A Walk-Through of the FFL-SOT Process: Featuring a M249 SAW By: Terril Hebert


Owning a fully-automatic firearm in the United States means more smiles per range trip and an ammo bill that compounds with every trigger press. But beyond the dopamine fix, navigating full-auto ownership goes beyond having pockets that run deep enough. Our own Jeremy Stone and professional shooter Jack Copeland recently put rounds downrange with a new M249 SAW—a belt-fed 5.56mm machine gun. When the dust settled, Jeremy picked Jack’s brain on the tribulations of getting hands on this sort of hardware.

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Jeremy Stone takes aim with a M249 SAW.
Jeremy Stone takes aim with an M249 SAW.

The Backdrop

The regulation of fully-automatic weapons began with the 1934 National Firearms Act. The intent was to disarm organized crime that initially rose to challenge Prohibition in the 1920s. Although ordinary people could purchase fully-automatic weapons, their outsized media portrayal in a few gangland shootings spurred Congress to subject firearms like these to registration as well as the taxation of their manufacture and sale.

In 1986, the Firearm Owners Protection Act amended the NFA to prohibit the sale or transfer of machine guns with a few exceptions. Transfers and possessions between and by government agencies and those who already owned firearms before May 19, 1986 were exempted.

Since then, if you wanted to own a fully-automatic machine gun, you were stuck with firearms or auto sear kits made before that date. The manufacture, possession, and sale of new products were pursuant to their acquisition by government agencies. In either case, a potential buyer would have to purchase product from an FFL-SOT dealer with the ATF as an intermediary to approve the transfer.

ATF agents raid Polymer 80
The process of existing as an SOT means a delicate balance between business interests, local law enforcement, and the ATF. (Photo credit: gunsamerica.com)

How to SOT

The first step toward owning a new full-auto is to be an FFL or Federal Firearm License designed entity. An FFL allows you to manufacture and sell firearms. It begins with filing Form 7/7CR with the ATF and ends with an approved interview and a check on compliance with state and local business regulations.

The FFL is not peculiar. Operating gun stores are required to have one on file. The SOT or Special Occupational Taxpayer license is a step above and allows an FFL to deal in NFA items like suppressors, short-barreled rifles, and automatic weapons. There are three different classes of SOT licenses pertaining to firearms:

Class I—Importing NFA Firearms

Class II—Manufacturing NFA Firearms

Class III—Dealing NFA Firearms

For our purposes, making one new (i.e. post-1986) falls under a Class II SOT. But the production of the gun is made with the understanding that it is available for military/law enforcement use only. The SOT license must be renewed every year and nominally costs $1000 to maintain.  However, the rates of Class I and Class II licenses have been reduced for taxpayers grossing under $500,000 to a fee of $500. (26 U.S.C. 5801)

But paying the fee, filling out the necessary forms, and having the means to manufacture are not enough. FFL SOTs are subject to ATF logbook checks and walkthroughs like ordinary FFLs. Furthermore, the sale or transfer of new full-auto firearms are generally done from SOT to SOT and possession is usually legitimized by a business purpose. In Jack’s case, his SOT can possess an M249 SAW by virtue of the entity’s relationship supplying rifles to its local police department. Shooting new full-auto firearms is pure leisure, but the business of manufacturing and selling them is anything but.