View Full Version : SOT's Pay ANOTHER $200...?!?
OK, I just got done with an ATF inspection and the examiner informed me that any NFA weapons that I have purchased for my personal collection must be transferred to me as an INDIVIDUAL and I must pay a NFA tax of $200 per item.
It was always my understanding that as a SOLE PROPRIETOR FFL / SOT that the $500 SOT tax covered everything and that I simply needed to indicate in my bound book that they went into my personal collection the same as Title I firearms.
These are all items that transferred to my FFL with my name on it, it is NOT a corporation or trust. I would think anything on a Form 4 where I did pay the $200 because it did not come from a dealer would not even be in question. But why wouldn't the same apply to things like SBRs, suppressors and presamples that came in on a Form 3?
nineteenkilo
11-19-12, 20:23
Absolutely do not take their word for it. It may be time for legal advice from someone paid to deal specifically with firearms. I know it sounds trite to say that - but, it may be time indeed.
That could get REALLY expensive quickly if you have the same collection (or more) that you showed a few years ago...
I think you need to transfer them to yourself on a Form 5 with the reason for tax exemption is that you are a SOT and pay a yearly flat rate.
Otherwise it sounds like the guy is instructing you as though you were going to give up your license.
I suppose some consideration would need to be given to time in business, number of items and taxes paid thus far. for instance if you Form 5'd say 3 items ( $600 ) and were in business 4 years ( $2,000 ), they have more than collected enough tax from you. However if you were in business 1 year ( $500 ) and form 5'd 10 items ( $1,000 )... they probably would not be very happy.
IOW, the spirit of the situation while you are in business is that yes you can have a private collection and a business even if those are basically one in the same as a sole prop. and as such you distinguish in your books what is yours(personal) and what is your(business), but you don't get double hit for taxes
Not sure how that plays out when you go out of business and have NFA items and no stamps.
I'm just guessing, but that's how it seems to me. I see that guys point but there are some issues towards the sole prop. side of things and your paying ongoing yearly taxes.
I think you can beat this. It sounds like to me it should work like this.
No Tax
Dealer1 >>>Form3>>>YouDealer2>>>>Form5>>>>YouPerson
Not like this with Tax
Dealer1 >>> Form 4 >>> YouPerson
Provided of course you have shown and are showing that you operate as a legit business.
Too bad the ATF never hired anyone that knew how to write a good flow chart.
He/she is misinformed. Unless the policy has changed very recently.
As long as you are conducting business—that is, attempting to make money selling firearms—they can't tag you for the transfer fees on your personal NFA items. It's one of the benefits of an SOT.
The only historical precedent for the situation your examiner described is when the ATF found out people were getting their SOT, buying a bunch of NFA items to avoid the stamp fees, and then letting the SOT lapse very shortly after. If you're in that boat, then yes, you'll get hit with all the stamps. And rightfully so.
I seem to have sorted this one out.
The problem was I had them signed out to me in my bound book for my private collection. Apparently the ATF doesn't want you to do that and it gives them headaches.
If I want them transferred to me as an individual then I would need to do a Form 4 and $200 per item.
However, I can simply leave them in my inventory, even if they serve as demo models that aren't offered for sale, and when the day comes that I retire my license any remaining NFA items (except post samples) will revert to me without any additional NFA tax.
I was just doing it wrong. And yeah it would have been expensive, I spent part of last night preparing to dump a lot of machine guns, suppressors and SBRs.
... and when the day comes that I retire my license any remaining NFA items (except post samples) will revert to me without any additional NFA tax.
Glad you got worked out.... That's the part I don't understand though. When you retire you will have a load of NFA items with no stamps.
Aside from keeping all your business books as evidence for you and your heirs, how would you justify all those to some other ATF agent if they asked? Or even a local LEO... might be even harder to convince.
Do they issue you some sort of papers waiving the stamp?
Nice to know that you got it sorted.
I seem to have sorted this one out.
The problem was I had them signed out to me in my bound book for my private collection. Apparently the ATF doesn't want you to do that and it gives them headaches.
If I want them transferred to me as an individual then I would need to do a Form 4 and $200 per item.
However, I can simply leave them in my inventory, even if they serve as demo models that aren't offered for sale, and when the day comes that I retire my license any remaining NFA items (except post samples) will revert to me without any additional NFA tax.
I was just doing it wrong. And yeah it would have been expensive, I spent part of last night preparing to dump a lot of machine guns, suppressors and SBRs.
You worked it out correctly. When you give up your lic you just have left over inventory. You sign it out to yourself because you were a sole prop on the lic. You will keep the forms {prob 3's} that showed the transfers to you. This will satisfy whoever in the future. It is what I did way back in 97.
Glad you got worked out.... That's the part I don't understand though. When you retire you will have a load of NFA items with no stamps.
Aside from keeping all your business books as evidence for you and your heirs, how would you justify all those to some other ATF agent if they asked? Or even a local LEO... might be even harder to convince.
Do they issue you some sort of papers waiving the stamp?
Benefits have having been a paying SOT for those years. And no you just keep the Form 3s. A Form 3 just means the transaction was done dealer to dealer and the NFA tax was already paid in the form of SOT taxes.
Transferable items on Form 3s would still be transferable should I choose to sell them, but as I would no longer be a FFL /SOT those items would have to transfer on a tax paid Form 4.
Pre 86 dealer samples could only be sold to a current FFL / SOT.
I would not be able to retain ANY post samples, but I don't have any.
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