Q: What is an SOT?
A: An SOT is a Special Occupational Taxpayer. It is a Federal Firearms Licensee who pays a special annual tax in order to deal with a special class of firearms.
SOTs are sometimes (incorrectly) referred to as someone who has a Class 3 License.
What is an SOT?
Before we answer that more fully, let’s first explore what an FFL is.
An FFL, or Federal Firearms License holder, is a person or entity engaged in the business of making and/or selling firearms. FFLs are gun dealers or firearm manufacturers. The process to become an FFL is fairly straight forward (once you know the rules).
There is a special class of firearms called NFA firearms (more on that next) that incur a special making and transfer tax each time the NFA firearm is made or changes possession.
This tax is paid by the transferee of the NFA firearm (who it’s going to) per firearm. FFLs, in order to avoid the per item tax and also to have special permission to make them, sometimes elect to become an SOT in order to pay a once-per-year tax that exempts them from the per item tax.
What are NFA Firearms?
NFA Firearms are guns (silencers are legally considered to be firearms) that are regulated under the National Firearms Act of 1934.
NFA Firearms are also sometimes referred to as Title II firearms because the National Firearms Act is considered to be Title II of federal gun laws (The Gun Control Act of 1968 is Title I – even though it came about later).
NFA Firearms are:
- Full-auto machine guns
- Short Barreled Rifles (rifles with a barrel less than 16″ or an overall length less than 26″)
- Short Barreled Shotguns (shotguns with a barrel less than 18″ or an overall length less than 26″)
- Destructive Devices
- Any Other Weapons (pen guns, certain special handguns, etc.)
In order to purchase an NFA firearm, an individual must purchase the firearm from an FFL/SOT and then apply for the transfer with the ATF.
There are special requirements for owning machine guns.
Transfer approval times for individuals take up to 10 months (or sometimes longer). This is just one of the reasons we like having an FFL and an SOT – SOTs can get NFA firearms in a matter of days.
How do I Become an SOT?
First, you need to get your FFL. Then, you can register as an SOT.