I am not a lawyer, I am not an FFL, I don’t hold an SOT. Do NOT use anything I say in this article as reliable.
Having given you that warning, I want to talk about FFL and SOT for a bit.
There was a time, prior to 1968, when people were able to purchase firearms like any other good or commodity. If your local bar wanted to sell guns, they could. If the local hardware store wanted to sell guns, they could. If you were a large mail order company, you too could sell guns.
The only real requirement was that you had to pay a transfer tax on NFA items.
The government decided that it was too dangerous to allow just anybody to sell guns. They set up federal firearm licenses and federal firearm licensees. If you had an FFL, you could still buy guns the way you always could.
This “loophole” meant that many people became FFLs to be able to continue to buy and sell like they always had. These people were called “kitchen FFLs”.
The ATF didn’t like it. The federal government didn’t like it. What good did it do to have this method to control the sale of guns when everybody was going out to get FFLs?
The ATF pushed back and the definition of an FFL was updated to restrict who could hold FFLs. This led to the Curio and Relic FFL. The idea being that people who were collecting should only be collecting “old” guns. If a gun was old enough, then you could buy it with your C&R FFL.
They are attempting to change the definition of “curio and relic” because early production AR-15s are now becoming C&R firearms.
There are different FFLs for different types of firearm commerce.
- Firearm Dealer/Gunsmith
- Pawnbroker
- Collector
- Manufacture of Ammunition
- Manufacturer of Firearms
- Importer of Firearms
- Dealer of “Destructive Devices”
- Manufacturer of “Destructive Devices”
- Importer of “Destructive Devices”
The “normal” FFL we interact with is a Type 01, Firearm Dealer/Gunsmith. A Type 07 FFL would be a manufacturer of firearms. If you are a Type 01, you cannot manufacture firearms for resale.
If you are a Type 07, you can manufacture for resale. While you or I might consider the most important task of manufacturing a firearm to be quality and safety, the reality is that it is the paperwork. There is an instant in time when a piece of aluminum becomes a firearm.
Since a manufacturer of firearms must have an accurate record of every firearm they have, the moment a “thing” becomes a “firearm” it must have the correct markings. If it does not, then the manufacturer is in violation of federal law.
What that means, is if you put a raw forging into a CNC machine, that CNC machine spits out a finished AR-15 lower which is taken to have a serial number stamped on it, you have broken the law. That firearm existed from the moment the CNC machine “created” the firearm. Until the serial number is stamped on it, it is an unserialized firearm, a big no-no in the commercial manufacturing of firearms.
Given that you have jumped through all the hoops to be a Type 07 FFL, now you can make “fun” things too! Right?
Not so fast.
The government recognizes that to reduce the number of fun things available, you make them more expensive. Having somebody making fun things is not really a good idea. So they add a tax to it. If you want to deal in NFA items, you have to pay a special occupation tax, or SOT, to the government.
With a SOT of the right class, an FFL can also deal in NFA items.
If a Type 08 FFL, an importer of firearms, wants to sell foreign made NFA items to the government, they have to get a Class 1 SOT. Let’s say you are the mayor of Chicago, and you want MP5s for your 149-man personal protection detail, at some point in the process, a Class 1 SOT with an FFL 08 would be required to import those MP-5s.
You can also import for research and development under Class 1 SOT.
If you want to make NFA items, you have to get a Class 2 SOT to go with your Type 07 FFL. At that point, you can start manufacturing most NFA items. What you cannot manufacture is machine guns.
The only people who are allowed to possess post 1985 manufactured machine guns are state actors. Even if you have those magic permission slips, making a machine gun is still a no-no.
A Class 3 SOT in combination with a Type 01 or 02 FFL allows that dealer or pawnbroker to buy and sell NFA items.
What this means in practice is that you can go get a Type 07 FFL and make model GFZ-007 pistols and sell them.
If you get a Class 2 SOT to go with that Type 07 FFL, you can make the model GFZ-007s, the version with the built-in silencer.
You still cannot make the GFZ-007g, the version with the giggle switch. That is forbidden.
Unless… You are making the GFZ-007g for a state actor.
How does the ATF know you are making it for a state actor? You have a letter from that state actor saying that they want a demonstration and are looking to buy some sort of giggling firearm.
Now you have the state actor requesting that you provide them with a demonstration. Since the state actor in most cases is a police department, these are called “law letters”.
So you manufacture a GFZ-007g, you show it to the state actor that asked to see one. They decide they would rather not buy it. You put it back in the safe as a “demo”. You now possess a post ’85 sample machine gun.
If you give up your FFL (or just your SOT), you have to divest yourself of that machine gun. You are not allowed to possess a post ’85 machine gun for your purposes. You are only allowed to have possession of it to demonstrate, in hopes of sales, to a state actor.
Now, there are some old boy friendly law enforcement groups. They often have good working relationships with the local gun people.
