Suppressors SOT Expiration

[roostercogburn98]

So a question for any current SOT holders.

I have dug a little and this is what I make of the situation IF you let your SOT expire.
1.Any PRE 86 transferable MGs and suppressors would be yours to legally keep after the business officially closes.
2.Any POST 86 MGs,Dealer Samples, and items requiring a law letter would have to be surrendered due to belonging to the business and not legal for normal civilian ownership.

please correct me if I am wrong. I am just curious about this based off a conversation I had with a guy who said an ATF field agent told him he would have to turn EVERYTHING over if he let it expire.

 

[_Windrider_]

They don't have to be surrendered. They can be transferred to another SOT and/or sold per the law by that SOt. But yes bottom line, you cant keep them.

That is my understanding.

 

[roostercogburn98]

Clarifying surrender- turned over to someone legally allowed to own them IF they require an active SOT or law/demo letter to possess.

thanks for the reply as well

 

[CoryT]

If you are a sole proprietor, you keep pre-May samples and transferables, along with any other NFA items, just sign them out to yourself. Post-May guns need to be transferred out, be destroyed or abandoned to the ATF BEFORE THE SOT EXPIRES!

If you keep any post sample past your SOT end date you are in possession of an unregistered MG, go to jail.

If you are a corporation, LLC, etc than you MUST transfer all NFA items to eligible owners before expiration.

Post May samples normally need a demo letter to be transferred, but if you are giving up your SOT they can be transferred to a Class II with no law letter.

I just went through the process myself after being a Class II for 30 years.

 

[roostercogburn98]

@CoryT thank you for that.

So the LLC or “business” is the key correct? Anything owned under that premise would be a business or corporation asset and not an individual asset. That helps me understand his position now since he is an LLC.

 

[CoryT]

In his case everything needs to be transferred.

 

[HansohnBrothers]

If you are a corporation, LLC, etc than you MUST transfer all NFA items to eligible owners before expiration.

LLC can keep all NFA (except post-'86 machine guns) as long as the LLC is kept current.

Page 86: https://www.atf.gov/firearms/docs/undefined/atf-national-firearms-act-handbook-chapter-14/download

"Corporations, partnerships, and associations. FFLs licensed as corporations, partnerships, or associations, who have been qualified to deal in NFA firearms and who go out of the NFA business, may lawfully retain their inventory of these firearms, including imported NFA “sales samples,” as long as the entity does not dissolve but continues to exist under State law. No NFA transfer occurs that would require an ATF-approved transfer because the firearms are still possessed by the same entity to which they were previously transferred and registered."

 

[CoryT]

Correct, I should have been more explicit. If the company stops operations and dissolves the corporation/partnership, etc, then the transfers are required. Note that these would be tax paid to other than another dealer/LE.

 

[roostercogburn98]

So In his case, he had an 01 as well and the LLC is for that business. If he terminates then SOT and keeps the 01 and the LLC, he is legally allowed to keep anything that is not post 86. Am I understanding that correctly?

 

[HansohnBrothers]

So In his case, he had an 01 as well and the LLC is for that business. If he terminates then SOT and keeps the 01 and the LLC, he is legally allowed to keep anything that is not post 86. Am I understanding that correctly?

Yes, that is correct.

 

[tru3skilla]

Correct, I should have been more explicit. If the company stops operations and dissolves the corporation/partnership, etc, then the transfers are required. Note that these would be tax paid to other than another dealer/LE.

@CoryT I have a couple questions as I'm thinking of becoming an FFL with SOT so I can own without constantly filing ATF Forms.
If I do Sole-Pr. and my license lapse or I want to drop my SOT, do I get to keep my SBR's and suppressors if I keep my FFL?

Also, you reference - "you keep pre-May samples and transferables, along with any other NFA items, just sign them out to yourself. Post-May guns need to be transferred out"

Is this because the annual tax date on the SOT or are you referring to a specific Date in time as in "Before May 2020 or After May 2020"

Thanks for patience and grace as I am starting to really grow my collection and these stamps are not only expensive but the waits are annoying. I stumbled upon this process from a YouTube video and I'm in the research stage.

