National Firearms Act (NFA) — Regulated Firearms and Transfer Tax

The National Firearms Act of 1934 (NFA) — codified in the Internal Revenue Code at 26 U.S.C. §§ 5801–5872 — is the federal law that governs the manufacture, transfer, and possession of a defined category of firearms including machine guns, silencers (legally called "suppressors"), short-barreled rifles (SBRs), short-barreled shotguns (SBSs), destructive devices (grenades, explosives, cannon over .50 caliber), and "any other weapons" (AOWs) such as concealable pistols with a second grip. To transfer any NFA item, the transferor must file an application with the ATF, pay the applicable transfer tax, receive ATF approval, and the firearm is registered to the new owner in the National Firearms Registration and Transfer Record (NFRTR) — the federal registry maintained by ATF. The One Big Beautiful Bill Act (Pub. L. 119-21, signed July 4, 2025) reduced the NFA transfer and making tax to $0 for suppressors, SBRs, SBSs, and AOWs effective January 1, 2026; the $200 tax remains for machine guns and destructive devices. All other NFA registration, background check, and Form 1/Form 4 requirements continue to apply unchanged. Possession of an unregistered NFA item remains a federal felony carrying up to 10 years in prison. Currently, approximately 5.6 million NFA items are registered in the NFRTR, with suppressors comprising the largest and fastest-growing category.

Current Law (2026)

Parameter	Value
Core statute	26 U.S.C. §§ 5801–5872 (National Firearms Act; IRC Chapter 53)
Administering agency	Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
Transfer tax (machine guns, destructive devices)	$200 per transfer
Transfer tax (suppressors, SBRs, SBSs, AOWs)	$0 effective Jan 1, 2026 (OBBBA, Pub. L. 119-21)
Making tax (manufacturing an NFA item)	$200 for machine guns/destructive devices; $0 for suppressors, SBRs, SBSs, AOWs (post-OBBBA)
Occupational tax — importer/manufacturer	$1,000/year ($500/year for entities with <$500,000 gross receipts)
Occupational tax — dealer	$500/year
Registry	National Firearms Registration and Transfer Record (NFRTR), maintained by ATF
Machinegun manufacture ban	No new machine guns may be registered for civilian ownership after May 19, 1986 (Hughes Amendment to FOPA 1986)
Approval time (Form 4 individual transfers)	Approximately 60–120 days (eForm 4 electronic); historically 8–12 months (paper Form 4)
Suppressor ownership	Legal in 42 states for civilians (8 states prohibit: CA, DE, HI, IL, MA, NJ, NY, RI)

Legal Authority

26 U.S.C. § 5801 — Imposition of occupational tax: every importer, manufacturer, and dealer in firearms must pay annual special occupational tax ($1,000 for importers/manufacturers; $500 for dealers; reduced rates for smaller businesses) before engaging in business
26 U.S.C. § 5802 — Registration of importers, manufacturers, and dealers: all FFLs (Federal Firearms Licensees) must register with ATF, including name, trade name, and address of each business location; initial registration requires photograph and fingerprints of the individual
26 U.S.C. § 5811 — Transfer tax: $200 on each NFA firearm transfer (for machine guns and destructive devices); $0 for transfers between SOT-qualified dealers and manufacturers (this reflects the Firearm Owners Protection Act 1986 amendment that eliminated the tax on certain dealer transfers while maintaining it on all others)
26 U.S.C. § 5812 — Transfer requirements: a firearm may not be transferred unless the transferor files a written application in duplicate (Form 4 or Form 3); the appropriate tax stamp is affixed; the transferee is identified with fingerprints and photograph (if an individual); ATF has approved the transfer and registration
26 U.S.C. § 5821 — Making tax: $200 on each NFA firearm manufactured (for machine guns and destructive devices); applies to civilians manufacturing NFA items for personal use (Form 1 process); licensed manufacturers pay through SOT classification
26 U.S.C. § 5822 — Making requirements: no person may manufacture an NFA item without filing a Form 1 application, paying the making tax, identifying the firearm and themselves (with fingerprints and photograph for individuals), and receiving ATF approval prior to manufacture
26 U.S.C. § 5841 — Registration: ATF must maintain the NFRTR — a central registry of all NFA firearms in the U.S. not under government control; each manufacturer, importer, and maker must register every NFA item; transfers must be registered to the new owner
26 U.S.C. § 5845 — Definitions: "firearm" under the NFA includes shotgun with barrel <18", rifle with barrel <16", machine gun, muffler or silencer, destructive device, and "any other weapon"; "machine gun" means any firearm which shoots automatically more than one shot by a single function of the trigger; "silencer" includes any device for silencing, muffling, or diminishing the report of a portable firearm

