What is a Class 3 Firearms License?
The term “Class 3 License” commonly refers to a Class 3 Special Occupational Taxpayer (SOT) registration that Federal Firearms Licensees can obtain to deal in items regulated under Title II of the National Firearms Act (NFA). This NFA item dealer license designation allows qualified firearms dealers to legally possess, transfer, and sell regulated NFA firearms and NFA firearms to qualified customers or other SOTs across the United States.
Class 3 SOT holders face additional ATF and Department of Treasury oversight and must maintain strict compliance with additional federal, state, and local laws governing NFA firearm transactions and/or prohibitions. This elevated status requires meticulous recordkeeping and adherence to specialized transfer procedures that go beyond standard firearm transactions, including federal registration, FBI identification and background check requirements, and tax stamp coordination (at this time).
Types of NFA Items That a Class 3 SOT Can Work With
Class 3 SOT licensees can legally handle various categories of NFA-regulated items:
- Short-Barreled Rifles (SBRs) – Rifles with barrel length shorter than 16 inches or overall length under 26 inches.
- Short-Barreled Shotguns (SBS) – Shotguns with barrel length shorter than 18 inches or overall length under 26 inches.
- Suppressors/Silencers – Sound suppression devices for firearms that require tax stamp approval.
- Machine Guns – Full auto firearms or devices, representing the most regulated NFA weapons category.
- Any Other Weapons (AOWs) – Unique NFA devices like cane guns, pen guns, and disguised weapons.
- Destructive Devices – Large caliber weapons and explosive devices requiring special federal government authorization (requires a Type 09, Type 10, or Type 11 FFL).
Obtaining a Class 3 SOT License
Before submitting your application for Class 3 SOT status, you must hold a valid Federal Firearm License. Eligible firearm license types include:
- Type 01 FFL – Dealer in firearms other than destructive devices
- Type 02 FFL – Pawnbroker dealing in firearms
- Type 09 FFL – Dealer in destructive devices
The application process requires submitting a completed application (ATF Form 5630.7) along with the necessary annual tax payment. Whether operating as a sole proprietor or any other legal entity type, this registration must be renewed yearly by July 1st via a renewal application, and ongoing compliance with additional federal, state, and local firearms regulations is mandatory.
What FFLs Should Know About the Class 3 SOT
Operating as a Class 3 SOT involves several critical responsibilities that differ significantly from standard firearm dealer operations:
- Enhanced Recordkeeping – Detailed tracking of all NFA item acquisitions, transfers, and inventory with specialized documentation requirements beyond typical dealer license obligations.
- NFA Transfer Process – Managing complex transfer procedures, including ATF form submissions, documentation for comprehensive FBI identification and background checks, and tax stamp coordination at this time.
- Inventory Management – Proper storage and security protocols for regulated NFA firearms with regular inventory accountability, often requiring enhanced security measures.
- State and Local Law Compliance – Understanding varying state and local regulations regarding NFA item possession, ownership and transfer restrictions, including special license/permission requirements in certain jurisdictions.
- Stricter ATF Compliance Expectations – Meeting elevated standards for inspections, audits, and regulatory adherence, including impeccable documentation and filing for all transactions.
- Market Opportunities – Access to specialized customer segments, including firearm enthusiasts seeking NFA items for personal use, collectors building a personal collection, and law enforcement agencies requiring specialized equipment.
How FFLGuard Can Help FFLs Manage Class 3 SOT Transactions
FFLGuard offers comprehensive legal protection and compliance support specifically designed for NFA dealers and Class 3 SOT operations, helping firearms dealers navigate the complex landscape of federal firearms regulations.
Our NFA Yearly Service Plan provides specialized legal and compliance support tailored to the unique compliance challenges facing NFA dealers. This program includes unlimited questions and answers and library access related to NFA firearm transactions and SOT operations, all provided by our expert team.
FFLGuard’s NFA-specific legal services are designed to help FFLs confidently navigate the complexities of the National Firearms Act. These services support Class 3 dealers and SOT holders by providing expert legal representation, hands-on compliance services, trust formation feedback, and ongoing regulatory guidance. Each offering is built to reduce legal risk, streamline operations, and help businesses stay fully compliant with ATF regulations.
- Enhanced Legal Representation: FFLGuard provides flat-fee legal representation for NFA-related matters, including ATF inspections, Class III operations, and regulatory violations. This includes unlimited access to HelpDesk support and a one-hour consultation to apply the NFA Law Plus Guidelines.
- Optional NFA OnSite Training: Delivers hands-on education at your location, covering proper NFA transfer procedures, recordkeeping requirements, and compliance best practices for your staff, with special focus on NFA gold standard protocols.
- NFA Law Plus Guidelines & Informational Materials: Provides ongoing access to updated regulatory guidance, compliance checklists, and expert insights on evolving NFA regulations and requirements.
- SOT Application & Assistance Option: Offers expert guidance through the initial SOT application process, renewal permit procedures, and ongoing support for renewals and regulatory changes.
Don’t navigate NFA compliance alone. Learn more about our FFLGuard plans to find out how our specialized Class 3 SOT protection plans can safeguard your business and ensure regulatory compliance for all your NFA device operations.
FAQs
In order to get a Class 3 SOT, you must first obtain and maintain a valid FFL (Type 01, 02, or 09) before submitting your application for Class 3 Special Occupational Taxpayer status.
The annual Special Occupational Tax (SOT) fee for a Class 3 dealer is $500, provided the business’s gross receipts are under $500,000 per year. If receipts exceed that threshold, the fee increases to $1,000. The SOT tax year runs from July 1 to June 30, and payment must be submitted using ATF Form 5630.7 before July 1 each year for renewals. This fee is separate from your FFL renewal, which operates on a three-year cycle.
A Class 1 SOT allows importing NFA items, a Class 2 SOT permits manufacturing NFA items, and a Class 3 SOT enables dealing NFA firearms under federal law.
While not federally required, specialized insurance and enhanced security measures are recommended due to the increased liability exposure and valuable nature of short barrel rifles, machine guns, and other NFA devices.