SOT License Guide [2026] – Everything You Need to Know

An SOT (Special Occupational Taxpayer) is an FFL (Federal Firearms Licensee) that makes or sells NFA firearms (silencers, machine guns, short barreled rifles, etc).

Want the big picture? Start with our NFA guide.

The SOT is a "taxpayer" because they pay a special annual tax in order to deal with a special class of firearms called NFA Firearms.

In this article I'm going to tell you everything you need to know about SOTs - but first, why should you listen to me? Simple, I'm a firearms attorney who has helped thousands get their FFL and become an SOT and I've represented and helped hundreds of FFLs stay out of trouble with the ATF.

SOTs are sometimes (incorrectly) referred to as someone who has a Class 3 License or even an SOT License.

These are incorrect because a Class 3 SOT is a type of taxpayer you can become (not an SOT license to have). The license held by an SOT is an FFL which is one of 9 types of FFL. And, an SOT can be one of three classes of taxpayer - either a Class 1, Class 2, or Class 3.

If this is confusing, don't worry - government bureaucracy is a mess. That's why we offer our Become an SOT course, to make everything simple.

The classes of SOT are:

• Class 1 SOT - Importer of NFA firearms
• Class 2 SOT - Manufacturer of NFA firearms
• Class 3 SOT - Dealer of NFA firearms

Another way the term "Class 3" is often used is when someone is calling an NFA Firearm a "Class 3 Firearm." There is no such thing as a "Class 3 Firearm."

Instead, an NFA Firearm, or a Title II firearm, (more on these below) is imported by a Class 1 SOT, or it is made by a Class 2 SOT. Then, a Class 3 SOT is the dealer that sells it. Therefore, the firearm being sold by the Class 3 SOT came first from a Class 1 or 2 SOT.

We'll take a closer look at each class of SOT below.

SOT License - What is it?

A special Occupational Taxpayer ("SOT") is something that a Federal Firearm License ("FFL") holder becomes to engage in certain business activities with National Firearms Act ("NFA") firearms (also called Title II firearms) like short barreled rifles, silencers, and more.

To better understand what an SOT is, it's helpful to first understand what an FFL is.

Q: What is an FFL? A: 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. However, there's a right and a wrong way to set it up.

SOT Licenses

There is a special class of firearms called NFA firearms (more on that next) that used to come with a special making and transfer tax every time one was made or changed hands. Since January 1, 2026, that tax is $0 for silencers, short barreled rifles, short barreled shotguns, and AOWs. For machine guns and destructive devices, it's still $200 per firearm. (ATF's conforming rule is at 91 FR 25112.)

Here's the part that trips people up: a $0 tax is not the same thing as "no ATF involvement forever." Through most of 2026, people still filed an ATF Form 1 to make one of those items, or an ATF Form 4 to buy/transfer one, and waited for approval and registration. Then, on October 9, 2026, ATF published an open letter (with an accompanying FAQ) saying that, as a matter of enforcement discretion, it will no longer require individuals to get NFA approval or register silencers, SBRs, SBSs, or AOWs before making or transferring them. Filing a Form 1 or Form 4 for those items is now voluntary federally — ATF says it will still accept and process the forms if you want the item registered. Machine guns and destructive devices did not get this treatment: they still need the approved form and the $200 tax.

This is an ATF enforcement policy, not a rewrite of the NFA. ATF itself says it could reverse course. State and local law still matter a lot, and the Gun Control Act still applies (background checks, prohibited persons, dealer recordkeeping, and so on). I break the whole thing down in ATF's NFA non-enforcement letter. This isn't legal advice — check your state's rules (and talk to your own attorney) before you skip a form.

This tax is paid by the maker of the firearm and, when it comes to transfers, the transferee of the NFA firearm (who it's going to). Unless you are an SOT, the tax is paid per firearm.

FFLs who want to make or deal in NFA firearms elect to become an SOT. They pay a once-per-year tax instead, which also lets SOTs make NFA firearms and transfer them between each other without the per item tax.

The once a year tax is only $500 for smaller FFLs and most home-based FFLs.

