ATF on Retention of Registered Machineguns by Licensees Who Discontinue Business

ATF on Retention of Registered Machineguns by Licensees Who Discontinue Business
Bureau of Alcohol, Tobacco, Firearms and Explosives

Washington, DC –-( Licensees who are qualified to deal in National Firearms Act (NFA) weapons who decide not to renew their payment of special (occupational) tax (SOT) may not retain and must dispose of any registered machineguns where the possession of the machinegun is restricted by 18 U.S.C. § 922(o).

In accordance with 27 CFR § 479.105(f ), prior to going out of business, the machineguns may be transferred to a Federal, State, or local governmental entity (including ATF), to a qualified manufacturer or importer, or to a qualified dealer as a sales sample in accordance with section 479.105(d).

The weapons may also be exported in accordance with the regulations at 27 CFR § 479.114-479.119.

These transfers must occur before the expiration of the license and SOT status. Otherwise, the restricted machineguns are subject to seizure and forfeiture.

Licensee may retain machineguns that were lawfully possessed prior to May 19, 1986, the effective date of 18 U.S.C. § 922(o), provided they were registered in accordance with requirements of the NFA. Sole proprietor licenses who discontinue business, but who wish to retain such weapons, must make an entry in the acquisition and disposition book showing the disposition of the machinegun to him/her as an individual.

Licensees that are legal entities, such as corporations, Limited Liability Companies or partnerships, that intend to dissolve may not retain any NFA firearms, as the entity will cease to exist. All NFA firearms must be properly transferred and registered to the person receiving the firearms prior to dissolution, and all dispositions are subject to record-keeping requirements of the Gun Control Act and NFA.

Licensees that are legal entities who wish to dispose of a firearm to an employee must have the individual complete an ATF Form 4473, submit the applicable NFA transfer form, and pay any applicable NFA transfer tax.

If imported as ‘pre-1986 sales samples,’ such machine-guns are still subject to the import restrictions of the NFA and may only be transferred to law enforcement agencies or licensees who have a current SOT listed on the applicable NFA transfer form.

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