Thanks again - Shawn

 

[_Windrider_]

@CoryT I have a couple questions as I'm thinking of becoming an FFL with SOT so I can own without constantly filing ATF Forms.
If I do Sole-Pr. and my license lapse or I want to drop my SOT, do I get to keep my SBR's and suppressors if I keep my FFL?

Also, you reference - "you keep pre-May samples and transferables, along with any other NFA items, just sign them out to yourself. Post-May guns need to be transferred out"

Is this because the annual tax date on the SOT or are you referring to a specific Date in time as in "Before May 2020 or After May 2020"

Thanks for patience and grace as I am starting to really grow my collection and these stamps are not only expensive but the waits are annoying. I stumbled upon this process from a YouTube video and I'm in the research stage.

Thanks again - Shawn

If you relinquish your SOT you must get rid of anything that has not been transferred to yourself as an individual, ie if you haven’t paid for a stamp you can’t keep it.

I wish you the best of luck and I’d be curious how you are going to run a business for profit. The ATF is revoking more licenses than it’s issuing these days.

 

[tru3skilla]

If you relinquish your SOT you must get rid of anything that has not been transferred to yourself as an individual, ie if you haven’t paid for a stamp you can’t keep it.

I wish you the best of luck and I’d be curious how you are going to run a business for profit. The ATF is revoking more licenses than it’s issuing these days.

Even if I keep my FFL? With FFL are you required to "run a business for profit"?

With the FFL justification, I wasn't planning on Selling.

I mainly want to use it for personal. My reasoning to the ATF I was going to try "Gun Safety/Handling Reviews, online and print."

 

[_Windrider_]

Even if I keep my FFL? With FFL do you have "run a business for profit"?

With the FFL justification, I wasn't planning on Selling.

I mainly want to use it for personal and reasoning to the ATF. I was going to try "Gun Safety/Handling Reviews, online and print."

That’s a legitimate reason, you just have to convince the ATF.

Ryan Cleckner describes it like this

If you intend to engage in the business of making or selling firearms, then you must have an FFL. Likewise, in order to obtain an FFL, you must have the intent to engage in the business of making or selling firearms.

Intent is so important that it appears five times in five different boxes on the application

 

[_Windrider_]

If you’ve never heard of it, I would pay for Cleckner’s rocket FFL course. It’s pretty good cheap and worth the money.

I was the first one to ever take it and complete it. I still don’t have an FFL. I just haven’t organized and gotten to that point yet.

 

[tru3skilla]

That’s a legitimate reason, you just have to convince the ATF.

Ryan Cleckner describes it like this

If you intend to engage in the business of making or selling firearms, then you must have an FFL. Likewise, in order to obtain an FFL, you must have the intent to engage in the business of making or selling firearms.

Intent is so important that it appears five times in five different boxes on the application

I would need to buy and and sell every now and then for my Gun Reviews so that works I guess.

 

[cjs88]

The FFL I use for transfers sells no firearms. They just do cerakote. Maybe go that route for an FFL? Not sure about an SOT for NFA stuff.

 

[_Windrider_]

I would need to buy and and sell every now and then for my Gun Reviews so that works I guess.

It’s not me you have to convince.

 

[_Windrider_]

The FFL I use for transfers sells no firearms. They just do cerakote. Maybe go that route for an FFL? Not sure about an SOT for NFA stuff.

There are 9 types of FFL licenses. Not sure which one he has. Technically I don’t think you need an FFL if you only do cerakote, but it sure makes it easier if you get stuff from out of state and also makes it easier to recover money by selling a firearm if you don’t get paid

 

[cjs88]

It's a 7 - manufacturer of firearms blah blah blah. Guess it fits because they do some "smithing" to put everything back together once coated.

 

[_Windrider_]

It's a 7 - manufacturer of firearms blah blah blah. Guess it fits because they do some "smithing" to put everything back together once coated.

