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The National Firearms Act ("NFA"), 73rd Congress, Sess. 2, ch. 757, 48 Stat. 1236, enacted 1934-06-26, currently codified as amended as 26 U.S.C. ch.53, is an Act of Congress passed in 1934 that, in general, imposes a statutory excise tax on the manufacture and transfer of certain firearms and mandates the registration of those NFA. The Act was passed shortly after the repeal of Prohibition. The NFA is Title II of the federal firearms laws. The Gun Control Act of 1968 ("GCA") is Title I.

All transfers of ownership of registered NFA firearms must be done through the federal NFA registry. The NFA also requires that transport of the NFA firearms across state lines by the owner must be reported to the Department of the Treasury (this function has since been transferred to the Department of Justice).

Contents

Background

The purpose of the 1934 National Firearms Act was to regulate what were considered "gangster weapons" such as machine guns and hand grenades. Then U.S. Attorney General Homer S. Cummings recognized that firearms could not be banned outright under the Second Amendment, so he proposed restrictive regulation in the form of a high tax and federal registration. Originally, pistols and revolvers were to be regulated as strictly as machine guns; towards that end, cutting down a rifle or shotgun to circumvent the handgun restrictions by making a concealable weapon was taxed as strictly as a machine gun.

Conventional pistols and revolvers were ultimately excluded from the Act before passage, but other concealable firearms were not: the language as originally enacted defined an NFA "firearm" as:

A shotgun or rifle having a barrel of less than eighteen inches in length or any other weapon, other than a pistol or revolver, from which a shot is discharged by an explosive if such weapon is capable of being concealed on the person, or a machinegun, and includes a muffler or silencer for any firearm whether or not such a firearm is included in the foregoing definition.[1 ]

Under the original Act, NFA "firearms" were machine guns, short barreled rifles (SBR), short barreled shotguns (SBS), any other weapons (AOW or concealable weapons other than pistol or revolver) and silencers for any type of firearm NFA or non-NFA. Minimum barrel length was soon amended to 16 inches for rimfire rifles and by 1960 had been amended to 16 inches for centerfire rifles as well. In recent years several SBRs, Winchester and Marlin "trapper" rifles made before 1934 with 14 or 15 inch barrels, were removed from the NFA (Title II), although they are still subject to Gun Control Act of 1968 (Title I).

In 1938 Congress recognized that the Marble Game Getter, a short .22/.410 sporting firearm, had "legitimate use" and did not deserve the stigma of "gangster weapon" and reduced the $200 tax to one dollar for the Game Getter. In 1960 Congress changed the transfer tax for all "any other weapon" (AOW) category to $5.[1 ] The transfer tax for machine guns, silencers, SBR and SBS remained at $200.

NFA categories have been modified by laws passed by Congress, rulings by the Treasury Department and regulations promulgated by the enforcement agency, ATF.

Categories of firearms regulated

The Act defines a number of categories of regulated firearms. These firearms are collectively known as NFA firearms and include the following:

Machine guns - this includes any firearm which can fire more than 1 cartridge per trigger pull. Both continuous fully-automatic fire and "burst fire" (i.e., firearms with a 3-round burst feature) are considered machine gun features.

Short barreled rifles (SBRs) - this category includes any firearm with a buttstock and either a rifled barrel under 16" long or an overall length under 26". The overall length is measured with any folding or collapsing stocks in the extended position. The category also includes firearms which came from the factory with a buttstock that was later removed by a third party.

Short barreled shotguns (SBSs) - this category is defined similarly to SBRs, but the length limit for the barrel is 18" instead of 16", and the barrel must be a smoothbore. The minimum overall length limit remains 26".

Suppressors - this includes any portable device designed to muffle or disguise the report of a portable firearm. This category does not include non-portable devices, such as sound traps used by gunsmiths in their shops which are large and usually bolted to the floor.

