I became an 01, NFA Class 3 Dealer back in 1988, and throughout my firearms career of almost 40 years, I have held every license ATF has to offer, including Destructive Device Dealer/Manufacturer/ Importer, NFA Dealer/Manufacturer/Importer, etc. and even managed a Title II U.S. Customs Bonded Warehouse. In 1991, I got involved with the film industry as a theatrical armorer through some friends who were top martial artists as well as Hollywood action actors. I’m not going to get into that whole story now, but over the years, I did work for HBO, The History Channel, Screen Gems Studios, Reader’s Digest Video, and many other studios and film companies. I don’t do much in the movie industry today (although I still can and am asked to work now and then), but if you want to take a look at my old website, it's archived here: Exotic Arms for Motion Pictures.
Back in the day, many of us theatrical armorers would rent machine-guns from companies like the famous Stembridge Gun Rentals, Ellis Mercantile (prop company), and a couple of others. The way we could rent a machine gun was that first you had to be a licensed 01/class 3 NFA dealer, 07/class 2 NFA manufacturer, or an 08/class 1 NFA importer – you also had to be a legitimate theatrical armorer. Instead of transferring the firearm on a tax-free dealer-to-dealer ATF Form 3, or on the more common taxed ATF Form 4, or on the tax-free Form 5 (used for estate transfers or repairs), the then-BATF had what was called the “Movie Industry Transfer of NFA Weapons” form (many of us just called it the movie gun transfer form). This form was faxed in and took less than 24 hours for approval in most cases. 24 hours!
However, as far as fully-automatic firearm rentals, only transferable machine guns qualified for this transfer. So, an Auto Ordnance 1928 Thompson submachine gun that sold for as low as $1,000 in 1988 (and that was two years after the unconstitutional Hughes Amendment in the FOPA), now sells for over $20,000 – that is the main reason why it's not done any longer (to my knowledge) - the guns are just too valuable to get “banged up” on a movie set. Also, the fact that both movie prop houses I mentioned sold their entire inventories is a huge reason this practice went away. The six or so MP5s (converted transferable HK94s) I used on the HBO movie Rogue Force (1998), starring Michael Rooker and Robert Patrick, would sell for over $35,000 each today. At the time the movie filmed in 1997, the value of a transferable converted HK94 was at about $3,000, the first transferable one in my gun shop went for $850 in 1988.
Today, many theatrical armorers are type 07/class 2 NFA manufacturers, so they just convert semi-autos to full auto or build machine guns from parts kits, and some have law enforcement dealer samples too. Well, since the Hearing Protection Act has been pretty much scuttled, and NFA transfer times are dragging on at a little less than one year, I know that this little bit of unknown NFA history is going to enrage a lot of people. Anyway, “That’s show biz!”