A Class 2 SOT can make, tax free, machine guns, silencers, short rifles, short shotguns or AOWs. A class 2 can also have weapons transferred to him tax free, by other SOT’s. He also has to have a type 07 or type 10 FFL. He does not need to ask prior permission of ATF to make a weapon, he would notify ATF of its making within 24 hours of its making by filing Form 2 with ATF. He could also import foreign made NFA weapons, for R&D use (one of each, not a bunch of each model). To import a machine gun (only) a class 2 would need a letter from a governmental entity able to own the weapon requesting a demonstration. A weapon imported for R&D must be exported or destroyed when the R&D is completed, whereas a weapon imported for sale to a government entity would be considered pre-86 dealer samples. To import for sale to government entities you need a Class 1 SOT.
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Subsection (b)(7) of section 12020 exempts any “firearm or ammunition” lawfully possessed under federal law and on the C&R list. Subsection (b)(8), exempts ALL AOW’s except pen guns. Subsection b(2) is the exemption for the movie permit for short shotguns and short rifles with the procedure for its issuance found at section 12095.