Special Occupational Taxpayers


Special Occupational Taxpayers are a group of Federal Firearm Licensees in the United States who manufacture, import and/or transfer NFA weapons. The National Firearms Act Special Occupational Taxpayer class is part of the Internal Revenue Code of 1986.
The Special Occupational Tax is due on or before July 1 of each year. The tax rate for every importer and manufacturer is $1,000 per year or part of a year. The tax rate for each dealer is $500 per year or part of a year. Importers and manufacturers engaged in business with less than $500,000 in gross receipts in the most recent taxable year are given relief in the form of a $500 reduction in SOT tax payment making the total SOT tax $500. In addition to the SOT tax, all importers and manufacturers must pay an annual Excise tax to the Tax and Trade Bureau for firearms imported or manufactured for re-sale. The excise tax applies only when the quantity of firearms imported or manufactured during the year is 50 or more.

Special Occupational Taxpayer Classes

To get a Class 1 SOT status, an importer FFL is needed, which are FFL Types 8 and 11.
To get a Class 2 SOT status, a manufacturer FFL is needed, which are FFL Types 7 and 10.
To get a Class 3 SOT status, a dealer FFL is needed which are FFL Types 1 and 2.

Other occupations subject to tax

In addition to the firearms industry, the tobacco industry is also subject to paying special taxes, and are therefore SOTs. Specifically, manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and tobacco export warehouse proprietors are subject to tax. Before 1 July 2008, segments of the alcohol trade were also subject to special taxes. These taxes were repealed in Public Law 109-59.