ATF's Proposed Revision of “Engaged in the Business” as a Dealer in Firearms

[gc70]

ATF has issued its proposed rule that revises the definition of “Engaged in the Business” as a Dealer in Firearms.

https://www.atf.gov/firearms/definition-engaged-business-dealer-firearms

 

[AlexanderA]

That means that it's open for comments.

One obvious comment is that if they're going to require more traders to have licenses, they need to make the licensing process easier. For example, by allowing "kitchen table" dealers to be licensed without regard to local zoning.

 

[Speedo66]

Sounds like nothing new, just enhanced enforcement of people buying and selling large quantities of firearms, something that would constitute a business, without a license.

 

[gc70]

I believe the big difference is the previous definition covered buying and selling as one's primary source of livelihood while the revised definition is based on profit motivation, which captures buying and selling firearms as a sideline.

 

[lilguy]

Is this basically targeted at O3 C/R licensees who are running off the rails?

 

[sparkyv]

Some 2A folks like the GOA are interpreting this in the extreme as how this rule can affect even a single personal sale if a penny of profit was made in one year. This may be more insidious as it appears. Texas' own John Cornyn was partly responsible for this garbage...the Rat.

GOA Condemns Biden ATF’s Move to Implement Backdoor Universal Background Checks | GOA

FOR IMMEDIATE RELEASE August 31, 2023 Washington, D.C. — Today, the Biden ATF formally rolled out their plans to implement backdoor universal background checks, which was made possible by Senator John Cornyn’s “compromise” legislation passed last summer. Under this newly proposed rule, any...

www.gunowners.org

 

[AlexanderA]

Is this basically targeted at O3 C/R licensees who are running off the rails?

No, it's targeted at unlicensed people whose selling activities are such that they should have licenses. But really, the idea is that by expanding the universe of licensees, you expand the number of background checks. Incrementalism, but the ultimate goal is Universal Background Checks.

 

[AlexanderA]

Some 2A folks like the GOA are interpreting this in the extreme as how this rule can affect even a single personal sale if a penny of profit was made in one year.

The ATF lacks the enforcement resources to drill down to that level. They'll be quite busy just nabbing the "low hanging fruit."

 

[dogtown tom]

That means that it's open for comments.

One obvious comment is that if they're going to require more traders to have licenses, they need to make the licensing process easier. For example, by allowing "kitchen table" dealers to be licensed without regard to local zoning.

That's stupid.
If the EPA allowed your neighbor to build and operate a hazardous waste dump or sewage treatment plant next door despite local zoning prohibiting such.....you would be the first one whining about big government ignoring the wishes of local government.

The number one rule of operating a home based business is buy a home where a home based business is allowed. If you chose poorly, it's not ATF's fault.

The FFL licensing process is easy as pie.
1. Complete form 7
2. Submit photo and fingerprints
3. Wait a few weeks for interview.
4. Get FFL in mail
5. Profit.

 

[P89DCSS]

There's revisions to the 4473 for the BSCA including this:
"The last sentence of the certification statement has been changed from “I further understand that the repetitive purchase of firearms for the purpose of resale for livelihood and profit without a Federal firearms license is a violation of Federal law” to “I further understand that the repetitive purchase of firearms for the purpose of resale to predominantly earn a profit without a Federal firearms license is a violation of Federal law”."

Here's a list of changes straight from the ATF website:

ATF Form 4473 - Firearms Transaction Record Revisions | Bureau of Alcohol, Tobacco, Firearms and Explosives

View the Updated ATF Form 4473 - Firearms Transaction Record (August 2023 Revisions) Notice Regarding Previous Changes to the ATF Form 4473 Due to new statutory requirements set forth in both the NICS Denial Notification Act and the Bipartisan Safer Community Act (BSCA), and to reflect the...

www.atf.gov

 

[hso]

This is looking to increase enforcement to all those guys that buy and sell guns to make a profit without getting an FFL. It isn't directed at hobbyists, C&R holders, or actual civilian sales from individual to individual.

