Legality of "flipping" guns?

[JohnBT]

"They were running adds, for buying guns cheap, and turning around and advertising the same guns on the same online classified page."

I wonder if they were the same guys who always had a bunch of rifles for sale with ads that said something like "Like new, only fired once."

What the heck was that all about. Once? They couldn't even argue that a gun shot a bad group and they were unloading it.

John

 

[Bubba613]

Lots of opinions here. Anybody here been personally contacted by BATFE on this issue?

No, but one of my customers was. And this was the result of a long investigation including close examination of my records. They had a list of every gun he had purchased from local dealers. Many of them were subsequently used in crimes. That wasn't his fault btw.
The agent (who refused to give his card) told him he needed an FFL and could not sell any guns to private persons for a year.
He basically told BATFE to take a hike, that if he were doing something illegal they wouldn't be having this conversation, they would be hauling his butt to jail.
He's right btw.

If I decided to sell multiple guns a year and had my FFL, would I have to make sure the people I sold the gun to register with the state before leaving with my gun?

Also, would an FFL license require that every single sale I make has to be a registered sale?

I'm just thinking, is the FFL dealer license the only difference between the guys with a table at a gun show and the guys in the back of the building with a backpack?

Since I take it you are in TN I can tell you, as a TN dealer, that there is no "registration with the state" here. So I am not sure of the question.
As for "unlicensed sales" it depends on how the FFL is held. Mine is a corporation. So there are guns that the company owns and guns I own. If I come across something I want personally I have to fill out a 4473 etc etc and log it out to me. If I want to sell one of my own personal guns, it doesn't have to cross corporate books.
Other people hold the FFL as individuals. In that case I think they must hold any gun they take personally for some period of time (like a year) before reselling it.
I pity the guy who takes store guns and resells them privately. I would bet ATF takes a real dim view of that.

 

[WardenWolf]

As an FFL, you MUST log and perform background checks on all transfers. Period. No more giving or receiving gifts from friends or relatives, and you're subject to warrantless searches from ATF agents at any time. Effectively it means EVERYTHING you have or do will be tracked.

 

[Bubba613]

As an FFL, you MUST log and perform background checks on all transfers. Period. No more giving or receiving gifts from friends or relatives, and you're subject to warrantless searches from ATF agents at any time. Effectively it means EVERYTHING you have or do will be tracked.

Absolutely untrue. Sorry.

 

[WardenWolf]

Oh really? Have you done your research? People with an FFL license can have the address listed on the FFL form searched. And while you can effectively give something for 0 profit, it must still be logged and a background check conducted. If you have something that isn't logged, you're screwed.

 

[Bubba613]

I'm an FFL so yes.

 

[CoRoMo]

They were running adds, for buying guns cheap, and turning around and advertising the same guns on the same online classified page.

Such a case would be easy for the BATF to zero in on, but what I've referred to is investing in a few guns that will skyrocket in price.

I recently read a post on THR from a member who bought MAC10 in the early 90's for market price. After Clinton passed his AWB, that gun was worth right at double what he purchased it for, so he sold it for an awesome profit. After the '04 sunset, the prices dropped back to near the pre-AWB price, so he bought a couple more. He's simply making a good investment, and I don't think that is quite the same thing as the described illegal dealers.

 

[logical]

It's an unfortunately poorly written law that doesn't say how many is too many. It is left to either side to prove actual intent. It's generally easier to prove what is true than what is not true. If you want to be completely on the right side of the law, and are not an FFL, don't buy a gun with the intent of reselling it. If you just can't stop yourself..than at least limit it to once in a blue moon and be extra cautious about the sale. If you want to make a living selling guns, get a license. If you are actively seeking guns to buy and resell, you know and they will know you are crossing the line.

To be fair, I've had deals come up on forums that I jumped at with intent of reselling but one was a gun I already had that included a bunch of accessories I wanted. Bought the package, kept the accessories, sold the gun....but in my state even FTF sales are pretty regulated and any buyer either has a gov issued purchase permit or a CPL (CCW). Another was a 3 gun package and I only really wanted two of them. One the other side, I had a chance to buy a new Colt AR last month at an easy $500 under what I knew I could get on Gunbroker the next day. I walked away, there would have been no explaining that one away.

 

[redneck2]

If you have something that isn't logged, you're screwed.