Destructive Devices (DDs) - there are two broad classes of destructive devices:

  • Any non-sporting firearm with a bore over 0.50", such as a 40mm grenade launcher often used in conjunction with military rifles. (Many firearms with bores over 0.50", such as 12-gauge shotguns, are exempted from the law because they have been determined to have a legitimate sporting use.)

Any Other Weapons (AOWs) - this is a broad "catch-all" category used to regulate any number of firearms which the ATF deems deserving of registration and taxation. Examples include, among others:

  • Smooth-bore pistols
  • Short-barreled firearms with both rifled and smooth bores, etc.
  • Disguised firearms
  • Firearms that can be fired from within a wallet holster or a briefcase
  • A short-barreled shotgun which came from the factory with a pistol grip is categorized as an AOW rather than a SBS, because the Gun Control Act describes a shotgun as “…designed or redesigned to be fired from the shoulder…”
  • Handguns with a forward vertical grip. It is therefore illegal to place an aftermarket foregrip on any pistol without first registering it as an AOW and paying the $200.00 "making tax" imposed by the Act.

In general, certain components that make up an NFA item are considered regulated. For example, each baffle inside a silencer, if removed from the tube, is considered a silencer. Such silencer parts may only be possessed by Class-II manufacturers. An individual cannot even repair a silencer –– it must be returned to a Class-II manufacturer for repairs.Thus, individuals cannot legally own any part of a silencer without registering it with the BATFE and paying NFA taxes.

Silencers and machine guns are the most heavily regulated. For example, in Ruling 81-4, BATFE declared that any AR-15 Drop-in Auto-Sear (DIAS) made after November 1, 1981 is itself a machine gun, and is therefore subject to regulation.[2] While this might seem to mean that pre-1981 sears are legal to possess without registration, BATFE closes this loophole in other publications, stating, "Regardless of the date of manufacture of a drop in auto sear, possession of such a sear and certain M-16 fire control parts is possession of a machinegun as defined by the NFA. Specifically, these parts are listed as “(a) combination(s) of parts” designed “Solely and exclusively” for use in converting a weapon into a machinegun and are a machinegun as defined in the NFA." ATF machinegun technology letters written between 1980 and 1996 by Edward M. Owen – the then-chief of the ATF technology division defined “solely and exclusively” in all of his published and unpublished machinegun rulings with specific non-ambiguous language.

Owning the parts needed to assemble other NFA firearms is generally restricted. An individual cannot own or manufacture certain machine gun trigger (fire-control) components unless he owns a registered machine gun. The M2-Carbine trigger pack is such an example of a “combination of parts” that is a machinegun in and of its own. Most of these have been registered as they were pulled from surplus rifles in the early 1960’s.

Most current fully-automatic trigger groups will not fit their semi-automatic firearm look-alike counterparts – the semi-automatic version is specifically constructed to reject the fully-automatic trigger group by adding metal in critical places. This addition is required by the ATF to prevent easy conversion of Title I firearms into machine guns. Additionally, some fully-automatic trigger groups are also permanently modified in such a way that they can no longer be made to function as fully-automatic fire control devices. The ATF has listed required manufacturing procedures for modifying these fully-automatic trigger groups to make them into legal semi-automatic trigger-groups for civilian sales.

For civilian possession, all machineguns must have been manufactured prior to May 19, 1986 to be civilian legal. These machinegun prices have drastically escalated in value, and are literally “worth their weight in gold” – especially like registered sears and conversion-kits. Only a Class-II manufacturer (a FFL holder licensed to manufacture firearms or Type-07 license that has paid a Special Occupational Tax Stamp or SOT) can manufacture machineguns after that date, and they can only be sold to Government, law-enforcement, and military entities. Transfer can only be done to other SOT FFL-holders, and such FFL-holders must have a “demo-letter” from a respective Government agency to receive such machineguns. Falsification and/or misuse of the “demo-letter” process can and has resulted in long jail sentences and felony convictions for respective violators.

