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October 12, 2015

NFA Forms and Records Retention—Staying Compliant as You Enter the Suppressor Market

My first post here on the NSSF retailer blog, regarding how to get started in transitioning your business from Title 1 firearms sales to one that also sells Class 3 silencers (also commonly referred to as suppressors), firearms and accessories, helped explain how the process was one that was both simple and straight-forward. If after you read that post you immediately completed and submitted your application, along with your check for $500, to ATF, by now it is very possible you have your 2016 SOT (Special Occupational Tax) license in hand and are ready to engage in this new and exciting aspect of your business model. The average wait time for receiving your license from ATF’s NFA (National Firearms Act) Branch runs three to six weeks, so if you haven’t received your new SOT license in the mail yet and it is beyond this timeframe, don’t hesitate to call the ATF’s NFA Branch on its main office line (304) 616-4500 and inquire about the status of your application.

Okay, SOT license in hand and ready to go, the first matter of business I’d recommend you attend to is to treat your entire NFA business as a business within your business. All files, paperwork and bound book acquisition and disposition records should be handled separately from your day-to-day (Title 1) regular firearms business. Not only will this be much more efficient for you and your store team operationally, but when ATF pays its inevitable compliance visit, you will be able to show the inspector your level of commitment to compliance by providing all the required records promptly and in an efficiently organized manner.

In talking about how to get started as a Class 3 dealer in my first article here, I mentioned the great deal of misinformation circulating around the industry regarding the complexities of being in this segment of the firearms business. Most of that misinformation centers on the complexity of the paperwork and record-keeping requirements for suppressors, short barreled rifles (SBRs), short-barreled shotguns (SBSs) and full-auto firearms. The reality though, is that these requirements aren’t very complex at all. In fact, in my experience, it’s much easier to be accurate with NFA paperwork than with the ATF Form 4473 you use multiple times a day.

There are six NFA forms you will hear about and from time to time may see in your store. The first two and their uses are:

  1. Form-1 (ATF F 5320.1) – Application to Make and Register a Firearm (Suppressors = Firearms)
    1. Non-Licensee making an NFA regulated Firearm
  2. Form-2 (ATF F 5320.2) – Notice of Firearms Manufactured or Imported
    1. Licensee making of NFA regulated firearms
    2. Typically utilized by Class 2 (manufacturer) SOT dealers with Type 07 FFL

The next two forms are the ones you should make yourself intimately familiar with. They will be the two most common your business will utilize as a Class 3 dealer, and successful completion of both are equally important in ensuring you are compliant when ATF inspects your records. If you have not already done so, take the time today to thoroughly review these two forms and ensure you understand what is required when filling out these forms. Your completion, submission and retention of these two forms in conjunction with your accurate and timely acquisition and disposition entries of merchandise in your bound book are the keys to your store’s NFA compliance program. These two forms and their uses are:

  1. Form-3 (ATF F 5320.3) is the Application for a Tax-Exempt Transfer
    1. Between SOT License Holders (i.e. Manufacturer to Distributor, Distributor to Dealer and Dealer to Dealer)
  2. Form-4 (ATF F 5320.4) being the application for a Tax Paid Transfer
    1. Between SOT Dealer and non-licensee = your customers

The last two forms you will use with less frequency than the others, but the need for them does arise more frequently than you might imagine. This is especially true of the form listed in No. 5, if you pursue and maintain regular business in Class 3 firearms and accessories with law enforcement agencies in your state or local area. These final two forms and their uses are:

  1. Form-5 – Application for Tax Exempt Transfer
    1. Transfer to a Government Entity from and SOT Licensee
    2. Transfer to a Lawful Heir
  2. Form-9 – Application and Permit for Permanent Exportation of Firearms

Form 3—Receiving Inventory

Let’s say you have your SOT license in hand, you’ve established store procedures for completing paperwork and other record-keeping tasks, and you’ve placed a stocking order. That order was approved by ATF and has just been delivered. Now what?

Form 3 is for use in receiving Class 3 merchandise. You will receive copies of the approved Form 3s from your supplier when Class 3 products you have purchased ship to and arrive at your place of business. That copy of the Form 3, as a matter of best practice, should be verified against the supplier’s invoice provided with the order when it is received and, most importantly, against the actual physical merchandise received. All information in the Form 3 and the supplier’s invoice should match exactly. Any discrepancy should be brought to the supplier’s attention immediately.