Implementing Regulations

ATF's regulations implementing the National Firearms Act live at 27 CFR Part 479 — Machine Guns, Destructive Devices, and Certain Other Firearms. The Part translates the IRC's tax provisions into operational procedures: who must register, what forms to file, how taxes are collected, and how the National Firearms Registration and Transfer Record (NFRTR) is maintained. Key provisions:

§ 479.32 — Special (Occupational) Tax rates by category: $1,000/year for importers and manufacturers (reduced to $500 for entities with under $500,000 in gross receipts); $500/year for dealers. Tax must be paid before commencing or continuing business in NFA items.
§ 479.34 — Special tax registration: every person paying occupational tax must register with ATF their name, address, and each business location; dealers must keep a register of all NFA firearms acquired and disposed of.
§ 479.62 — Application to make (Form 1): civilian process to manufacture an NFA item — the applicant submits Form 1 in duplicate, pays the $200 making tax, submits fingerprint cards and passport photo (individuals) or responsible person information (trusts and entities), and receives ATF approval before any modification.
§ 479.84 — Application to transfer (Form 4): the standard Form 4 process — submitted in duplicate, identifying the firearm by serial number and the transferee (with fingerprints and photograph for individuals), $200 tax stamp affixed or payment attached; ATF must approve before the firearm changes hands.
§ 479.90 — Estates: Form 5 (Application for Tax Exempt Transfer) used when NFA items transfer to heirs by operation of law — no transfer tax; ATF approval required before the executor physically transfers the items.
§ 479.101 — Registration of firearms: all manufacturers, importers, and makers must register each NFA firearm with ATF within the time periods specified; registered items are entered into the NFRTR by serial number, caliber/gauge, barrel length, overall length, model, and owner.
§ 479.104 — Machine guns manufactured after May 19, 1986: confirms that no new machine guns manufactured after that date may be registered for civilian ownership (implementing the Hughes Amendment prohibition now codified at 18 U.S.C. § 922(o)). Any machine gun not registered prior to that date cannot be lawfully transferred to or possessed by a civilian.
§ 479.111 — Importation: licensed importers must obtain ATF approval (Form 6) before importing NFA items; firearms imported for sporting purposes under separate ATF criteria may qualify; re-importation of U.S.-origin NFA items follows separate procedures.

The Part is organized around the three NFA tax events: the Special Occupational Tax (annual registration for dealers, manufacturers, importers — Subpart D), the Making Tax (civilian Form 1 manufacturing — Subpart E), and the Transfer Tax (Form 4 transfers between parties — Subpart F). Subpart G (Registration and Identification) establishes the NFRTR and serial number requirements. Subpart H (Importation and Exportation) governs cross-border movement of NFA items.

Recent rulemakings: A 2014 update (79 FR 46693) revised the trust and legal entity application procedures for NFA transfers — eliminating the CLEO signature requirement for individuals and adding responsible-person photograph and fingerprint submissions for trusts and other entities (Form 23 / Responsible Person Questionnaire). Electronic filing (eForm 1 and eForm 4) was introduced under administrative procedures and significantly reduced processing times; the regulatory framework in 27 CFR 479 predates and encompasses the electronic process without requiring separate rulemaking.

The NFA Item Categories

Machine guns: Any firearm that fires more than one shot per trigger pull, plus any part designed and intended solely to convert a semiautomatic firearm into a machine gun (e.g., auto-sears), and any combination of parts from which a machine gun can be assembled. The Hughes Amendment (18 U.S.C. § 922(o), added by the Firearm Owners Protection Act of 1986 — see federal firearms law) prohibits civilian transfer or possession of any machine gun manufactured after May 19, 1986. Pre-1986 registered machine guns can still transfer, but the fixed supply creates extreme scarcity — prices for common full-auto carbines often exceed $20,000-$40,000.

