NFA Class 3 Dealer Question

[whitelevelboy1997]

If a class 3 nfa dealer were to purchase an inventory of full auto pre-86 weapons and his class 3 ffl/sot were to be discontinued by him would he be able to retain his pre-86 weapons or would he have to sell all of them, destroy them, or turn them in to the batfe.

 

[RhinoDefense]

Legally, depends if they are dealer samples or fully transferable. In either case, transfer tax is due.

Your username indicates you are 15. The ATF doesn't mess with this stuff. They have no sense of humor. Obtaining an FFL/SOT for the purpose of enhancing your personal collection is illegal and you will be in a position you do not want to be.

 

[Walther P99]

... and you will be in a position you do not want to be.

Literally, as your cellmates would demonstrate..

Seriously though, like Rhino said, result would be long prison time and large fines to boot.

 

[Bubbles]

http://www.atf.gov/publications/download/p/atf-p-5320-8/atf-p-5320-8-chapter-14.pdf

Read chapters 14.2 and 14.3.

 

[Ian]

If the guns were fully transferable, the dealer can keep them when his license expires. If they are dealer sample guns, it depends on when they were registered. There are pre-May samples that can be kept after the license expires (but only transferred to dealers thereafter) and post-May samples that must be transferred away or surrendered if the license expires.

 

[AlexanderA]

I might add that a transfer tax is not due if a Class 3 dealer keeps inventory weapons upon going out of business. (That applies to transferables and pre-May 1986 samples.)

 

[Jim K]

It is not worth looking up, but I am not sure of that; I knew a dealer who ran into that situation and he told me he had to get the same Form 4 and pay the tax as if he had sold the guns to anyone else; they told him to transfer or sell his inventory before he ceased business, and they said that if he bought all or some of the guns, it would be just like selling them to anyone else. BATFE told him the transfer was from a "dealer" entity to an "individual" entity. His business was incorporated, so maybe it was different from an individual having an Class 3 SOT.

Jim

 

[AlexanderA]

Jim K wrote:

It is not worth looking up, but I am not sure of that; I knew a dealer who ran into that situation and he told me he had to get the same Form 4 and pay the tax as if he had sold the guns to anyone else; they told him to transfer or sell his inventory before he ceased business, and they said that if he bought all or some of the guns, it would be just like selling them to anyone else. BATFE told him the transfer was from a "dealer" entity to an "individual" entity. His business was incorporated, so maybe it was different from an individual having an Class 3 SOT.

Yes, that would be correct if the inventory was in the name of a corporation and he was keeping the guns as an individual. There's clearly a "transfer" of ownership taking place, and that's a taxable event. What I wrote originally was based on my own personal experience when I discontinued my FFL and SOT. Since only a sole proprietorship was involved, there was no "transfer" and I got to keep my remaining inventory of MG's with no tax and no Form 4 being required. This is the longstanding policy of the ATF. (Post-samples have to be transferred to another dealer with a LE letter.)

 

[medalguy]

That's correct. I was an SOT for a number of years, with my license in my individual name. When I declined to renew it, the guns were already registered in my personal name, and I kept several. I still have most of them.

 

[gixxergreg]

I've tried searching but came up empty... Can I, as a SOT holder, take a machine gun in on trade from a police agency? Or do I need a law letter to accept it/them?

Sorry for hijacking your thread with my first post

 

[Bubbles]

Can I, as a SOT holder, take a machine gun in on trade from a police agency? Or do I need a law letter to accept it/them?

If it is a transferable then no letter is needed.
If it is a pre-sample then no letter is needed.
If it is a post-sample then you need the demo letter.

 

[gixxergreg]

Thank you