If you’re looking for an NFA trust, you are probably pretty familiar with the National Firearms Act and what firearms it covers. However, for many people who are just getting into NFA ownership for the first time, there’s still a lot of things you can learn. The following is a basic primer on the National Firearms Act and the firearms it covers.
Introduction
Many people in the general public are under the mistaken impression that machine guns, silencers, and short barreled rifles and shotguns are illegal. In fact, these items are perfectly legal to own in many states, provided you follow federal registration requirements. The 1934 National Firearms Act (NFA) requires registration and a tax for the transfer or construction of these items. The registration is accomplished using certain ATF forms. The most common ones are the Form 1 (for construction of a new NFA item), Form 4 (for the transfer of a new NFA item) and Form 5 (for inheritance of an NFA item from an estate). When the ATF has approved your form, you will receive an actual canceled tax stamp in the mail. (If you use the eForms system, the finished form will be e-mailed to you with a stamp image on it. You should print this out, as you will not be receiving a paper stamp in the mail.)
Types of NFA Firearms
There are a few broad categories that NFA items fall into:
1. Machine guns.
Even for the experienced NFA collector, machine guns may be financially out of reach. They are legal to own by following the NFA registration process, but what makes them different from other NFA items is that because of federal laws passed in 1968 and 1986, no new machine guns can be manufactured or imported. That means there is a fixed number of legally registered machine guns in the United States. Supply and demand makes them very expensive. The cheapest available machine guns at this time are MAC-10 machine pistols at approximately $3000-5000. A transferable M16 may cost closer to $20,000. Since you cannot manufacture your own machine gun, the only way to get one is to buy one on a Form 4 or inherit one on a Form 5.
You might be tempted to become a special type of FFL (federal firearms licensee, or gun dealer) in order to get access to cheaper or newer machine guns. Understand that it is a complicated process to become licensed to sell machine guns, and the ATF does not allow you to do it simply to expand your collection—you must be in the business of buying and selling, or manufacturing, machine guns to get this license. It also requires additional taxes and fees that drive up the cost, as well as extensive record-keeping. In short, beware anyone suggesting that you can own newer or cheaper machine guns. When it comes to fully automatic weapons, if it sounds too good to be true, it probably is! You’ve got to pay to play!
2. Silencers
Many people “in the know” refer to these as suppressors, since they suppress the sound of a firearm, but cannot fully silence the noise of a gun firing. However, federal law refers to them as silencers, and that was the name used by their inventor, Hiram Maxim (who also invented the car muffler). It is legal to manufacture new silencers, so you can construct one after submitting a Form 1 to the ATF, or you can buy or inherit one. Modern silencers are much more effective than the original Maxim silencers. There has been an explosion of new silencer manufacturers in recent years as NFA ownership has grown more popular. Unless you own a machine shop, it makes sense for most people to buy a silencer. Because the silencer’s serial number must be submitted on the Form 4 to the ATF, the normal process is to go to a dealer that sells silencers and purchase the silencer. The dealer retains the silencer while you’re waiting on ATF approval. Once you receive your tax stamp in the mail, you can pick up your new toy. Note that the National Firearms Act uses the term “firearm” in a narrow legal sense to refer to items it covers, and that includes silencers. It make seem weird to call a silencer a firearm, but this specific law does.
3. Short-barreled rifles and shotguns (SBR and SBS)
Under federal law, rifles must have a barrel of at least 16 inches. Shotguns must have a barrel of at least 18 inches. By applying for a tax stamp, you can chop your shotgun or rifle barrel as short as you like. Possibly the most popular rifle for registering as an SBR these days is the AR15. Because the lower receiver is the firearm, one can register an AR15 as a short-barreled rifle and then change out uppers to multiple configurations. The Form 1 requires you to enter a length and caliber. That doesn’t mean you’re stuck with that configuration. Once your firearm is registered as a short-barreled rifle, your barrel can be any length or caliber. The ATF wants you to update them if you change configurations “permanently,” but as long as you can swap back to the “original” upper, the ATF doesn’t need to know if you swap out for a different upper occasionally. This provides you with the ability to have barrel lengths ranging from as little as 4 inches to 14.5 inches, in calibers from 9mm to 5.56 and all the way up to .50 Beowulf with just one tax stamp. You just have to make sure that your short barreled uppers only ever get installed on a lower receiver registered as a short-barreled rifle (or on a “pistol” configured lower receiver).