Suppressors (silencers): Any device for silencing, muffling, or diminishing the report of a portable firearm. Suppressors are the most commonly purchased NFA item — roughly 2-3 million are registered. A suppressor typically reduces gunshot volume by 20-35 decibels (from ~160dB to ~130dB — still louder than a rock concert, but substantially safer for hearing). Despite the term "silencer" in statute, modern suppressors do not produce the Hollywood "phew" sound.

Short-barreled rifles (SBRs): Any rifle with a barrel shorter than 16 inches or an overall length shorter than 26 inches. If you take a standard AR-15 rifle (legal without NFA registration) and install a barrel under 16 inches, it becomes an NFA firearm requiring registration and the $200 tax stamp.

Short-barreled shotguns (SBSs): Any shotgun with a barrel shorter than 18 inches or overall length shorter than 26 inches.

Destructive devices: Grenades, mortars, rockets, bombs, mines, or similar devices; also includes firearms with barrel bores over .50 caliber (except shotguns, and firearms the ATF determines are generally recognized as particularly suitable for sporting purposes).

Any other weapons (AOWs): A catch-all category including concealable firearms that don't fit other definitions — smooth-bore pistols, pen guns, belt buckle guns, some multi-shot pistols. The transfer tax for AOWs is $5 (not $200), though the making tax is still $200.

How NFA Item Transfers Work

To transfer an NFA item to a civilian (not a licensed dealer), the parties use ATF Form 4 (Application for Tax Paid Transfer and Registration of Firearm) — the NFA transfer tax is one of the older surviving federal excise taxes and lives alongside the broader federal firearms law framework:

Seller (typically an FFL/SOT dealer or private individual) and buyer complete Form 4 together
Individual buyers submit fingerprint cards and passport photos; entities (trusts, corporations) have different requirements
The $200 tax stamp payment accompanies the application
ATF reviews the application: background check, verification the transfer is legal in the buyer's state, NFRTR verification of lawful registration of the item
Upon approval, ATF stamps and returns the Form 4 — the buyer receives their copy, which serves as proof of ownership and must be kept with the NFA item
The NFA item is transferred and registered to the new owner

Electronic filing (eForm 4): ATF introduced electronic filing for Form 4 in 2022. Processing times dropped dramatically — from 8-14 months on paper to approximately 60-120 days electronically for most suppressor transfers.

Trusts and LLCs: Many NFA owners hold items in a gun trust (a revocable living trust specifically structured for NFA ownership). Benefits include: multiple trustees can lawfully possess the NFA items; avoids the CLEO signature requirement (though ATF eliminated the CLEO approval requirement for individuals in 2016); simplifies estate transfer upon death.

The Machine Gun Price Market

Because no new machine guns may be registered for civilian ownership (post-1986 ban), the NFA registry for machine guns is effectively a closed market. Current registration counts approximately 175,000 pre-1986 machine guns eligible for civilian transfer. Their prices have risen dramatically over decades:

M16 auto (pre-'86 registered lower): ~$30,000-$40,000
Uzi submachinegun: ~$8,000-$15,000
MAC-10/MAC-11: ~$4,000-$10,000
M60 machine gun: ~$40,000-$80,000+

These prices have nothing to do with the $200 transfer tax and everything to do with fixed supply and high collector/enthusiast demand. The investment value of pre-1986 machine guns has historically been strong, though liquidity is limited and holding costs (storage, insurance) are real.

How It Affects You

If you want to buy a suppressor: Suppressors are legal for civilian ownership in 42 states — the eight that prohibit them are CA, DE, HI, IL, MA, NJ, NY, and RI. The process through a licensed dealer: select your suppressor, complete ATF Form 4 (either as an individual with fingerprint cards and passport photos, or through a gun trust), pay the $200 tax, and submit electronically using eForm 4 at eforms.atf.gov. Typical eForm 4 approval time is 60-120 days; paper submissions can take 8-12 months. Once approved, ATF mails back the stamped Form 4 — keep the original with the suppressor whenever it leaves your home. The approved Form 4 is tied to the specific suppressor's serial number, not to any particular host firearm; you can mount it on any compatible firearm you own. If you plan to transport the suppressor across state lines, the destination state must also permit civilian suppressor ownership — your valid federal stamp doesn't override a state prohibition.