This is correct. I worked for a local dealer. We were super careful about logging EVERYTHING in. If we had an unannounced audit by BATF and something wasn't on the books, you could get whacked for selling illegally under the table. Particularly true of of trade-ins and repairs. Everything got tagged before the sales guy walked away from the counter.

I asked the dealer specifically about selling privately . It's a real gray area. The strictest interpretation is that you can sell off your private collection once. There were some guys in Warsaw, IN that were doing exactly what you're talking about. Local dealers were getting miffed that they had to jump thru hoops and these guys weren't. Somebody turned him in, and he got whacked.

I also knew a licensed dealer in Bristol, IN. The thought he'd beat the BATF and sell stuff under the table. Ended up selling to a felon that used the pistol to kill a cop. He's now doing 10-20 in prison. Since he was in his mid 60's when convicted, he will never see the outside again.

Bottom line is that if the BATF thinks you're a dealer, you'd better have an FFL. If you have enough money to fight it, go have fun. You may want to consider if making a few bucks is worth it.

 

[subknave]

Like many other rules the BATF operates under I do not think there is any set number of guns you have to buy and sell to be a "dealer". One agent could take that to mean you bought a gun and sold it 2 days later another to mean you sold more than 10 this year. It is similar with the Machinegun definition. One persons "easily made to fire more than one shot" could be modifications that require only hand tools, and another persons "well if he had a milling machine and lathe and knew how to use them and had the proper knowledge downloaded from the internet he could have converted this into a machinegun so he had a machine gun"

It depends on what they think they can make a jury believe. I personnally buy and sell a lot (>20) of guns in a year but I have a C&R FFL so I buy and sell older firearms and most of my reasons for selling involve financing another acquisition. I do not buy and sell on the same day and am very careful to whom I sell, If they won't let me write down their drivers license information I don't sell to a private individual and mostly I trade with dealers then I put the info and the serial number of the gun in a logbook.

A lot of licensed dealers will sell a hundred guns a week or more. Some licensed Pawnshops may only do 5 or 6 a week so it really varies.

 

[devildog66]

As always, caveat emptor. Actually, "exigo caveo". There that oughta do it...

 

[Bubba613]

Actually I think in this case it's "Caveat Vendor"

 

[45Badger]

One the other side, I had a chance to buy a new Colt AR last month at an easy $500 under what I knew I could get on Gunbroker the next day. I walked away, there would have been no explaining that one away.

Please contact me on any furture deals that your tummy can't handle. I'll be happy to 'splain all of my legal actions.

 

[logical]

Please contact me on any furture deals that your tummy can't handle. I'll be happy to 'splain all of my legal actions.

Get yer own ...and my tummy's just fine.

 

[green country shooter]

There is no number. One is enough. "Regularly" does not enter into it. That's the law. You may read the law if you wish. Buying one gun with the intention of reselling is a federal felony if you do not have a license.

I suspect what some of those above are saying is you are not likely to be caught if you are only selling a few. It is not very high road to say it's ok to commit a felony if you won't get caught.

Federal law is enforced with no sense of proportion or fairness or equity. Or sense of humor for that matter.

18 usc 922 (a)(1)(A)

It shall be unlawful for any person except...a licensed dealer to engage in the business of ...dealing in firearms.

There are several court cases on what that means, all of which disagree. Do you want to be the test case for your federal district?

 

[Bubba613]

I don't think buying and selling one gun is ever called "engaging in business." How many is engaging in business? I don't know. But it has to be a pattern.

 

[IndianaDon]

I look at this in relation to the ATF requirement for being a genuine "Dealer", as opposed to a breakfast table dealer/hobbyist. If you apply for an FFL, you are supposed to be seriously engaged in this as a business, i.e.: your bread & butter depends on it. I haven't heard too many stories of FFL hobbyists being hassled, but I'm sure some have been---for not selling enough guns. As has been mentioned, this is a grey area---what constitutes "enough" sales to justify an FFL, and what constitutes "too many" sales for a hobbyist. I think that as long as you aren't approaching a profit that might be considered a livable income, you have little to worry about, as long as you keep good records and do everything "by the book".