If you've not been to a gun show or flea market where you see the same guys over and over buying guns and putting them on their table then this probably seems extreme, but I set up and sell knives as a hobby and there are typically the old guys putting guns out for a hobby and then the guys flipping guns for a profit. Remember PROFIT is not on a single firearm, holster, knife, box of ammo, but at the end of the day when you balance expenses (tables are not cheap anymore to rent at a show) against what you took in.

 

[P89DCSS]

This is looking to increase enforcement to all those guys that buy and sell guns to make a profit without getting an FFL. It isn't directed at hobbyists, C&R holders, or actual civilian sales from individual to individual.

That has not been true before the BSCA and I see no reason why the new BSCA laws won't enhance the ATF's to go after innocent collectors.

 

[JohnKSa]

Things that can result in the "presumption" that a person is engaged in the business of dealing firearms. Emphasis added.

https://www.atf.gov/rules-and-regulations/docs/rulemaking/atf-eib-nprm-engaged-business-dealer-firearms/download

A person shall be presumed to have the intent to predominantly earn a profit from the sale or​

disposition of firearms in civil and administrative proceedings, absent reliable evidence to​

the contrary, when the person—​

(1) Advertises, markets, or otherwise promotes a firearms business (e.g.,​

advertises or posts firearms for sale, including on any website, establishes a website for​

offering their firearms for sale, makes available business cards, or tags firearms with​

sales prices), regardless of whether the person incurs expenses or only promotes the​

business informally;​

(2) Purchases, rents, or otherwise secures or sets aside permanent or temporary​

physical space to display or store firearms they offer for sale, including part or all of a​

business premises, table or space at a gun show, or display case;​

(3) Makes or maintains records, in any form, to document, track, or calculate​

profits and losses from firearms purchases and sales;​

(4) Purchases or otherwise secures merchant services as a business (e.g., credit​

card transaction services, digital wallet for business) through which the person makes or​

offers to make payments for firearms transactions;​

(5) Formally or informally purchases, hires, or otherwise secures business security​

services (e.g., a central station-monitored security system registered to a business, or​

guards for security) to protect business assets or transactions that include firearms;​

(6) Formally or informally establishes a business entity, trade name, or online​

business account, including an account using a business name on a social media or other​

website, through which the person makes or offers to make firearms transactions;​

(7) Secures or applies for a State or local business license to purchase for resale or​

to sell merchandise that includes firearms; or​

(8) Purchases a business insurance policy, including any riders that cover firearms​

inventory.​

Want to sell off dad's collection? If you rent a table at the local gun show, you'd better be ready to rebut the presumption that you are dealing in firearms.

Do you keep records of the purchase and sale prices of guns you no longer own? That's probably not a good idea unless you are willing and prepared to rebut the presumption created by that activity.

Note that this applies to civil and administrative proceedings, not directly to criminal cases.

 

[CapnMac]

(3) Makes or maintains records, in any form, to document, track, or calculateprofits and losses from firearms purchases and sales;

Do you keep records of the purchase and sale prices of guns you no longer own? That's probably not a good idea unless you are willing and prepared to rebut the presumption created by that activity.

So, keeping an inventory, the better to know how much to insure one's goods for, is meant to indicate one is "in the business for profit"?
Inflation is not profit, but does have a number of effects on things like "potential replacement cost."
So, the new rule seeks to penalize those with less-than average spreadsheet skills?
Our government at work.

 

[JohnKSa]

I think you could keep values of guns you own.

What is problematic, according to the rule, is keeping records of profit/loss--which, by definition means recording and retaining purchase and sale prices (or at least the difference of the two) for guns you no longer own.

 

[Gordon]

Things that can result in the "presumption" that a person is engaged in the business of dealing firearms. Emphasis added.

https://www.atf.gov/rules-and-regulations/docs/rulemaking/atf-eib-nprm-engaged-business-dealer-firearms/download

