To deal in, repair, make or import firearms as a business, you need a federal firearms license (FFL) from ATF. To deal in or make NFA items such as suppressors and machine guns, you also pay the Special Occupational Tax (SOT). Pathfinder Defense holds 07 FFL/02 SOT, 08 FFL/01 SOT and 10 FFL/02 SOT licenses plus federal explosives licenses (FEL 20 and FEL 23), so this is the path we walked ourselves.
1. Pick the right license
Fees are ATF's, for a three-year license.
| Type | What it covers | Application | Renewal |
|---|---|---|---|
| 01 | Dealer in firearms, including gunsmiths | $200 | $90 |
| 02 | Pawnbroker in firearms | $200 | $90 |
| 03 | Collector of curios and relics (not a business license) | $30 | $30 |
| 06 | Manufacturer of ammunition | $30 | $30 |
| 07 | Manufacturer of firearms other than destructive devices (can also sell what it makes) | $150 | $150 |
| 08 | Importer of firearms other than destructive devices | $150 | $150 |
| 09 | Dealer in destructive devices | $3,000 | $3,000 |
| 10 | Manufacturer of destructive devices, their ammunition, or armor-piercing ammunition | $3,000 | $3,000 |
| 11 | Importer of destructive devices, their ammunition, or armor-piercing ammunition | $3,000 | $3,000 |
You don't need an FFL to sell ammunition only. Each place of business needs its own license.
2. Add the SOT if you will handle NFA items
- Class 1 (importer) and Class 2 (manufacturer): $1,000 a year, or $500 if your total gross receipts for the last tax year were under $500,000. Either class can also deal in NFA items.
- Class 3 (dealer): $500 a year.
- The SOT year runs July 1 to June 30. It is due before you start and every July 1, it is not prorated, and you file it on ATF Form 5630.7.
- The SOT pairs with your FFL: Class 1 with an importer license (08 or 11), Class 2 with a manufacturer license (07 or 10), and Class 3 with a dealer license (01, 02 or 09).
- New in 2026: the NFA tax on suppressors, SBRs, SBSs and AOWs is now $0, and ATF stopped requiring registration for them on October 9, 2026. A business dealing in them still owes the SOT. See our 2026 NFA guide.
3. Apply
- Get local approval first. Your premises must meet state and local law, zoning included. A home business is allowed where local rules permit it.
- File ATF Form 7 (5310.12) online through ATF eForms or on paper, with the fee. Every responsible person (owners, partners, officers and managers) sends fingerprints and a photo.
- Send a copy to your chief local law enforcement officer. The form requires it.
- Meet the investigator. An ATF Industry Operations Investigator interviews you, usually at the premises, and goes over the records and rules.
- Wait for the decision. ATF approves or denies a properly completed application within 60 days. If you are denied, ATF tells you why in writing and refunds the fee.
4. After the license arrives
- Records: keep an acquisition and disposition record, and a Form 4473 with a NICS check for every sale to a non-licensee.
- Excise tax for manufacturers: the federal firearms and ammunition excise tax is 10% of the sale price on pistols and revolvers and 11% on other firearms and ammunition, filed with TTB.
- Export and ITAR: if you make items on the U.S. Munitions List, such as machine guns or suppressors, you also register with the State Department's Directorate of Defense Trade Controls.
- Renewal: every three years. ATF mails the renewal (Form 8 Part II) about 90 days before your license expires.
The full guide
Licensed to Build: The Complete Guide to Federal Firearms and Explosives Licensing covers every license, every form and every deadline: all nine FFL types and the SOT, explosives licenses and magazines, the NFA, records and ATF inspections, excise tax, importing and exporting under ITAR, and selling to the government.
Sources
- ATF, Federal Firearms Licenses (license types, fees and processing)
- 27 CFR 479.32, Special (occupational) tax rates
- ATF, Update to NFA Transfer Guidance (October 2026)
This guide is general information, not legal advice. Fees and rules change, so check atf.gov before you apply.