So why become an SOT now that most NFA taxes are $0 — and Form 1s/Form 4s are voluntary for those items under ATF's current policy? Because the SOT is still what lets an FFL do business in NFA firearms. ATF's October 9 open letter did not touch the special occupational tax: if you want to make or sell silencers, SBRs, SBSs, or AOWs as a business, you still need to be an SOT. Same for machine guns and destructive devices, where the $200 per-item tax still applies and the SOT exemption still saves you money.

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). This is why an NFA item is sometimes referred to as a Title II Firearm.

NFA Firearms are:

• Silencer (or suppressor)
• Full-auto machine gun
• Short Barreled Rifle or SBR (rifles with a barrel less than 16″ or an overall length less than 26″)
• Short Barreled Shotgun or SBS (shotguns with a barrel less than 18″ or an overall length less than 26″)
• Destructive Device (grenades and certain types of ammunition)
• Any Other Weapon or AOW (pen guns, certain special handguns, etc.)

Buying an NFA item used to mean: buy it from an FFL/SOT, file an ATF Form 4, and wait for ATF approval before you took it home. For silencers, short barreled rifles, short barreled shotguns, and AOWs, ATF's October 9, 2026 open letter changed the federal picture — ATF says individuals no longer need prior NFA approval or registration for those items, and a Form 4 is voluntary if you want the item registered. Machine guns and destructive devices still need an approved Form 4 and the $200 tax.

If you're buying from a dealer, the Gun Control Act still applies (think Form 4473 and a NICS check, unless you're exempt). And state law can still require registration even when ATF isn't enforcing the federal form. If you're not sure about your state — or you just want the cleanest paper trail — file the Form 4. It's $0 for those covered items right now. More detail: ATF's NFA non-enforcement letter and Silencer Shop v. ATF.

There are special requirements for owning a machine gun.

Transfer approval times for individuals used to take up to 10 months (or sometimes longer). They're much faster right now (ATF's July 2026 averages were about 9 days for an individual eForm 4 and 33 days for a trust), but transfer times for an SOT are typically only a business day or two. 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.

SOT Classes

There are three available types of SOT called "classes." Each Class of SOT allows different activities with NFA Firearms.

Each SOT class and type of firearms business requires a specific FFL type (see the FFL types chart).

Here's a table showing the SOT class, the purpose of that SOT, and the types of FFLs for each:

Now, let's dive a little more into each SOT class.

Class 1 SOT

A Class 1 SOT is the rarest type - this class of SOT is only for importing NFA Firearms and won't apply to most people getting their FFL.

However, it should help you to remember that there's no such thing as a "Class 3 Firearm" as there's a good chance that the NFA Firearm you're referring to actually started its life in our country through a Class 1 SOT.

This class of SOT receives NFA weapons from another gun dealer or manufacturer on an ATF Form 3 and typically moves them to a non-SOT customer on an ATF Form 4. For silencers, SBRs, SBSs, and AOWs, that Form 4 transfer tax is $0, and under ATF's October 2026 enforcement policy the Form 4 itself is voluntary federally (many dealers and buyers still file one). For machine guns and destructive devices, the customer still needs an approved Form 4 and still pays the $200 transfer tax.

In order to get a post-86 machine gun, a law enforcement demo letter is needed, unless the FFL from where the machine gun is coming is closing their SOT.

Class 2 SOT

A Class 2 SOT is the second most common class of SOT.

In order to manufacture an NFA Firearm, a Type 07 or Type 10 FFL must register as a Class 2 SOT.

The really cool thing about a Class 2 SOT is that it doesn't just allow an FFL to manufacture NFA Firearms, it also allows that FFL to also deal/sell those firearms.

A Class 2 SOT costs $500 per year if the company makes less than $500k a year. If the company makes over $500k a year, then the Class 2 SOT costs $1,000 per year.

Class 2 SOTs can make a machine gun whenever they want (no LE letter needed), however, machine guns are only supposed to be made for potential law enforcement or government sales/use.

Class 3 SOT

A Class 3 SOT is the most common type of SOT and the only type that many people are aware of because this is the Class of SOT that your dealer is from whom you're purchasing an NFA Firearm.

A class 3 SOT may NOT manufacture their own NFA Firearms - they can only purchase them and sell them.

A class 3 SOT costs $500 per year for Type 01 and Type 02 FFLs.