Class 3 Ownership

Ownership of NFA or “Class III” firearms.

There is much misunderstanding about Class 3 ownership of firearms regulated by federal legislation. Under federal law, machine guns, suppressors, short-barreled shotguns(“sawed-off” shotguns, or abbreviated here, SBS), short-barreled rifles (abbreviated SBR) and destructive devices (e.g. mortars, howitzers, grenade launchers, etc) have NEVER been illegal for Americans to own. They are, however, heavily regulated and taxed.

Although some STATES do not allow certain NFA firearms, under federal law they are legal. Regulation of firearms subject to the NFA are under the supervision of the Bureau of Alcohol, Tobacco, Firearms and Explosives, or BATFE.

Class 3 Taxes

All machine guns, suppressors, SBR and SBS not in the possession of the United States government must be registered. The firearm must be registered (entered into a database maintained by the BATFE) and a ONE-TIME $200.00 federal excise tax must be paid to BATFE only when the weapon is transferred to a different owner. This tax is not an “annual” tax, it is simply an excise, or “sales” tax. If the weapon is re-sold two months or twenty years later, there is still only the one time $200.00 excise tax at the time of each sale. There is no “license” one must possess from the federal government to possess NFA weapons.

How to Own NFA Firearms

The two ways to go about owning NFA firearms are via individual registration or registration to a registered, legal  entity. In the case of the applicant (buyer) being an individual, he/she submits a federal registration form including fingerprints, photographs and a signature from their chief law-enforcement officer to the BATFE along with the $200.00 excise tax, and after a criminal background check and final approval, then and only then can the firearm be transferred from the seller to the buyer.  If a law enforcement signature cannot be obtained, one may register the NFA firearm to a registered entity.
For information on registration and transfers to an entity such as a corporation, L.L.C., P.A., trust, etc, please contact us.  We can refer to appropriate legal counsel.

Another question that comes up is, “why are machine guns so ridiculously expensive?”. The reasons date back to May 19th, 1986.

A History of Machine Guns in the U.S.A.

For decades machine guns were manufactured and bought and sold to individuals, the U.S. military, government and law enforcement agencies. Once again, if the firearms were LEGALLY produced and transferred to civilians they were registered. This all continued until May 19th, 1986. On that date a new federal law became effective that mandated a machine gun, in order to be able to be transferred between civilians, must have been BUILT and REGISTERED by that date. In other words, no machine gun built on May 19th or subsequently can be owned by a non-government entity.

The Economics of Class 3 Gun Ownership

So, you get the picture. A fixed supply, an increasing demand, thus the upward price pressure, since there are literally, by federal mandate, no additional machine guns able to be added to the registry of machine guns maintained by BATFE. This means you could find an unfired, mint condition machine gun brought back from Germany by your grandfather in his duffle bag at the end of World War II, however, if it wasn’t REGISTERED by May 19th, 1986, you are in illegal possession of a machine gun. So, it is quite easy to understand that if the existing pool of guns is fixed by federal law, as long as people are willing to pay ever-increasing prices for these rare items, the price will continue to rise. (it should be noted that SBS, SBR and suppressors are not in a limited supply, and are thus much more reasonably priced)