If you're "manufacturing" (chopping) this yourself, the tax is $200 either way. The $5 AOW tax is only for transferring possession of an existing AOW. Manufacturing taxes are $200 across the board.
Also, you can only turn it into an AOW if the gun was shipped from the factory with a pistol grip installed, and if it was declared as a pistol on the original 4473, and every 4473 thereafter. I.e., it had to be shipped in a "pistol" configuration, and been declared a "pistol." That means you're not going to be able to buy a used one, since no one declares 'em as pistols unless they're chopping them shortly thereafter.
The only way to save money for an AOW is to give it to a Class II (not 3) dealer and have them chop it for you, and register it as an AOW themselves tax-free, then transfer it back to you for the $5 tax. But then you pay a transfer fee (about $100 usually) plus labor for chopping the barrel.
The main benefit to owning an AOW instead of an SBS is that it can be transported over state lines at will. With an SBS, you need to file some forms first.
Oh, yeah, don't forget you need engraving. The receiver must be engraved with your name (or the name of your trust or corporation, if going that route) and your city and state of residence (or incorporation). I highly recommend having this stuff engraved
before the paperwork comes back. While it's still a regular shotgun, you can leave it at the engraver's no problem. A registered Title II firearm (which is what it becomes the instant you get that paperwork back) cannot be possessed by anyone but you. So if you wait too long, you'd need an engraver that's willing to do the work immediately, while you stand over the guy's shoulder watching, so that the gun never actually leaves your possession. Federal felonies all around if you leave an NFA weapon unattended.
I guess with an AOW, I wouldn't get to have anything but a pistol grip, but with a SBS, I could go either way?
And yes, that's correct.