A person shall be presumed to have the intent to predominantly earn a profit from the sale or​

disposition of firearms in civil and administrative proceedings, absent reliable evidence to​

the contrary, when the person—​

(1) Advertises, markets, or otherwise promotes a firearms business (e.g.,​

advertises or posts firearms for sale, including on any website, establishes a website for​

offering their firearms for sale, makes available business cards, or tags firearms with​

sales prices), regardless of whether the person incurs expenses or only promotes the​

business informally;​

(2) Purchases, rents, or otherwise secures or sets aside permanent or temporary​

physical space to display or store firearms they offer for sale, including part or all of a​

business premises, table or space at a gun show, or display case;​

(3) Makes or maintains records, in any form, to document, track, or calculate​

profits and losses from firearms purchases and sales;​

(4) Purchases or otherwise secures merchant services as a business (e.g., credit​

card transaction services, digital wallet for business) through which the person makes or​

offers to make payments for firearms transactions;​

(5) Formally or informally purchases, hires, or otherwise secures business security​

services (e.g., a central station-monitored security system registered to a business, or​

guards for security) to protect business assets or transactions that include firearms;​

(6) Formally or informally establishes a business entity, trade name, or online​

business account, including an account using a business name on a social media or other​

website, through which the person makes or offers to make firearms transactions;​

(7) Secures or applies for a State or local business license to purchase for resale or​

to sell merchandise that includes firearms; or​

(8) Purchases a business insurance policy, including any riders that cover firearms​

inventory.​

Want to sell off dad's collection? If you rent a table at the local gun show, you'd better be ready to rebut the presumption that you are dealing in firearms.

Do you keep records of the purchase and sale prices of guns you no longer own? That's probably not a good idea unless you are willing and prepared to rebut the presumption created by that activity.

Note that this applies to civil and administrative proceedings, not directly to criminal cases.

Worse in first sentence you are presumed to be in busy if you advertise guns for sale on the web ,( like Gun Broker) .
This is down right evil as all the Gun Broker sales have to go through an FFL and to think otherwise is a lying deception.This will really hurt and instead of selling off my lifetime collection in years as I age will have to massively work at it in next few months.

 

[nick22]

I dislike this very much as big government continues to find ways to pinch people for selling legal items they own. We are not criminals because we choose to sell something we own it's not the ATF's place. My collection shouldn't be a headache for my wife or kids when I am gone, and I plan on enjoying them until I can't physically use them anymore.

 

[JohnKSa]

Worse in first sentence you are presumed to be in busy if you advertise guns for sale on the web ,( like Gun Broker) .

That seems to be more about promoting a business.

"Advertises, markets, or otherwise promotes a firearms business..."
"...regardless of whether the person incurs expenses or only promotes the
business informally..."

 

[AlexanderA]

What is problematic, according to the rule, is keeping records of profit/loss--which, by definition means recording and retaining purchase and sale prices for guns you no longer own.

This would be directly at odds with the IRS rules on recordkeeping and reporting of gains and losses from hobby activities. If you are a non-dealer (a hobbyist) losses on sales of guns are not deductible but gains are taxable. But first you must aggregate all the gains and losses in the given tax year. If the net is a loss, you can't deduct it, but if a gain you must report it as a capital gain. You can't comply with the tax obligation unless you have adequate records.

This should be pointed out in comments on the ATF proposal.

 

[JohnKSa]

What a mess...

 

[BRatigan]

So, if you are considered a dealer then the ATF can come to your house totally unannounced and ruin your day looking for a crime. Isn't that how it works today? Why are people so interested in giving so much power to the government?

 

[Gordon]

That seems to be more about promoting a business.

"Advertises, markets, or otherwise promotes a firearms business..."
"...regardless of whether the person incurs expenses or only promotes the
business informally..."

"Seems" to who ?

 

[wayneinFL]

That's stupid.
If the EPA allowed your neighbor to build and operate a hazardous waste dump or sewage treatment plant next door despite local zoning prohibiting such.....you would be the first one whining about big government ignoring the wishes of local government.

The number one rule of operating a home based business is buy a home where a home based business is allowed. If you chose poorly, it's not ATF's fault.

The FFL licensing process is easy as pie.
1. Complete form 7
2. Submit photo and fingerprints
3. Wait a few weeks for interview.
4. Get FFL in mail
5. Profit.

Exactly. Boxing up handguns in my office and putting them in the passenger seat of my automobile to take them to fedex has a similar impact to the neighborhood as a sewage treatment plant. That's why the federal governmenthad to regulate it. It's more of an impact than a landscaping trailer or van parked in my neighbor's yard.