Most get a type 7 because it covers a wide swath of activities. Reassembling a firearm after coating to return to owner doesn’t require an ffl cause you aren’t selling it or manufacturing it. You are simply returning it to its owner. No ownership transfer was done.

Just as an aside, when I get stuff coated I send it dissasembled and have it returned disassembled simply cause I don’t want anyone putting my guns together except me. There are a few exceptions and entities I trust however.

 

[_Windrider_]

I would need to buy and and sell every now and then for my Gun Reviews so that works I guess.

Also don’t forget that the state stuff can be harder than the federal. Many states require brick and mortar and don’t allow home based FFL. Then there is zoning, etc etc etc.

 

[tru3skilla]

Most get a type 7 because it covers a wide swath of activities. Reassembling a firearm after coating to return to owner doesn’t require an ffl cause you aren’t selling it or manufacturing it. You are simply returning it to its owner. No ownership transfer was done.

Just as an aside, when I get stuff coated I send it dissasembled and have it returned disassembled simply cause I don’t want anyone putting my guns together except me. There are a few exceptions and entities I trust however.

I know here in Washington State, when I have my rifle builds checked for head spacing and test fire. They make me fill out papers if the lower is attached. They have a build lower exactly for this, so I just have them use their lower and it avoids that.

 

[tru3skilla]

Well said, I'm deff in the research stage. The main reason I think I'm going to pivot is that I plan on moving (across state lines) and I think that would be a huge hassle. I think I'm just going to continue with Form 1's at this point.

 

[_Windrider_]

I know here in Washington State, when I have my rifle builds checked for head spacing and test fire. They make me fill out papers if the lower is attached. They have a build lower exactly for this, so I just have them use their lower and it avoids that.

Wonder if that’s a wa state thing. So communist now. There shouldn’t be a 4473 required because no ownership transfer took place.

 

[tru3skilla]

Wonder if that’s a wa state thing. So communist now. There shouldn’t be a 4473 required because no ownership transfer took place.

Nailed the WA State comment on the head. OR is now right in the mix too.

 

[CoryT]

Excepting the Curios and Relics FFL, all other require you to be running a for profit business, it's not allowed for personal collection purposes. Whe an SOT expires, if it is a sole proprietor, you keep all NFA items that are not Post May samples, no transfer forms or additional tax is paid. Post May samples must be transferred out of inventory PRIOR to your tax status lapsing, or abandoned to the ATF.

If you are a corporation, LLC or other business entity OTHER THAN a sole proprietor, all firearms require a transfer to an individual, tax paid on NFA items. Such transfers must be completed BEFORE you FFL/SOT expires.

If you receive firearms from out-of-state clients, an FFL is required. Which one depends on what type of business you intend on doing.

Note that a type 7 or 10 (manufacturer of firearms) also requires you to register with DDTC under ITAR rules and pay the $2000 per year minimum fee.

 

[CoryT]

If you relinquish your SOT you must get rid of anything that has not been transferred to yourself as an individual, ie if you haven’t paid for a stamp you can’t keep it.

I wish you the best of luck and I’d be curious how you are going to run a business for profit. The ATF is revoking more licenses than it’s issuing these days.

That is not strictly correct, transfers are only required for a business that is not a sole proprietor.

I will note however, should the ATF decide that you only used the FFL to amass a private collection, you will be charged with tax evasion, have the firearms confiscated, become a felon, serve time and STILL pay the tax owed on each firearm.

So, you get your FFL, buy 50 MG's, sell 2 and end your business. Go to jail, go directly to jail and pay $200 each on the 48 remaining guns, which you can't keep.

 

[tru3skilla]

That is not strictly correct, transfers are only required for a business that is not a sole proprietor.

I will note however, should the ATF decide that you only used the FFL to amass a private collection, you will be charged with tax evasion, have the firearms confiscated, become a felon, serve time and STILL pay the tax owed on each firearm.

So, you get your FFL, buy 50 MG's, sell 2 and end your business. Go to jail, go directly to jail and pay $200 each on the 48 remaining guns, which you can't keep.

Yeah, Imma just pull the plug on FFL/SOT thing and just do the Form 1's