Ownership of Machine Guns and/or Suppressors
Federal Law continues to allow legal ownership of both Machine Guns and Sound Suppressors (commonly referred to as “Silencers”). Each State may have further limitations or regulations that provide additional guidance for a particular situation although in Texas (for guns) we have seen no requirements any more restrictive than the rules for handguns. Our general information provided herein is limited to purchases made in Texas for Texas residents. However, our legal team may be able to provide assistance to you or your attorney if from out of state. Any advice that would be deemed legal in nature or for a particular situation would need to be provided specifically by our attorney. We do not and cannot provide specific legal advice although we can advise you of our understanding of the law(s) in general. The information provided below is from our legal counsel team.
The ownership, possession, control & transfer of National Firearm Act (NFA) weapons or items is regulated by law and often starts and finishes with the correct completion of forms that are submitted to and then returned to you (or your licensed firearms dealer). These forms are commonly referred to as Bureau of Alcohol Tobacco Firearms & Explosives agency (BATFE) forms. In general, if you are not prohibited from owning a gun and meet the age requirements set by law for ownership or possession, then you may apply for and likely receive the correct permit and federal tax stamp that allows for your ownership, use and control of the NFA items(s).
The forms that are submitted determine who “you” are.
Specifically, “you” can include an (1) individual person, (2) a corporation, (3) a limited liability company, (4) and other business structures including, but not limited to, a “Trust”. Each different “YOU” presents its own separate benefits and drawbacks. After looking at them all, the Trust seems presently to offer the best advantage for the application that you in one of the above forms may decide to submit.
Additionally, all of these methods require that you submit the appropriate fee along with your application and documentation of who “you” are to the government for each NFA item along with your application. Presently the fee for each NFA item is $200.00 on a one-time / lifetime transfer fee. The fee is to register and record the transfer of a presently licensed item to a new licensed person or business.
You must decide how you want to apply for and take title / possession of your NFA item(s).
If you apply as an individual, then you must get fingerprinted, photographed, find an appropriate law enforcement official to sign the form that basically says you are OK to have this weapon or item. These days, in some jurisdictions, that is impossible. Even if you can obtain the signature, many persons do not want their fingerprints and photographs being added to government data bases.
If you apply as a corporation or a limited liability company (or perhaps certain partnerships), then in most every case you may bypass the fingerprinting, and photographs, and obtaining the appropriate law enforcement official to sign for you, but then other costly matters are required. For example, you will likely need to have that business initially established and set up. You will need to file the documentation with the State Government such as the Texas Secretary of State. The filing fee alone for a corporation or LLC may be at least $300.00 and certain limited partnerships may be at least $750.00. (plus attorney fees, if needed). You may likely need to obtain a federal and state tax id number. You will be required to file annual reports with the State and perhaps a Federal Tax return. The business entity becomes a state record on file with ownership names and address. You will likely need an attorney or similar person to accomplish most of these ongoing tasks and pay the related ongoing costs. You will be required to file a State Franchise Tax report annually and periodic public information reports.
If you apply as the Trustee of a Trust, then under current law, it appears that you have the best of all worlds. In this case, you may bypass the finger printing, and photographs, and obtaining the appropriate law enforcement official to sign for you, (like the same benefit for corporations, LLC and certain partnerships above) but that’s where the similarities mainly end.
For example, with the attorney prepared trust you do not need to file anything with the State of Texas to establish the trust (which means no filing fees) nor do you need to file annual reports with the State of Texas. Your business remains private in most every situation unless you start other dealings (business activities within your trust). We expect that you would not do that.
Most trust are established as a revocable trust which, in most cases, require no annual reporting or filings of any kind. Your business simply remains your business in these cases.
What then is a NFA item trust?
In most cases, these trust are simply a legal document that creates and then provides for the legal rules and guidelines to be established in writing that in a nutshell say that you (within the terms of the trust) are the person(s) allowed to own, control and then ultimately dispose of the NFA item(s) under the rules established by law.
By way of example, and still another way to look at this matter is that first, the trust document establishes a name for the trust.
Let’s make a name up such as “The John Allen Smith III, Revocable NFA Trust”.
The trust document may state that the trust is purchasing a machine gun or silencer (and provide a seriel # and further description). The document may state that John Allen Smith III is the trustee and therefore he is the person that shall have legal authority to care for and use the NFA item(s). Note that strictly speacking, the NFA item(s) belongs to the trust (which is Mr. Smith’s trust). The trust document may state that on the death or disability of John Allen Smith III that the NFA item(s) go to his estate, surviving spouse, friend or relative.
The trust remains changeable or revocable during the lifetime of Mr. Smith so that he may add items to the trust, sell items from the trust or make different designations of beneficiaries or trustees.
We hope you find the above summary helpful.
In most cases, we will mail and track your trust document and BATFE papers tax stamp / permit fee for you. The legal cost of the trust set-up & the permit/stamp fee that you pay are a one-time lifetime fee. We suggest that it may be a good idea to keep a photocopy of your approved papers with your NFA item(s).
Our attorney & legal team has streamlined the process for obtaining and creating your trust (although you may still choose one of the other forms for ownership). The trust document is prepared at the attorney office in Houston, although we can direct you by link to the form that needs to be completed and that will be the basis for the entire trust document. It may be completed and submitted online by following the link.
For our customers, we have negotiated a rate, that we believe remains below that of other attorneys and for what we continue to see as comprehensive trust document (about 25 pages) that remains valid for ongoing submissions that we make to the BATFE on a weekly basis for our customers.
Occasionally, and for certain limited purchases, you may get an additional discount on the trust directly from us.