NFA Ownership

Silencers have been regulated since the 1934 NFA (National Firearms Act) was passed and the NFA placed a $200 tax on the transfer of any item described in the National Firearms Act (silencers, short barreled rifles, short barrel shotguns, pen guns, cane guns, machineguns).

 

Buying a Title II item from a local dealer
Buying a title II item is not difficult. You will need to fill out some forms and, send the forms to the BATFE with a check for $200. Then simply wait for the forms to be approved.

As of 2015 waiting time on a Form 4 is 6-8 months.  If you are not a patient person, owning a NFA item may not be for you.  The manufacturer, dealer nor individual have any control over this.

The local dealer will help the buyer fill out the transfer form (5320.4 -“From 4”). The dealer will also help the buyer fill out another form called the Citizenship form (5330.2). This form identifies the buyer either as a United States citizen or a legal resident alien. The dealer will then give the buyer some  fingerprint cards. The buyer must take the fingerprint cards to a local law enforcement department and be fingerprinted.

The next step for the buyer is to get two passport size photos and attach them to the Form 4. The final step is to take the Form 4 to the local (Chief Law Enforcement Officer) for the county in which the buyer lives. The CLEO must sign the Form 4 before the form can be sent to the BATFE.

When the forms are approved by the BATFE they are sent back to the selling dealer. The dealer then calls the buyer to come pick up the NFA item.

Buying a Title II item from an out of state dealer
Buying an NFA item from an out of state dealer is just as easy as buying one from a local dealer. You pay the out of state dealer for the NFA item, and select a local Class 3 dealer. The out of state dealer will then transfer the silencer to your local Class III dealer on a Form 3 (tax free). So, you still need to use a local dealer. The local dealer will handle your transfer on the Form 4 ($200 tax). These Form 3s and Form 4s are explained later in the article.

Buying out of state will save you on the sales tax, but you’ll pay your local dealer a fee for handling the transfer. Transfer fees are usually $75 to $150.

Transfers to individuals
Form 4 transfers to individuals require fingerprint cards, passport photos, and CLEO signature.

Transfers to corporations
If a corporation is buying the NFA item, instead of sending passport photos and fingerprint cards with the Form 4, the buyer will send one copy of the corporation’s articles of incorporation. On the Form 4 the buyer’s name will be the legal company name. No CLEO signature is required for a Form 4 transfer to a corporation.

There are a few unique things regarding corporate ownership of NFA items. A corporation typically has some annual maintenance. Corporations must be renewed. There is typically a fee for renewal. What happens to the NFA items if you fail to renew the corporation on time? Depending on the type of corporation, there may be tax implications for the NFA items.

A good thing about corporate NFA ownership is that any authorized corporate officer can possess the NFA item. So, if a couple members owned the corporation they could effectively share the silencer. For an individually owned silencer, the owner must be present when the silencer is being used.

Transfers to Trusts
A Trust is an estate planning tool. It is also another legal entity that can own NFA items. It is a simple task to setup a basic Revocable Living Trust. A Revocable Trust is that, as its name indicates, it can be altered at any time. Trustees and assets can be added, changed or removed by the grantor of the Trust.

Transferring a silencer to a Trust is similar to a corporation transfer. The Form 4 must be completed using the Trust’s name as the buyer. No fingerprint cards or passport photos are needed and the CLEO signature is also not required. A notarized copy of the Declaration of Trust (or a Certification of Trust) is sent with the Form 4.

What is a Form 3?
The Form 3 is the transfer form typically used to transfer an NFA item tax-free (meaning no $200 tax to BATFE) between manufacturers and dealers or from dealer to dealer. This is how dealers transfer items to other dealers in another state

What is a Form 4?
The Form 4 is the transfer form used to transfer an NFA item from a seller to a buyer. The form contains information about the NFA item (such as a description of the item, serial number, manufacturer, etc.), information about the seller and information about the buyer. On the back of the form are some questions very similar to the questions found on a 4473 form used to transfer a firearm to a buyer.

Make copies of the Form 4
The Form 4 is a tax document. As such, the NFA item owner is not compelled by any law to disclose information on the form. However, it is strongly advised that the owner keep a copy of the Form 4 with the NFA item at all times. Keep the original copy of your Form 4 in a safe place.

CLEO signature
CLEO (Chief Law Enforcement Officer) signature is required on the Form 4 for transfers to an individual. The CLEO is only signing the form indicating there is no known reason the buyer should not be allowed to own or possess NFA items. The CLEO is not accepting any responsibility for future actions of the buyer.
The Chief Law Enforcement Officer (CLEO) who signs the Form 4 can be any of the following people:
Sheriff
Chief of Police
Head of State Police Agency
District Attorney
A judge with the power of arrest
Any other law enforcement officer approved for this procedure by the National Firearms Act branch of the BATFE.

CLEO signature is not required on the Form 4 for transfers to corporations and Trusts.

 

NFA Trust

Gun Trust Guru