It is a common misconception that an individual must have a "Class 3 License" in order to own NFA firearms. Legal possession of an NFA firearm by an individual requires transfer of registration within the NFA registry. An individual owner does not need to be an NFA dealer to buy Title II firearms. The sale and purchase of NFA firearms is, however, taxed and regulated, as follows:
All NFA items must be registered with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE). Private owners wishing to purchase an NFA item must obtain approval from the ATF, obtain a signature from the Chief Law Enforcement Officer (CLEO) who is the county sheriff or city or town chief of police, pass an extensive background check to include submitting a photograph and fingerprints, fully register the firearm, receive ATF written permission before moving the firearm across state lines, and pay a tax.
The registration or transfer process (to an individual or corporation) takes approximately 1–3 months to complete. Additionally, the firearm can never be handled or transported by any other private individual unless the firearm's registered owner is present. NFA items owned by trusts may be legally possessed by any trustee (i.e., if a husband and wife are both trustees, either of them may use and transport the firearm without the other present).
Upon the demand of any ATF agent, the registered owner must produce the original ATF Form with tax stamp affixed to prove the firearm is legally owned. Technically speaking, owners are not required to produce the form for any non-ATF personnel (local police officers do not have the legal right to demand to see the form). However, in practice, most NFA firearm owners keep a photocopy of their paperwork with the firearm at all times, and will show it to any authority that requests it to avoid legal issues. Many owners keep the original form in a safe place, such as a safe deposit box, to avoid damaging it, as the ATF will not replace a damaged $200 tax stamp.