiver. (just a receiver, not a DD yet) and the receiver is engraved Big Guns LLC.
Big Guns LLC now files the Form1 to make a dd.
Form 1 is approved, and Big Guns LLC assembles the DD. No engraving needed - since it is already there.

That should not be a problem. I don't need to PERSONALLY submit the form 1, and engrave "Fred" on the side. The LLC (or FFL, SOT, etc) can file the form 1.


If you are not aFFL but not a DD dealer, you can buy and sell all the DDs you want as long as you transfer them on form 4s not form 1s. You don't even have to be a SOT for this, because a form 4 is a "tax paid" transfer.

If you aren't a DD dealer and try doing them on form 3s, you may get some heat eventually.


that sounds OK. he can make it but he can not manufacture it.
I am not aware of any issues with an FFL holder making things on a form 1 but it may be somthgin you want to look into further.

ProfGAB101  [Team Member]
6/29/2009 9:56:43 PM
That may be correct that additional engraving would not be required if the 07 FFL is a Corp - BUT as a Sol proprietor I was required to add my name, or thats what I was instructed by BATF to do at the time. ( wait a minute and the answers change, I know...)

As to Machine gun receivers... I ONLY addressed the strange circumstances of a DD receiver.
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