All NFA weapons made by individuals require that the weapon be legal in the State or municipality where the individual lives, and the payment of a $200.00 “making tax” prior to manufacture of the weapon, although a subsequent TRANSFER of AOW’s after they are legally “made” is only $5.00. Only a Class-II manufacturer (a FFL holder licensed as a “Manufacture of Firearms” or Type-07 license that has paid a Special Occupational Tax Stamp or SOT) can manufacture NFA firearms (other than destructive devices) making-tax free.

A Destructive Device manufacturing license or Type-10 FFL holder can manufacture destructive devices making-tax free. However a type-07 license costs $150.00 for three years –– whereas a Type-10 destructive manufacturing license costs $3000.00 for three years. Both licenses still require the payment of the $500.00 (reduced-rate) Special Occupational Tax Stamp or SOT, (or the $1000.00 full tax) per year to conduct manufacturing of NFA weapons that they are respectively qualified to manufacturer. The SOT “reduced rate” applies to a business whose sales are less than $500,000.00 per year.

Owning both a short barrel and a legal-length rifle could be construed as intent to build an illegal, unregistered SBR. This possibility was contested and won in the U.S. Supreme Court case of United States v. Thompson-Center Arms Company. BATFE lost the case, and was unable to prove that possession of a short barrel for the specific pistol configuration of a Thompson Contender is illegal. However, some experts have warned that the ruling applies only to the specific brand of firearm mentioned in the court case, and BATFE still warns against possession of a short barrel for a rifle not registered as an SBR.

Removal of a firearm from classification as an NFA firearm, such as the reclassification of the original Broomhandle Mauser with shoulder stock from "short barrel rifle" (SBR) to a curio or relic handgun, changed its status as a Title II NFA firearm but did not change its status as a Title I Gun Control Act firearm.

Muzzle-loading firearms are exempt from the Act (as they are defined as 'Antique Firearms' and are not considered 'Firearms' under either the GCA or the NFA). Thus, though common muzzle-loading hunting rifles are available in calibers over 0.50", they are not regulated as destructive devices. Muzzle-loading cannons are similarly exempt since the law draws no distinction between the size of the muzzle-loading firearms; thus it is legal for a civilian to build muzzle-loading rifles, pistols, cannons and mortars with no paperwork. While an 'antique firearm' is not considered a 'firearm' under the NFA, some states (such as Oregon) have laws that specifically prohibit anyone from owning/obtaining an 'antique firearm' that could not otherwise own/obtain an GCA or NFA defined 'firearm' (i.e., felons, recipients of dishonorable discharge from military service, the mentally adjudicated, etc.)

Individuals or companies seeking to market large-bore firearms may apply to the ATF for a "Sporting Clause Exception." If granted, the ATF acknowledges that the firearm has a legitimate sporting use and is therefore not a destructive device. Many large safari rifle calibers, such as .585 Nyati and .577 Tyrannosaur, have such exceptions.

Registration, purchases, taxes and transfers

It is a common misconception[3] that an individual must have a "Class 3 License" in order to own NFA firearms. An NFA license is required for a Special Occupation Taxpayer (SOT): Class 1 importer, Class 2 manufacturer or Class 3 dealer in NFA firearms, not an individual owner. Legal possession of an NFA firearm by an individual requires transfer of registration within the NFA registry. An individual owner does not need a NFA dealer license to buy Title II firearms. The sale and purchase of NFA firearms is, however, heavily taxed and regulated, as follows:

All NFA items must be registered with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Private owners wishing to purchase an NFA item must obtain permission from the ATF, obtain a signature from the county sheriff or city or town chief of police (not necessarily permission), pass an extensive background check to include submitting a photograph and finger prints, fully register the firearm, receive ATF written permission before moving the firearm across state lines, and pay a tax. The request to transfer ownership of an NFA item is made on an ATF Form 4.[4]

NFA items may also be transferred to corporations (or other legal entities such as a trust). When the paperwork to request transfer of an NFA item is initiated by an officer of a corporation, a signature from local law enforcement is not required, and fingerprint cards and photographs do not need to be submitted with the transfer request. Therefore, an individual who lives in a location where the chief law enforcement officer will not sign a transfer form can still own an NFA item if he or she owns a corporation. This method has downsides, though, since it is the corporation (and not the principal) that owns the firearm. Thus, if the corporation ever dissolves, it must transfer its NFA firearms to the owners. This event would be considered a new transfer and would be subject to a new transfer tax.