What do you do with merchandise that’s incorrect (either it doesn’t match what you ordered or doesn’t match the invoices, bills of lading or the Form 3?) After notifying your supplier, that supplier (the transferor) will contact the NFA Branch to have the Form 3 corrected. However, in working with the NFA Branch to correct such issues, you may need to send the incorrect product or the product improperly listed back to your supplier.

Each Form 3 received with each piece of incoming merchandise should be retained in your store files. These forms should be organized first by supplier, then within that supplier’s file in chronological order by the date ATF approved the transfer. You will need to retain these Form 3s for the life of your business.

DSC_0049Form 4—Your Customer Connection

You and your customer will complete the Form 4 and send everything required (trust documents or fingerprint cards, passport photos, Certifications of Compliance and your customer’s $200 tax payment) that allows the Form 4 to be processed with ATF. Both the Form 4 and the required supporting documentation must be submitted to ATF in duplicate (with the exception of the tax payment, of course) to the address provided on the front page of the Form 4. (Next month we will discuss the Form-4 in much greater detail.)

What Can a Customer Purchase with a Form 4?

Customers may purchase NFA-regulated merchandise from you as an individual, or they may also purchase them as part of a gun trust or LLC (limited liability corporation). While both avenues are available to the end consumer, the required information provided to ATF’s NFA Branch is considerably different for trusts and LLCs. We will look at these two different options in detail in a separate post.

You Still Need A Form 4473

For the sake of conversation here and its emphasis on record retention, let’s assume you and your customer completed the Form 4, submitted it to ATF and have received back the approved Form 4 from the NFA Branch. There is still one more ATF form that requires completion before you can complete the transfer to your customer. That form is the one you’re already most familiar with, the Form 4473.

Your customer needs to fill out Section A of the ATF F 4473, just as you need to fill out the dealer portion of this form as you would for any other firearm transaction. This is true even for suppressors, though with suppressors there are a few minor exceptions. These are:

  1. In Block 18, Type of Firearm, you the dealer will mark “Other.”
  2. You the dealer will not complete section 21, as you will not be calling NICS.
  3. You the dealer will Mark an “X” on Line 22, as no NICS check is required with the transfer of an NFA product. . (For Purchases by individuals – If your customer is using a trust please refer to the NFA Handbook Chapter 9.12.1 – you will need to complete a NICS Check)
  4. Section D, lines 26 through and including 30, should be completed by you the dealer to match your bound book information exactly. Therefore, on line 29 you should use “silencer,” “short-barreled rifle” or other appropriate descriptor of the NFA product being transferred.

Once the Form 4473 is complete, make a copy of the front page of the approved Form 4 and keep that copy with the completed 4473. You will file these two forms sequentially in their own separate file utilizing a new “Transferor’s Transaction Serial Number” sequence that you create and document in the appropriate space provided in the top right hand corner of the Form 4473.  As with your regular Title 1 firearms, you are free to create this new numbering system with what will work best for your recordkeeping procedures.  I would recommend utilized a sequence starting as “N150001,” indicating “N” for NFA, 15 for the current calendar year and 0001 as your progressive numbering system through 9999.


This should get you started as a new SOT/Class 3 dealer with your initial receipts of product into your inventory and sales to individual, non-law enforcement customers. But we are just scratching the surface of the subject matter here and will continue to dive deeper into the specifics in the months to come. Have questions about this article or other NFA-related questions? Email


Travis M. Glover is the Firearms Compliance and Risk Management Officer for Lipsey’s LLC, an NSSF member and one of this country’s leading wholesale distributors of firearms and accessories, including those such as suppressors that qualify as Class III merchandise. Glover has more than 20 years experience in the firearms industry, but over the past 11 years he has focused solely on developing and leading firearm’s compliance programs that have been sustainable and recognized as best-in-class. He currently sits on the Board of Directors for the American Suppressor Association, working closely with other industry leaders to further positive state legislation for legalization of suppressor ownership and hunting, in addition to the education of the FFL community regarding the many benefits of being licensed to sell Class III products.

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Tags: ATF Class 3 Dealers Compliance Form 4473 National Firearms Act NFA Forms records retention regulations retailers Special Occupational Tax Suppressors

Categories: Education, Ranges, Retailers