Can a police officer buy a post-'86 MG, or can only the department buy one? And, if the officer can buy one, what happens if s/he moves to another department, quits, retires, is medically retired, etc.?
SOT = Special Occupation Tax... it means an FFL holder who in addition to thier normal fees are paying an annual tax to the government in order to deal in NFA weapons. The amount of the tax varies depending on the occupation... a dealer in NFA weapons pays less than a manufacturer, for instance.
Pretty much, except that the gun makers are also SOTs if they make machine guns... or any other NFA regulated weapon. But your basic rent-a-cop agency can't buy post-86 machine guns. Mercenary style companies can get around this by buying the guns in the country they're operating in and not worrying about US laws... they of course can't bring the weapons back, though.
At least they apply it somewhat fairly. A couple of years ago, the UN was caught issuing their security guards brand new MP5s. The .gov made them get rid of them.
But then, Ted Kennedy's bodyguard gets busted carrying an unregistered machinegun on the steps of the US capital and nothing was done to him.
IIRC, the Kennedy bodyguard's gun was legally registered, just not legal in D.C. or to have in the Capitol building. Again, IIRC, the bodyguard was not prosecuted, but the gun was confiscated.