US National Firearms Act Stamp, affixed to transfer forms to indicate tax paid.

The tax for privately manufacturing any NFA firearm (other than machineguns, which are generally illegal to manufacture) is $200. Transferring requires a $200 tax for all NFA firearms except AOW's, for which the transfer tax is $5 (although the manufacturing tax remains $200).

Dealers who pay a special yearly occupational tax are exempt from these taxes for transfers to or from other special occupational taxpayers (SOT's). Only a Class 2 manufacturer can “make and register” a machine gun –– and that gun becomes a Post May-19th, 1986 Gun –– salable only to police, State, local, Federal-Government, and the military. Low volume Class 2 manufacturers (those with sales under $500,000.00) pay the $500.00 per year SOT tax, while high sales volume Class 2’s pay the full $1,000.00 SOT “ticket” price.

Transferable machine guns made or registered before May-19th 1986 are worth far more than their original, pre-1986 value. And items like registered “auto-sears,” “lightning-links,” trigger-packs, trunnions, and other “combination of parts” registered as machineguns before the aforementioned date are often worth nearly as much as a full registered machine gun. For instance, as of September 2008, a transferable M16 rifle costs approximately $11,000 to $18,000, while a transferable "lightning-link" for the AR-15 can sell for $8,000 to $10,000. New manufacture M-16s sell to law enforcement and the military for around $600 to $1000.

The registration or transfer process (to an individual or corporation) takes approximately 1–3 months to complete. Additionally, the firearm can never be handled or transported by any other private individual unless the firearm's registered owner is present. Corporations which own NFA firearms can loan them to any employee of the corporation with a letter of permission on the corporate letterhead. NFA items owned by trusts may be legally possessed by any trustee (ie, if a husband and wife are both trustees, either of them may use and transport the firearm without the other present).

Upon the demand of any ATF agent, the registered owner must produce the original ATF Form with tax stamp affixed to prove the firearm is legally owned. Technically speaking, owners are not required to produce the form for any non-ATF personnel (i.e., local police officers do not have the legal right to demand to see the form). However, in practice, most NFA firearm owners keep a photocopy of their paperwork with the firearm at all times, and will show it to any authority that requests it to avoid legal issues. Many owners keep the original form in a safe place, such as a safe deposit box, to avoid damaging it, as the ATF will not replace a damaged $200 tax stamp.

In a number of situations, an NFA item may be transferred without a transfer tax. These include sales to government agencies, temporary transfers of an NFA firearm to a gunsmith for repairs, and transfer of an NFA firearm to a lawful heir after the death of its owner. A permanent transfer, even if tax-free, must be approved by the ATF. The proper form should be submitted to ATF before the transfer occurs. For example, lawful heirs must submit a Form 5 and wait for approval before taking possession of any NFA item willed to them. Temporary transfers, such as those to a gunsmith or to the original manufacturer for repair, are not subject to ATF approval since they are not legally considered transfers. The ATF does, however, recommend filing tax-free transfer paperwork on all such temporary transfers, to confer an extra layer of legal protection on both the owner and the gunsmith.

