How To Get A Class 3 Firearms License

If you enjoy collecting and shooting firearms, you probably already know that most civilians in the United States can legally own and shoot a vast array of different guns without a federal-level license.

However, there is a firearm licensing scheme for specific categories of individuals and business owners in the gun business, and one of the most coveted is the Class 3 firearms license. Learn all about this license, who can get one, what you need to obtain one, and what you can do with it.

What is a Class 3 License?

Although frequently used among firearms enthusiasts, the term "Class 3 license" is a misnomer; there is no actual license. In this context, "Class 3" refers to a Class 3 Special Occupational Taxpayer, a specific occupational class of Federal Firearms License (FFL).

In the United States, an FFL allows an individual to engage in the business of dealing, manufacturing, or importing firearms and ammunition and legally conduct interstate sales of firearms, as defined by the Gun Control Act of 1968.

There are multiple types of FFLs depending on the license holder's primary activity: dealing (buying and selling), manufacturing, or importing.

For example, a Type 01 FFL means the owner is a Dealer in Firearms Other Than Destructive Devices. Dealer also includes gunsmithing activities. Type 01 FFLs are commonly held by gun shop owners but not pawnshop owners or pawnbrokers. These establishments require their own Type 02 FFL.

Special FFLs also exist specifically for collecting or manufacturing ammunition; these types of FFL are notable for disallowing their holders from engaging in the firearms business.

Examples include Type 03 (Collector of Curios and Relics) and Type 06 (Manufacturer of Ammunition for Firearms).

The Special Occupational Taxpayer Status

However, holding an FFL alone does not allow you to deal, manufacture, or import NFA (National Firearms Act) items, also known as Title II weapons.

NFA items include all of the following:

Silencers, also known as suppressors or sound moderators.
Short-barreled rifles (SBR): Rifles with a barrel length of less than 16" or an overall length of less than 26".
Short-barreled shotguns (SBS): Shotguns with a barrel length of less than 18" or an overall length of less than 26".
Machine guns: Firearms capable of shooting more than one shot with a "single function of the trigger" (e.g., a single trigger pull results in multiple shots fired). This definition includes all firearms with a burst-fire or full-auto mode and all bump stocks.
Destructive devices (DD), which includes explosives, exploding ammunition, launchers for such ammunition, and firearms with a bore diameter larger than 0.500" (with certain exemptions, e.g., antique guns and shotguns legally exempted from that definition under the "sporting purpose" clause)
Any Other Weapon (AOW), a catch-all category for other regulated weapons.

If you wish to deal, make, or import NFA items of any kind, you must already possess a Federal Firearms License then pay the Special Occupational Tax, which costs $500 a year. Paying this tax changes your status to that of a Special Occupational Taxpayer.

As with FFLs, there are multiple types of SOTs known as SOT (Special Occupational Taxpayers) Classes.

The SOT Class system is where "Class 3" comes from; however, each SOT Class requires you to hold a specific FFL type.

Class 1 SOT: Sales and importation of NFA items; requires a Type 08 or 11 FFL.
Class 2 SOT: Sales and manufacture of NFA items; requires a Type 07 or 10 FFL.
Class 3 SOT: Can deal NFA items, no importation or manufacturing; requires a Type 01, 02, or 09 FFL.

For example, a gunmaker specializing in machine guns needs the FFL and SOT status to manufacture NFA items, such as Type 07 FFL with Class 2 SOT.

A Class 3 Dealer (in reality, Type 01 or 02 FFL holder with Class 3 SOT status) is not that different from a regular gun dealer or gunsmith. These dealers can buy and sell NFA items without filing the corresponding ATF forms and paying tax stamps for every purchase.

The Class 3 SOT Step-By-Step Guide

If you wish to become a Class 3 Special Occupational Taxpayer but don't know where to start, our guide can help you navigate the laws and requirements.

Step 1: Become a Federal Firearms License holder

If you do not already possess a compatible FFL, you will need to obtain one. Class 3 SOT status allows you to buy and sell NFA items but not import or manufacture them.

Therefore, you will need one of the FFL types that grants you the status of a dealer:

Type 01 FFL: Dealer in Firearms (Other than Destructive Devices).
Type 02 FFL: Pawnbroker in Firearms (Other Than Destructive Devices).
Type 09 FFL: Dealer in Destructive Devices.

Once you know which FFL type you want, you must meet all personal and business legal requirements:

Be a US citizen or a legal permanent resident (Green Card holder).
Be 21 years old or older.
Do not meet the ATF's definition of a Prohibited Person (in other words, you must be able to own guns legally) and have never been convicted of a GCA violation.
Have premises for your business (your home address is eligible; most FFLs in the United States are home-based.
Ensure local or state laws do not prohibit you from conducting firearm businesses at the given address (e.g., zoning restrictions).
Have a business intent. In other words, you must be able to show proof of business activity to the ATF during an audit. While it's legal to transfer firearms from your business to yourself, you cannot have an FFL for that sole purpose. In other words, it is illegal to use an FFL exclusively for personal use.

If you meet all the legal requirements, you must set up a legal entity for your business before you can send an application to the ATF. The ATF application process is the same for all license types. You must complete and send an ATF Form 7, pay the application fee ($150), and send any required supplemental materials, such as ID photos and fingerprint cards.

The ATF conducts a complete background check on you and all other individuals listed as Responsible Persons, such as people you have listed as co-owners, business partners, management, and shareholders.

You will then receive an appointment for an interview with an ATF Industry Operations Investigator (IOI), who will review your application, verify that all your information is correct, and ensure you and your business are compliant with all relevant laws.

If the IOI determines that you meet all requirements and background checks do not return disqualifying factors, the ATF completes your application, and you'll receive your license within 60 days.

Step 2: Become a Special Occupational Taxpayer

Becoming a Special Occupational Taxpayer requires you to register with the ATF by completing and sending an ATF Form 5630.7. You will need to choose the correct SOT Class for your FFL type.

The yearly SOT tax varies depending on your business' annual gross receipts. If you make less than $500,000 a year, your SOT tax is $500. If you make $500,000 or more, your SOT tax is $1,000.

SOT registrations expire on June 31 of each year, regardless of the time of application. To give yourself the best chances of success and avoid wasting money, you should send your application in July or August.

Once approved, you will be registered as an FFL holder with SOT status, allowing you and your business to deal in NFA items.

Quality Firearms Education For All Gun Owners

IFA Tactical Training aims to provide quality gun education for American citizens of all backgrounds. Our team of qualified instructors can give you the training and instruction you need to become a responsible gun owner.

If you'd like to enroll in one of our Michigan CPL classes or if you have any other questions about firearms training and information, call us today at (586) 275-2176.