If you want to build an SBR or SBS: You must receive ATF approval before you modify the firearm — not after. File ATF Form 1 (Application to Make and Register a Firearm) electronically at eforms.atf.gov, pay the $200 making tax, and wait for the approved Form 1 to arrive. Only then may you install the short barrel or make the modification. Modifying a rifle to have a barrel under 16 inches before your Form 1 is approved is a federal felony carrying up to 10 years, regardless of intent. A Form 1 NFA item is registered to you personally (or your trust) and cannot be transferred to another person without a separate Form 4 application and $200 transfer tax — it doesn't become a "normal" transferable item just because you built it legally.

If you inherit NFA items: NFA items transfer to heirs tax-free — the $200 transfer tax does not apply to estates. The executor files ATF Form 5 (Application for Tax Exempt Transfer and Registration of Firearm) for each NFA item, identifying the heir and the firearm. ATF verifies the item's registration in the NFRTR and approves the transfer; expect 30-90 days. If the deceased held NFA items in a gun trust, the successor trustee named in the trust document takes control without needing ATF approval — the items remain registered to the trust, which is why gun trusts are often preferred for estate planning when multiple NFA items are involved. Before filing Form 5, verify each item's registration with ATF — possession of an unregistered NFA item inherited in good faith is still a federal felony.

If you're relocating to a different state with NFA items: You must file ATF Form 5320.20 (Application to Transport Interstate or to Temporarily Export Certain National Firearms Act Firearms) and receive approval before transporting NFA items across state lines. File at eforms.atf.gov; approvals typically take a few days to a few weeks. More critically: if your destination state is one of the eight that prohibit civilian NFA ownership (CA, DE, HI, IL, MA, NJ, NY, RI), you cannot bring registered NFA items there — your valid federal registration does not override state law. That means if you're moving from Texas to California with a registered suppressor, the suppressor cannot legally enter California. Options include transferring it to a dealer in a permissive state, selling it, or putting it in storage before your move.

State Variations

NFA items require both federal approval and must be legal under state law:

States prohibiting all suppressors: CA, DE, HI, IL, MA, NJ, NY, RI
States with additional SBR/SBS restrictions: Some states have their own AWB or restrictions beyond the NFA
States allowing NFA items: 42 states permit civilian ownership of federally registered NFA items; local laws may vary
State registration: No state has a state-level NFA equivalent — the federal registry is the only civilian registry

Pending Legislation

Hearing Protection Act (multiple Congress sessions): Would reclassify suppressors as Title I firearms (removing them from NFA regulation and eliminating the $200 tax and registration requirement). Supported by hearing health advocates, firearm industry groups. Has not passed as standalone legislation; provisions have been included in various omnibus bills.
Hughes Amendment repeal proposals: Fringe bills that would reopen the machine gun registry to new civilian registrations. No serious legislative traction.

Recent Developments

eForm 4 adoption: ATF's electronic Form 4 processing launched in 2022 dramatically reduced wait times for suppressor transfers (from 10-14 months to 60-120 days). Most dealers now exclusively use eForm 4 for suppressor transfers.
Pistol brace rulemaking: ATF's 2023 rule reclassifying many pistol-braced firearms as SBRs (requiring NFA registration) was vacated by multiple federal courts in 2024. As of 2026, the rule is enjoined, and pistol-braced firearms are generally not treated as NFA SBRs in most circuits — the litigation draws heavily on Second Amendment doctrine after Bruen.
Suppressor ownership growth: The number of registered suppressors continues to grow rapidly — from approximately 1 million in 2015 to approximately 3 million in 2026 — as awareness of hearing protection benefits and streamlined eForm 4 processing increases.
OBBBA $0 NFA tax (Jan 1, 2026): The One Big Beautiful Bill Act (Pub. L. 119-21, signed July 4, 2025) eliminated the $200 NFA transfer and making tax for suppressors, SBRs, SBSs, and AOWs effective January 1, 2026. Machine guns and destructive devices remain subject to the $200 tax. All other NFA framework requirements — Form 1 and Form 4 filings, background checks, fingerprints/photographs, ATF approval before transfer or manufacture, NFRTR registration — remain in force. The change is purely the elimination of the excise tax for the four categories. Industry has reported a sharp increase in NFA activity since January 2026.