Criminal conduct

The Act makes certain conduct a criminal offense, including but not limited to: engaging in business as a manufacturer, importer, or dealer with respect to firearms without having registered or paid a special occupational tax; receiving or possessing a firearm transferred to oneself in violation of the NFA; receiving or possessing a firearm made in violation of the NFA; receiving or possessing a firearm not registered to oneself in the National Firearms Registration and Transfer Record; transferring or making a firearm in violation of the NFA; or obliterating, removing, changing, or altering the serial number of the firearm.[5]

Criminal penalties

Violations of the Act are punishable by up to 10 years in federal prison and forfeiture of all devices or firearms in violation, and the individual's right to own or possess firearms in the future. The Act provides for a penalty of $10,000 for certain violations.[6] A willful attempt to evade or defeat a tax imposed by the Act is a felony punishable by up to five years in prison and a $100,000 fine ($500,000 in the case of a corporation or trust), under the general tax evasion statute.[7] For an individual, the felony fine of $100,000 for tax evasion could be increased to $250,000.[8]

Exceptions

The United States Supreme Court has ruled in Haynes v. United States that the Fifth Amendment to the United States Constitution exempts felons—and, by extrapolation, all other prohibited possessors—from the registration requirements of the Act.

However, the prohibited person can still be charged under the Gun Control Act of 1968 for being a prohibited person in possession of a (any) firearm.

The market for NFA items

Importation of NFA firearms was banned by the 1968 Gun Control Act which implemented a "sporting" clause. Only firearms judged by ATF to have feasible sporting applications can be imported for civilian use. Licensed manufacturers of NFA firearms may still, with the proper paperwork, import foreign NFA firearms for research and development purposes, or for government use.

The domestic manufacture of new machine guns that civilians could purchase was effectively banned by language in the Firearm Owners Protection Act of 1986 (also known as "McClure-Volkmer"). The language was added in an amendment from William J. Hughes and referered to as the Hughes Amendment.[9] Machine guns legally registered prior to the date of enactment (i.e. May 1986) are still legal for possession by and transfer among civilians where permitted by state law. The static and relatively small number of transferable machine guns has caused their price to rise, often over $10,000, although transferable Mac-10 and Mac-11 submachine guns can still be purchased for around $3,500. Machine guns manufactured after the FOPA's enactment can be sold only to law enforcement and government agencies, exported, or held as inventory or "dealer samples" by licensed manufacturers and dealers. Machine guns made after 1986 for law enforcement but not transferable to civilian registration are usually priced only a few hundred dollars more than their semi-automatic counterparts, whereas a pre-Hughes Amendment registered machine gun that can be legally transferred commands a huge premium.

The Hughes Amendment affected only machine guns. All other NFA firearms are still legal for manufacture and registration by civilians under Form 1, and transfer of registration to civilians under Form 4 (though some states have their own laws governing which NFA firearms are legal to own there). Suppressors and SBRs are generally the most popular NFA firearms among civilians, followed by SBSs, DDs, and AOWs. While most NFA firearms are bought from manufacturers and transferred to civilians through a Class 3 dealer, many are made by the civilians themselves after filing a Form 1 and paying the $200 manufacturing tax. In some cases the manufacture is simple (i.e., using a pipe cutter to shorten a shotgun barrel), and sometimes quite complex (making an effective, modern silencer generally requires several thousand dollars' worth of machine tools).

Miller case

In 1938, the United States District Court for the Western District of Arkansas ruled the statute unconstitutional in United States v. Miller. The defendant Miller had been arrested for possession of an unregistered short double-barreled shotgun, and for "unlawfully...transporting [it] in interstate commerce from Claremore, Oklahoma to Siloam Springs, Arkansas" which perfected the crime.[10] The government's argument was that the short barreled shotgun was not a military-type weapon and thus not a "militia" weapon protected by the Second Amendment, from federal infringement. The District Court agreed with Miller's argument that the shotgun was legal under the Second Amendment.

The District Court ruling was overturned on a direct appeal to the United States Supreme Court (see United States v. Miller). No brief was filed on behalf of the defendants, and the defendants themselves did not appear before the Supreme Court. No evidence that such a firearm was "ordinary military equipment" had been presented at the trial court (apparently because the case had been thrown out—at the defendants' request—before evidence could be presented), and the Supreme Court indicated it could not take judicial notice of such a contention.

The Supreme Court reversed the District Court and held that the NFA provision (criminalizing possession of certain firearms) was not violative of the Second Amendment's restriction and therefore was not unconstitutional.