So you have a Type 07 FFL and a Class 2 SOT, and you decide you want to drill the extra hole and drop an auto-sear into your AR-15. That is illegal.
The next time the chief stops in, you mention to him that you’d like to have a law letter to do such a thing. He thinks about it and says, “hell yes, I’d love to get a chance to fire a full auto AR-15!”
A few days later, you have your law letter. You manufacture a full auto AR-15.
You call up the chief, and he comes out, and the two of you have a day of blasting through hundreds of rounds of 5.56×45 mm.
The Chief goes back happy, you’re happy. Life is good.
The next day, you are at lunch with some of the guys and somebody says, “wouldn’t be cool to make a full auto AK?” “Let’s do it!” you respond.
You still have that law letter, you can still manufacture machine guns. All should be good, right?
Nope, the state actor hasn’t requested that item. You don’t have all that is required to make that type of NFA item. You can still do it, but you have to try to sell it to the state actor, or it doesn’t count.
If the Chief wrote you that letter and there was never an interest by a state actor to acquire machine gun(s), then that letter is fraudulent.
If the law letter is fraudulent, then the Class 2 SOT doesn’t allow you to manufacture machine guns.
Conclusion
Numerous people that want to play with machine guns have jumped through the hoops to become the right type of FFL with the right type of SOT to acquire machine guns. Including getting a law letter.
The ATF is cracking down on those people who are getting the proper combination of permission cards from the government to possess post ’85 machine guns but never intended to sell to the government.
In some cases, the people involved knew what they were doing was a crime. Since they have been caught, they have to do the time.
We can hope that their lawyers bring up Second Amendment protection issues that lead to good outcomes, I don’t believe we are there yet.
Comments
11 responses to “What the SOT, over.”
Good succinct explanation of everything and explains where the class 3 comes into play you see all the time.
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Unless they say I never intended to sell this item in some way, then the acquisition of a law letter i would think is an affirmative defense. Here is the proof I intended to demo and sell said thing via the existence of the letter that requests said thing and allows me to make said thing.
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Now building a thing without a law letter or a specific one, sure I can see the no bueno in that.
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Arguing intent with no evidence one way or the other? No way, should not be even entertained.
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More atf playing word games and playing with intent like with braces. More than likely sloppy verbiage and loose lips is what is getting these people. I still find that horseshit personally, but if you are dumb enough to express intent that is illegal, you may face the consequences.
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Now again if it is, hey if I don’t sell this thing I get to hold onto it, that isn’t expressing intent IMO. Just like saying, hey this etching of a lightning link could be turned into a lightning link doesn’t make it one. Word games go both ways and unfortunately as I said before, there was a time where deference was given to the person and not the gov.
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I should add that obviously my opinion and what is actually legal, moral, ethical, or otherwise right or correct has never constrained the actions of the gov. We all know it doesn’t necessarily matter if you are wrong, gov will grind you up and many people will take the plea to avoid the time and expense that causes.
I posted a link to the entire article on this subject in the other thread, I’ll post this interesting section of the Open Source Defense website –
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According to the plea agreement, from time-to-time Vickers would text one of his chief-of-police buddies and say, in effect, “Hey there’s this cool machine gun out there. If you jump through the hoop of writing me a letter saying that you’re at least theoretically interested in testing it out for your department, then I can order it and we can play with it.”
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Which seems … perfectly legal? Sure, it’s not the spirit of the law, but in court the letter of the law is what counts. As is tradition, Congress left it up to an administrative agency to write the actual details that matter. The ATF did so in 27 CFR § 479.105(d):
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“Subject to compliance with the provisions of this part, applications to transfer and register a machine gun manufactured or imported on or after May 19, 1986, to dealers qualified under this part will be approved if it is established by specific information the expected governmental customers who would require a demonstration of the weapon, information as to the availability of the machine gun to fill subsequent orders, and letters from governmental entities expressing a need for a particular model or interest in seeing a demonstration of a particular weapon.”
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So, if the police chief writes you a letter saying he’s interested in demoing a particular machine gun, you can buy it. Hmm, sounds like Vickers is still in the clear.
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The law is so vague that the ATF has had to release open letters explaining what they really meant when they wrote the regulation (which regulation was itself written by the ATF to explain what Congress really meant when it wrote the law). The latest open letter, from January 2023, says among other things that the police demo letter has to be “written on the government entity’s letterhead” and “dated within one (1) year of the date of the receipt of the application”. These are the formatting details that the ATF uses to discern your true intent.
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Another fun fact: the letter gets submitted to the ATF along with your application to transfer the machine gun. So Vickers got his demo letters over the years, submitted them to the ATF, the ATF approved them, and then years later the ATF looked into it and decided that when the police chief said he was potentially interested in demoing the guns, he wasn’t really interested enough. How much interest is enough? How serious does the police chief have to be? How would you even measure his seriousness? Can he change his mind later? It doesn’t say anywhere in the law, but the ATF is free to decide on the answer years after your purchase and then prosecute you accordingly.