 

[jbech123]

When talking of buying and selling, do we mean outside an ffl? I get bored of stuff/think something seems like a good idea in theory, then I get it and it is not as useful as I thought. In the last year I bought and sold ~10 guns, mostly off gunbroker, and all went through an ffl at a local shop here. My honest intent was not to resell any of them. Reality tells me however that next year will be more experimenting with different things and some I won't like and will get rid of. Case in point, I've had a recent itch for a 454 casull that is semi compact. Also seemed cool that I could shoot 45 colt out of it. However they are a bit pricey, I could go with a freedom arms 4.5" barrel at well over a grand, or even a ruger alaskan would be in the neighbothood of $700+. So I've been on the fence about it, and recently came across an absolutely smokin' deal on a freedom arms. I took the deal(through an ffl of course), knowing that if I get bored or the novelty of the recoil of a 4.5" 454 wears off, I can certainly get more out of it than I paid.
Now I'm already thinking, would a 25-06 fill the niche between my 243 and 308? hmmmm, if I could only find a deal so that if it turns out there is no real gap to fill there, can I get my money back, or better yet make a few bucks. So I can see both sides of the argument, but the fact is, I'm not flipping guns to try to make a profit. I know, however, that I will buy and sell a few a year out of shear boredom/wanting to try new things, so knowing that, it is in the back of my mind to look for guns that are undervalued, especially in this economy - if a guy has cash and is not looking for an AR/semi auto, there are some good deals to be had.

 

[Sunray]

I'd guess that buying with the intent of trading isn't exactly the same as buying with the intent of reselling. As long as ATF rules are followed. Mind you, the ATF makes their own laws by regulation.

 

[coyotehitman]

It boils down to intent and whether it is legal will be seen through the eyes of another and something you may have to prove later. Will you make enough "flipping" to cover your legal expenses if you have to prove your intent in court?

 

[evan price]

This is a simple question. 18 U.S.C. 923 says:

(a) No person shall engage in the business of importing, manufacturing, or dealing in firearms, or importing or manufacturing ammunition, until he has filed an application with and received a license to do so from the Attorney General. The application shall be in such form and contain only that information necessary to determine eligibility for licensing as the Attorney General shall by regulation prescribe and shall include a photograph and fingerprints of the applicant. Each applicant shall pay a fee for obtaining such a license, a separate fee being required for each place in which the applicant is to do business...

(emphasis mine)

Pretty cut and dried. The legal term is Mens Rea, which means INTENT.

If your intent is to resell guns and not to add them to your collection personally, even one such sale is a violation of 18 U.S.C. 923 and a federal felony. BATFE is not known for their forgiving nature and easygoing demeanors.

As a matter of fact their 8-08 release in which they claim that "Manufacturing" firearms is now anyone who installs drop-in parts or provides final finishing for resale, is now a manufacturer and requires a manufacturing FFL shows just how serious they are.

 

[Art Eatman]

1. BATFE regs are stickied on this forum's main page.

2. I have seen cites here on the Internet about non-FFL people having gunshow tables who resold a trade-in for profit at the same show--and the BATFE got on them for "dealing" without a license. (One instance in Virginia, IIRC.) They were seen to be going beyond selling from the personal collection.

So I dunno. When in any gray area of the law where terms are subject to varying interpretations by different enforcement people, silence is your best friend.

 

[subknave]

Mind you, the ATF makes their own laws by regulation.

Thats part of the problem of not running afoul of them. A change can come about or "reinterpretation" by the current attorney general and now something that wasn't illegal now is. A good example is that importing of barrels with parts kits used to be fine then they reinterpreted the regs and you couldn't import barrels anymore. Another example is that in some cases a firearm is the receiver but it seems in other cases it can be a part or parts. An example is the definition of manufacturing was making a receiver now it appears to be refinishing or installing parts. An ever tightening circle like fish in a net.

 

[wuchak]

If they are a good deal buy them for your collection. Shoot them. Decide you don't like them. Sell them.

If you buy 20 K31 Swiss Rifles online so you can pick the best and sell the rest off in a few years once prices have gone up you are a collector, not a dealer. I think the length of time between purchase and sale would be a deciding factor. If you are buying and reselling immediately you are dealing. If you are buying, trying, keeping some, and then selling others a month or two later then you are collecting.

 

[Jim K]

Subknave, a C&R license holder is in the category of a non-licensee if he 1) buys and sells non-C&R guns or 2) sells any gun to a non-licensee.

The C&R license was meant to facilitate transfers of collector guns between and among licensed collectors, not to provide guns to non-licensees without any checks.

Jim