4. Any Other Weapon (AOW)
The fourth category of NFA items is the Any Other Weapon. This is something of a catch-all category. Things like pen guns and cane guns fall into this category. The main thing most collectors might want to register as an AOW is a smooth-bore pistol. Shotguns with stocks (or that have had a stock installed at any point in its life) can be made into short-barreled shotguns. But virgin shotgun receivers can be built with a pistol grip only and short barrel. These are registered as Any Other Weapons. Although there is some disagreement on the matter, the ATF also takes the position that a handgun with a vertical forward grip must be registered as an AOW.
The AOW has one final difference from other categories of NFA items. Manufacturing or transferring all other NFA items requires a $200 tax. For the AOW, manufacturing is still a $200 tax, but a transfer is only a $5 tax.
5. Destructive Devices
This is the final category of NFA items, and includes an interesting variety of firearms and weapons. Weapons with a bore larger than half an inch are destructive devices, except for shotguns which the government has deemed “suitable for sporting purposes.” That means that most 12-gauge shotguns are not destructive devices, since they are suitable for sporting purposes, but certain ones are. The “Street Sweeper” is a particular 12-gauge revolving shotgun, created for riot control purposes, that was deemed a destructive device. Rifles can also be destructive devices, such as the Lahti 20mm anti-tank rifle, which must be registered.
Explosives are also destructive devices. Grenades, mines, bombs, rockets and missiles are all destructive devices, which can be legally owned if the tax stamp is paid. However, a separate $200 tax stamp must be paid for each one, and once you blow it up, that item and the $200 tax are gone forever.
One of the most common destructive devices is the 40mm grenade launcher, whether stand-alone or in M203 configuration for use under the barrel of an M16 or AR15. These launchers are a destructive device requiring a $200 tax stamp, as are any explosive rounds for them. However, non-explosive 40mm rounds are not destructive devices, meaning you can own and fire all the “chalk” rounds you want for your registered 40mm launcher without paying additional taxes.
One alternative to the 40mm grenade launcher is the 37mm flare launcher. Because it was never designed to be used as a weapon, a 37mm flare launcher does not need to be registered as a destructive device as long as you only shoot flares or other “marking” rounds out of it. This provides an alternative to get that M203 look for your AR15 that doesn’t require a tax stamp. However, if you plan to shoot explosive rounds, shotgun rounds or even bean bag rounds out of your 37mm launcher, you must register it as a destructive device because you will be using it as one.
How to Obtain NFA Firearms
Once you’ve decided you want to own NFA items, there are a couple different ways to go about it. Unless you’re inheriting one on a Form 5 (which is outside the scope of this post), you will either need to file a Form 1 (Application to Make a Firearm) or Form 4 (Application to Transfer a Firearm) with the ATF. You fill out the form, send it to the ATF along with a check for $200 (or $5 for an AOW transfer) and then play the waiting game. It can take anywhere from a few weeks to a year for the ATF to approve your form and send you a tax stamp. An average of 6 months or more seems to be a good guess these days, but it can vary widely. The good news is that if you can pass the background check to buy a regular gun, there should be no reason for the ATF to deny you an NFA firearm. If you are denied for whatever reason, you will receive your $200 back.
It has become somewhat fashionable for trusts to be referred to as a “loophole” in the NFA, but they’re not. They are simply a different way to own NFA items. Trusts have another benefit as well. Anyone named as a trustee can legally be possession of an NFA item registered to the trust. This is the perfect solution for married couples who want both spouses to be able to possess the firearm individually, since normally the only person who can possess an NFA item is the registered owner. (He or she can allow others to use it while he or she is present, but NFA items cannot be “loaned out” to friends.) Many people will also list other family members or close friends as trustees so that several people can “share” an NFA firearm without breaking the law.