Subsequent rulings have been allowed to stand, indicating that short-barreled shotguns are generally recognized as ordinary military equipment if briefs are filed (e.g., see: Cases v. United States[11]), describing use of short-barreled shotguns in specialized military units.

Uncertainty after Miller and after passage of Montana House Bill 246

The scope of the application of the Act to privately constructed firearms or devices is uncertain. Such items would normally be regulated under the Act's provisions, but are intended for private ownership only and not for sale. As the Act's application is derived from the federal legislature's Constitutionally enumerated power of regulation over interstate commerce, it is unclear how privately-constructed firearms or devices built solely for personal possession (i.e. not intended to be delivered into the stream of interstate commerce) are affected by the Act. It would seem they are regulated under the Supreme Court's interpretation of Wickard v. Filburn[12] which establishes that even activities that occur solely intrastate could have such a substantial effect upon interstate commerce that failure to regulate such commerce would defeat congress' right to regulate interstate commerce.

In the landmark 1995 case of United States v. Lopez, the first decision in six decades to invalidate a federal statute on the grounds that it exceeded the power of the United States Congress under the Commerce Clause of the United States Constitution, the Supreme Court described Wickard v. Filburn as "perhaps the most far reaching example of Commerce Clause authority over intrastate commerce." The Supreme Court majority that decided the 2005 case Gonzales v. Raich relied heavily on Filburn in upholding the power of the federal government to prosecute individuals who grow their own medicinal marijuana pursuant to state law. In Raich, the court held that, as with the home grown wheat at issue in Filburn, home grown marijuana is a legitimate subject of federal regulation because it competes with marijuana that moves in interstate commerce. As the Court explained in Gonzalez:

Wickard thus establishes that Congress can regulate purely intrastate activity that is not itself “commercial,” in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.

Montana House Bill 246, the Montana Firearms Freedom Act, was signed into law by Governor Brian Schweitzer on April 15, 2009, and became effective October 1, 2009. This legislation declares that certain firearms and firearms accessories manufactured, sold, and kept within the state of Montana are exempt from federal firearms laws, since they can not be regulated as interstate commerce.[13][14] However, this law does not apply to a firearm that cannot be carried and used by one person, a firearm that has a bore diameter greater than 1½ inches and uses smokeless powder, ammunition that uses exploding projectiles or fully automatic firearms. While it is likely to face a court challenge, this Montana law would put firearms accessories such as suppressors actually made in Montana, marked "Made in Montana", and sold only to Montana citizens outside federal jurisdiction and not subject to the $200 federal transfer tax.

See also

Notes

  1. ^ a b R.L. Wilson, The Official Price Guide to Gun Collecting", House of Collectibles, Crown Publishing Group, New York, 2000. Eric M. Larson, "U.S. Smoothbore Pistols Designed to Fire Shotgun Shells", pp.68-71.
  2. ^ http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=7th&navby=docket&no=973748
  3. ^ http://www.atf.gov/firearms/faq/faq2.htm ATF Frequently Asked Questions: Section M. FIREARMS - NATIONAL FIREARMS ACT (NFA).
  4. ^ ATF Form 4
  5. ^ 26 U.S.C. § 5861.
  6. ^ 26 U.S.C. § 5871
  7. ^ 26 U.S.C. § 7201.
  8. ^ See 18 U.S.C. § 3571(b)(3).
  9. ^ Gun Law News - Firearm Owners Protection Act of 1986, http://www.gunlawnews.org/FOPA-86.html, retrieved 2007-09-14  
  10. ^ Miller, at p. 175
  11. ^ 131 F.2d 916, 922 (1st Cir. 1942).
  12. ^ 317 US 111 (1942)
  13. ^ Deines, Kahrin. "New Gun Law Aimed at Asserting Sovereignty", Helena Independent Record, April 16, 2009
  14. ^ Text of House Bill 246, 2009 Montana Legislature

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