A SOT license, also known as a Special Occupational Taxpayer license, is a crucial permit for individuals or companies involved in specific firearms-related operations. Obtained through the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), this license is a must-have for anyone looking to engage in the firearms industry.
In this article, we dive into the world of SOT licenses, exploring what they entail and how to get a Special Occupational Taxpayer license. Whether you’re a firearms dealer, manufacturer, or importer, this comprehensive guide will provide you with a clear understanding of the SOT license process and ensure you stay in compliance with federal regulations.
What is a SOT License? Special Occupational Taxpayer License Types
What is a SOT license? The SOT (Special Occupational Taxpayer) license is a necessary permit for those in the firearms industry, but it’s not a one-size-fits-all solution. In fact, there are three different types of SOT licenses to choose from, each tailored to a specific purpose within the firearms industry.
The Class 1 SOT License allows for the importation of NFA items but only for research, sale to government clients, or development purposes. It must be used in conjunction with an FFL 08 or 11.
The Class 2 SOT License, on the other hand, grants the authority to manufacture NFA items, including machine guns, subject to ATF oversight. This license must be used with either an FFL 07 or 10. When paired with an FFL 07, a Class 2 SOT holder can also sell NFA items.
The Class 3 SOT License is the most commonly recognized Special Occupational Taxpayer and is associated with retail sales of NFA items. This license is paired with either an FFL 01 or 02. Despite its popularity, the Class 3 Special Occupational Taxpayer License is often misunderstood, with terms such as “Class 3 Dealer” and “Class 3 License” thrown around inaccurately.
The choice of Special Occupational Taxpayer license will depend on the intended use of the firearms, so it’s essential to understand the differences between each type to make the right choice for your business or individual needs.
Class 1 SOT License
The Class 1 SOT License is a niche license designed for those involved in the military-industrial sector or holding government contracts. This license enables importing of NFA items such as machine guns, silencers, and other traditional firearms. However, the importation of Curio and Relic items is considered in particular circumstances.
The Class 1 SOT License should be used with the Type 08 FFL when importing NFA items, while a Type 11 FFL should be used to import more specialized items such as explosive munitions or artillery.
It’s important to note that this class is not meant for the average person, as it is primarily used for commercial purposes by those with deep pockets, government contracts, or research and development needs. The importation of items like RPG-7s is not within the realm of possibility for the average American.
Class 2 SOT License
It is required for individuals or businesses that manufacture National Firearms Act (NFA) firearms and devices. The Class 2 SOT license allows these individuals or companies to manufacture NFA items without paying the standard federal excise tax.
The Class 2 SOT license is paired with an FFL 07 or 10. The FFL 07 license allows for the manufacturing and sale of NFA items, while the FFL 10 license only permits the manufacturing of NFA items.
The Class 2 SOT license holder is subject to ATF oversight and policy and is responsible for ensuring that their manufacturing processes comply with federal regulations. They are also responsible for maintaining accurate records and following all other applicable laws and regulations, including those related to the transportation, storage, and transfer of NFA items.
The Class 2 SOT license is ideal for individuals or businesses that manufacture NFA items for sale to other FFL holders or for use in research and development.
Class 3 SOT License
It is required for individuals or businesses that engage in retail selling National Firearms Act (NFA) firearms and devices. The Class 3 SOT license allows these individuals or businesses to sell NFA items without paying the standard federal excise tax.
The Class 3 SOT license is paired with an FFL 01 or 02. The FFL 01 license allows for the sale of NFA items and other firearms, while the FFL 02 license only permits the sale of NFA items.
The Class 3 SOT license holder is subject to ATF oversight and policy and is responsible for ensuring that their sales practices comply with federal regulations. They are also responsible for maintaining accurate records and following all other applicable laws and regulations, including those related to the transportation, storage, and transfer of NFA items.
The Class 3 SOT license is ideal for individuals or businesses specializing in selling NFA items, including silencers, machine guns, and other firearms. With a Class 3 SOT license, the licensee can offer customers a wider selection of NFA items and provide a more comprehensive service.
How to Get a Special Occupational Taxpayer License
Obtaining a Class 1, 2, or 3 Special Occupational Taxpayer license involves the following steps:
Determine the type of SOT license needed
Class 1 SOT license is for individuals who want to import National Firearms Act (NFA) firearms for research and development or sale to government clients.
Class 2 SOT license is for individuals who want to manufacture NFA firearms.
Class 3 SOT license is for individuals or businesses who want to engage in the retail sale of NFA firearms.
Obtain an FFL
Class 1 SOT license requires either an FFL 08 or 11.
Class 2 SOT license requires either an FFL 07 or 10.
Class 3 SOT license requires either an FFL 01 or 02.
Complete the ATF Form 7
This form must be submitted with the required fee and supporting documentation, including fingerprint cards and photographs. Detailed information about the applicant’s business operations and personal data must also be provided.
Undergo a background check to get a SOT license.
The ATF will perform a background check on the applicant to ensure they are eligible for a Special Occupational Taxpayer license. The review includes an assessment of the applicant’s criminal history to ensure they have not committed crimes that would prevent them from obtaining a Special Occupational Taxpayer license.
Additionally, the ATF will look into the applicant’s financial situation to ensure they have the necessary stability to run a firearms business.
Furthermore, the agency will also review the applicant’s personal history, including their history of substance abuse, mental health, and other relevant factors. Finally, the ATF will examine the applicant’s residency history to ensure they have not lived in a state with restrictive firearms laws or been convicted of crimes in a state that would disqualify them from obtaining a Special Occupational Taxpayer license.
Wait for approval
The ATF will review the application and supporting documentation and decide on the license issuance.
Note: These steps are general guidelines and may vary depending on the state or local regulations. Additionally, it is crucial to stay informed about any changes in federal laws and regulations, as well as the requirements for obtaining and maintaining a Special Occupational Taxpayer license.
Conclusion
the SOT license is a crucial permit for individuals or companies involved in specific firearms-related operations and is obtained through the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
There are three different types of SOT licenses to choose from, each tailored to a specific purpose within the firearms industry, including the importation of NFA items (Class 1), manufacturing of NFA items (Class 2), and retail sales of NFA items (Class 3). The choice of Special Occupational Taxpayer license will depend on the intended use of the firearms, and it’s essential to understand the differences between each type to make the right choice.
The process of obtaining a Special Occupational Taxpayer license involves determining the type of license needed, completing the application process, and fulfilling any requirements set forth by the ATF. With a comprehensive understanding of the SOT licensing process and the different types of licenses available, individuals and companies in the firearms industry can ensure they stay in compliance with federal regulations.