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That raises the obvious question here: if this law is so indefensibly vague, then why did Vickers plead guilty?
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It turns out that the better question is why he wouldn’t plead guilty. For prosecutors, the broadness and vagueness of federal law is a feature. It means that everybody is guilty of violating a bunch of laws — especially in a domain as heavily regulated as machine gun imports — and prosecutors can simply decide who to charge.
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In practice, the way this works is that prosecutors get a hook into someone (for Vickers it was perhaps the sanctions violations) and then go looking for additional charges. Those will be easy to find, and then prosecutors come to the defendant and say, “We have 20 charges against you. Each one is punishable by five years in prison. You can go to trial and risk a 100-year prison term, or you can plead guilty, and we’ll ask the judge to let you off with a one-year stay at Club Fed.”
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Even a clearly innocent person (let alone a defendant who isn’t squeaky clean) would be crazy not to take that deal. And that’s the way it shakes out in real life — 98% of federal convictions are obtained through plea bargains. On paper there’s a right to a trial by jury. But in practice, 98% of convicts (including, now, Larry Vickers) were extorted into giving up that right.
I haven’t had a chance to read the article you posted yet, but yea it all seems built on a house of cards with ATF using the vagueness they have in the past to do anything they want. The most damning thing you wrote would be soliciting the law letter, which still states his intent to demo it and as you point out, seems perfectly legal. I would add, this is based on what you provided in your quotes.
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I would also point out as you touch upon, simply being charged with something and found to be in violation of something else or charged with something else after a fishing expedition is not new or really all that damning evidence of guilt. As the old saying goes, “I can indict a ham sandwich!” and we all also know that a person being actually in violation of any particular law or not has never actually stopped any government official who decided they wanted you for whatever reason.
One question- where did you get the information that “you can not make a dealer sample machine gun without a law enforcement letter saying the police want to buy them”??? I am an 07 manufacturer and SOT holder. I find nothing about this in my atf laws/regulations book given to me by the atf.. I have APPROVED form 2s on stuff in my possession as dealer samples.. MHO on this whole Larry Vickers thing is atf making an example of gun youtubers…
Curby, in the other article, you mentioned that you were a Type 07 FFL and a SOT holder. I requested that you give me feed back on this article.
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Regardless, are there any other corrections that should be made. Where I got it was from various internet sources and represents my understanding of how this worked. I do not have good references to what the requirements are for a 07 w/ SOT are to manufacture a machine gun. What are the rules on an 07 w/SOT making machine guns? Any references would be greatly appreciated.
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Thanks, AWA
I see in one of the comments it mentions a letter from atf in Jan ‘23 that leo chief letter has to be in 07s possession before making machine guns.. my friend got audited by atf recently and atf said this to him( he has 3 full autos) however atf did not cite him for nfa violation or sieze the guns, and had no answer when he asked why his form 2s were approved. I have 2 full autos myself, both form 2s approved overnight..This “letter” violation appears to me to be grandstanding by atf and “getting” conservative people in trouble to make examples of. My friend and I are low key guys.Im an 07 because atf suggested if Im restoring firearms I should have ffl. I got my SOT for the same reason and I want to make a line of reasonable priced suppressors as you can hunt with them here now. IF this letter thing gets legs we are prepared to destroy our FA guns and move on. I hope this helps.. when I get more on my end I will pass it on.
Well we also do know that atf hardly gives equal treatment and changes their mind as the wind blows. We also letters and ruling supposedly only apply to those that receive them. I personally have been advised, in writing, to take illegal action by the atf, only my good sense to consult a lawyer after prevented me from doing that.
It will be interesting to see what Loper Bright Enterprises v. Raimondo – should SCOTUS rule favorably for Loper Bright Enterprises and wind up abolishing Chevron – does to, and for, the CFR, especially in the arena of firearms.
Update- The Truth About Guns page has a good article about this mess. For yall that are busy the “Readers Digest” version is as follows- sometime in 2021 Larry Vickers let his SOT laspe( payment has to be in before 1 July) Feds raided him in October 2021 removed 146 machine guns. He was charged mainly with conspiracy to commit fraud in having false letters from police chiefs to IMPORT machine guns for sale to police. Some were transferred to unathuerized individuals.. and was charged with violating sanctions against importing russian firearms. Short version as above. Seems like lotsa dumb moves(allegedly!)… be careful yall..
TY for the update. If as reported, what a dumbass.
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atf not allowing a late payment if that was attempted is kind of a hard ass thing for now reason, but that seems like the least of his worries.
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Would like to know more about the letters, if it was a case of atf saying we don’t like you soliciting these, or if he simply fucked it up some other way.
Basically he had a couple chiefs write him letters claiming the police were interested in machine guns, one dept had SEVEN officers and no swat team the other had ONE.. The main thing is using fraudulent lettrrs to import guns and continuing to buy russian arms with sanctions in place. And no, there is no grace period on SOT payments…