Understanding SOT (Special Occupational Taxpayer) classes is essential before entering the NFA business. This guide breaks down the differences between Class 1, Class 2, and Class 3 SOT designations.
SOT Classes at a Glance
| Feature | Class 1 SOT | Class 2 SOT | Class 3 SOT |
|---|---|---|---|
| Primary Activity | Import NFA items | Manufacture NFA items | Deal (sell) NFA items |
| Required FFL | Type 08 or 11 | Type 07 or 10 | Type 01, 02, or 09 |
| Annual Tax | $1,000* | $1,000* | $500 |
| Can Sell Retail | Yes | Yes | Yes |
| Can Manufacture | No | Yes | No |
| Can Import | Yes | No | No |
| Post-Samples | Import samples | Manufacture samples | Cannot obtain |
*$500 if gross receipts under $500,000
Class 1 SOT: Importers
What It's For
Class 1 SOT allows importing NFA items from outside the United States. This includes suppressors, machine guns, and other NFA firearms manufactured abroad.
Required FFL
- Type 08: Importer of firearms (non-destructive devices)
- Type 11: Importer of firearms, including destructive devices
Permitted Activities
- Import NFA items for sale
- Import post-sample machine guns for demonstration/sales to LEO/military
- Sell imported items to other SOTs (Form 3) or customers (Form 4)
- Conduct retail sales of NFA items
Cost
- FFL Type 08: $150 (3 years)
- FFL Type 11: $3,000 (3 years)
- SOT Tax: $1,000/year (or $500 if under $500K gross)
Who Needs Class 1
Businesses importing foreign-made suppressors (like B&T, Ase Utra) or bringing in NFA items from overseas manufacturers.
Class 2 SOT: Manufacturers
What It's For
Class 2 SOT allows manufacturing NFA items domestically. This is for companies that make suppressors, SBRs, machine guns, and other NFA firearms.
Required FFL
- Type 07: Manufacturer of firearms (non-destructive devices)
- Type 10: Manufacturer of firearms, including destructive devices
Permitted Activities
- Manufacture NFA items
- Manufacture post-sample machine guns
- Sell manufactured items to other SOTs or customers
- Conduct retail sales
- Deal in NFA items (same as Class 3)
Cost
- FFL Type 07: $150 (3 years)
- FFL Type 10: $3,000 (3 years)
- SOT Tax: $1,000/year (or $500 if under $500K gross)
Post-Sample Machine Guns
Class 2 SOTs can manufacture post-1986 machine guns ("post-samples") for:
- Law enforcement sales
- Military contracts
- Demonstration to potential government buyers
- Research and development
These cannot be sold to civilians and must be transferred to another SOT or surrendered if you close your business.
Who Needs Class 2
- Suppressor manufacturers (SilencerCo, Dead Air, etc.)
- Custom SBR builders
- Machine gun manufacturers (military/LEO contracts)
- Anyone wanting to manufacture NFA items commercially
Class 3 SOT: Dealers
What It's For
Class 3 SOT is for retail dealing in NFA items. This is the most common SOT class for gun shops selling suppressors, SBRs, and other NFA items to the public.
Required FFL
- Type 01: Dealer in firearms (most common)
- Type 02: Pawnbroker dealing in firearms
- Type 09: Dealer in destructive devices
Permitted Activities
- Buy NFA items from manufacturers/distributors (Form 3)
- Sell NFA items to customers (Form 4)
- Transfer between SOTs (Form 3)
- Hold NFA inventory
- Deal in transferable (pre-1986) machine guns
Cost
- FFL Type 01: $150 (3 years)
- FFL Type 02: $150 (3 years)
- FFL Type 09: $3,000 (3 years)
- SOT Tax: $500/year (always, regardless of gross receipts)
Limitations
- Cannot manufacture NFA items
- Cannot import NFA items
- Cannot obtain post-sample machine guns
Who Needs Class 3
- Gun shops selling suppressors
- NFA dealers
- Home-based FFL dealers entering NFA market
- Anyone selling NFA items retail
Choosing the Right SOT Class
Choose Class 1 If...
- You want to import foreign-made suppressors
- You have overseas manufacturer relationships
- You want to import post-sample machine guns
Choose Class 2 If...
- You want to manufacture suppressors or other NFA items
- You want to build custom SBRs commercially
- You need post-sample machine guns for LEO/military sales
- You want maximum flexibility (can also deal)
Choose Class 3 If...
- You only want to buy and sell NFA items (retail)
- You're adding NFA items to existing gun shop
- You want the lowest SOT cost
- You don't need to manufacture or import
Fingerprint Requirements
All SOT classes require fingerprints—but not directly for the SOT application. Fingerprints are required for the underlying FFL:
| Application | Fingerprints Required? |
|---|---|
| FFL Application (Form 7) | Yes - all Responsible Persons |
| SOT Registration (Form 5630.7) | No - FFL already verified |
| Adding Responsible Person (Form 7CR) | Yes - new RP only |
| FFL Renewal (Form 8) | Yes - all current RPs |
Need Fingerprints for Your FFL?
SlapEFT converts FD-258 fingerprint cards to ATF-compliant EFT format for any SOT class.
Convert Fingerprints →Can I Have Multiple SOT Classes?
Yes, but it's usually unnecessary:
- Class 2 includes Class 3 privileges: A manufacturer can also deal
- Class 1 + Class 2: Rare, but possible for import + manufacture
- Separate FFLs: Each requires its own SOT registration
Most businesses choose one SOT class that covers their primary activity.
SOT Tax Year and Renewal
All SOT classes share the same tax year:
- Tax Year: July 1 - June 30
- Renewal Due: July 1 annually
- Proration: Available for mid-year applications
If you start mid-year, your first year's tax is prorated. Subsequent years are full price.
What Happens If You Close Your SOT?
The consequences depend on your inventory:
Transferable Items (Pre-1986)
- Sell to other SOTs (Form 3)
- Sell to customers (Form 4)
- Register to yourself personally (pay transfer tax)
Post-Sample Machine Guns (Class 2 Only)
- Transfer to another Class 2 SOT
- Surrender to ATF
- Destroy
Post-samples cannot be kept personally or sold to civilians.
Frequently Asked Questions
Which SOT do I need to sell suppressors?
Class 3 SOT. If you only want to buy suppressors from distributors and sell to customers, Class 3 is sufficient and cheapest ($500/year).
Can I upgrade from Class 3 to Class 2?
You'd need to get the appropriate underlying FFL first (Type 07 instead of Type 01), then register as Class 2 SOT. It's not a simple "upgrade"—it requires a new FFL application.
Do all SOT classes require the same fingerprints?
Fingerprint requirements are based on your FFL, not SOT class. All FFLs require fingerprints for responsible persons via Form 7.
