When a state wants to keep such NFA firearms for official use, the state must register the firearm by filing an ATF Form 10: Application for Registration of Firearms Acquired by Certain Governmental Entities. As approval of the Form 10 is conditioned on an “official use only” basis, subsequent transfers will not be approved unless the transfer is to another government agency for official use.
[26 U.S.C. 5841; 27 CFR 479.104]