Understanding federal firearm licenses (FFLs) and the distinctions of each class is important for individuals operating within the firearm industry. The Class 2 Special Occupational Taxpayer (SOT) status is an essential classification for FFL holders who want to manufacture NFA firearms and deal with specific items under the National Firearms Act (NFA), allowing them access to a broader spectrum of firearms and accessories.
What is a Class 2 SOT?
The Class 2 SOT status is a critical classification for Federal Firearms Licenses in the United States, allowing them to manufacture and deal in NFA firearms. This encompasses items such as machine guns, short-barreled rifles, and destructive devices. Acquiring the Class 2 SOT license isn’t just an administrative step; it’s a strategic move for FFL holders to get involved in the specialized domain of NFA weapons.
Securing this specific SOT class ensures that firearm dealers operate within the regulations of federal law, facilitating the legal and responsible manufacture and transaction of regulated weapons. The Class 2 SOT is essential for firearm manufacturers and dealers to expand their product offerings, adhere to legal and state regulations, and safeguard both the dealer and the consumer.
Types of NFA Firearms under Class 2 SOT
The world of firearms is vast, with each type bringing its own set of regulations and potential opportunities. For Class 2 SOT holders, it is essential to understand the different types of firearm components to ensure compliance. The following is a breakdown of the primary types of NFA firearms associated with the Class 2 SOT.
Machine Guns and Full-Auto Firearms
Machine guns and full-auto firearms represent a significant segment of NFA items. With the ability to fire multiple rounds with a single pull of the trigger, these firearms are subject to stricter regulations. As Class 2 Special Occupational Tax holders are licensed to manufacture these types of firearms, there are certain rules that need to be followed regarding their production.
Short-Barreled Rifles
Short-barreled rifles have barrels less than 16 inches in length, and their compact nature and ease of concealment place them under strict NFA guidelines. Manufacturers with a Class 2 SOT license can produce and deal with these types of firearms, but it requires the firearm dealer to follow specific procedures during their production.
Destructive Devices
As the most varied category in NFA firearms, destructive devices can range from explosives to grenades to large caliber firearms with a bore diameter greater than 1/2 inch. With these firearms, there is a potential for significant harm, which makes it essential for Class 2 SOT licensees to ensure adherence to federal regulations.
Getting Started with Class 2 SOT
The Class 2 SOT status is designed for individuals who are producing and dealing with NFA items. This process begins with understanding the relationship between the FFL types and SOT classifications. To obtain Class 2 SOT, it is essential to acquire the Type 07 FFL, which is for the manufacture of firearms. While the application process is comprehensive, it is the gateway to expanding your opportunities in the firearm industry.
Navigating The Application Process
Before obtaining a federal firearm license, applicants must navigate through ATF forms and background checks. You can apply for an FFL through the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Every SOT application also goes through a rigorous background check to ensure that potential SOT holders are adhering to federal laws and regulations of the firearm industry. This often involves submitting fingerprint cards and making sure your information is accurate on the application. SOT costs range from $500 to $1,000, depending on the type of license you need and the sales volume of your firearms business.
FastBound’s Role in Streamlining Procedures
The journey to obtaining a Class 2 SOT can be complex, but with our industry-leading software solutions, we help individuals who’ve already obtained their FFL with the complexities of compliance and regulation. By simplifying the steps for completing paperwork and ensuring accuracy, FastBound empowers FFL dealers and manufacturers to focus on their business, strengthening their position in the industry.
The Impact of FastBound’s Industry-Leading Solutions
Entering Class 2 SOT territory creates opportunities and potential for dealers and manufacturers to expand their firearms business, especially when obtaining government contracts and serving government clients. Obtaining the SOT classification and FFL license demonstrates the manufacturer’s dedication to the legal requirements and responsibilities that surround this industry. This dedication not only allows a manufacturer of firearms to gain standing in the market but also helps them contribute to the evolving landscape of the firearms industry. FastBound stands out as an industry leader for guiding businesses through the steps for maintaining compliance with firearm regulations. By offering solutions that simplify the compliance process, we aim to empower these businesses, ensuring that each FFL holder maintains the highest standards of legal compliance throughout the entire journey.