Why isn't the federal government dealing with the landscaper two doors down from me? Because it's not a federal problem. And neither are any other local laws. The purpose of enforcing compliance with local laws was to limit the number of dealers for the ATF to enforce compliance on when the Brady Bill was passed.

You missed a step on the easy as pie process to get a license.

Get an occupational license for "Retail- Firearms". Go to the county. They refuse. Ask for a supervisor. Listen to the supervisor tell you they can't issue a retail firearms occupational license if you don't have a FFL. Explain why it doesn't make sense to require that you have to have an occupational license to get a FFL AND require a FFL to get an occupational license. Listen to them tell you the state told them they can't issue the occupational license without a FFL. Ask who the hell "the state" is. They write down the phone number for "the state". You recognize the number as the ATF agent you spoke to yesterday, who told you you needed a license for "Retail-Firearms". Hear the same story from him about the catch-22, and you explain that's not what the ATF website or the law says. He tells you that they really don't want to issue a FFL. But he'll call the county and talk to them for you, like he's doing you a favor- and really, he is, because there's no law saying he can't continue lying to them. The next afternoon, take off work again and buy your occupational license.

The point of that is that a rule about following local laws gives the ATF a lot of power to discourage or ban you from getting a license. They may not have formal authority to deny a license, bit they have lots of informal authority.

 

[dogtown tom]

Exactly. Boxing up handguns in my office and putting them in the passenger seat of my automobile to take them to fedex has a similar impact to the neighborhood as a sewage treatment plant. That's why the federal governmenthad to regulate it. It's more of an impact than a landscaping trailer or van parked in my neighbor's yard.

You taking a firearm for shipment has nothing to do with FFL licensing.

Why isn't the federal government dealing with the landscaper two doors down from me? Because it's not a federal problem. And neither are any other local laws. The purpose of enforcing compliance with local laws was to limit the number of dealers for the ATF to enforce compliance on when the Brady Bill was passed.

Wrong.
If the landscapers are using chemicals whose use is regulated by the EPA the feds most certainly have jurisdiction.
If the landscapers are dumping tree trimmings and other debris in a wetlands.....federal regulations apply.

And Wayne..........for goodness sakes learn what the Brady Law requires. It has nothing to do with ATF issuing an FFL.

You missed a step on the easy as pie process to get a license.

Get an occupational license for "Retail- Firearms". Go to the county. They refuse. Ask for a supervisor. Listen to the supervisor tell you they can't issue a retail firearms occupational license if you don't have a FFL. Explain why it doesn't make sense to require that you have to have an occupational license to get a FFL AND require a FFL to get an occupational license. Listen to them tell you the state told them they can't issue the occupational license without a FFL. Ask who the hell "the state" is. They write down the phone number for "the state". You recognize the number as the ATF agent you spoke to yesterday, who told you you needed a license for "Retail-Firearms". Hear the same story from him about the catch-22, and you explain that's not what the ATF website or the law says. He tells you that they really don't want to issue a FFL. But he'll call the county and talk to them for you, like he's doing you a favor- and really, he is, because there's no law saying he can't continue lying to them. The next afternoon, take off work again and buy your occupational license.

I didn't miss anything.
Reread what I wrote: The number one rule of operating a home based business is buy a home where a home based business is allowed. If you chose poorly, it's not ATF's fault.
If you local government makes it as difficult as you describe....you chose poorly. For two reasons, first, it's not business friendly, second, it doesn't seem very Second Amendment friendly.
Move to a gun friendly state 'cause you sure as heck aren't in one. Complaining about HOA's is the same.....don't live in an HOA then whine about HOA restrictions.

The point of that is that a rule about following local laws gives the ATF a lot of power to discourage or ban you from getting a license. They may not have formal authority to deny a license, bit they have lots of informal authority.

An FFL is a "shall issue". Meaning if you can legally operate a business at your proposed premises, ATF will issue the FFL.
If you can't.....that ain't ATF's fault. ATF doesn't give a rats hind end if your business location is your home or a stand alone brick and mortar.

Thinking your FFL should be issued and allow you to operate a firearm business despite state and local laws that prohibit such? Yeah, that's called stupidity.

The point of that is that a rule about following local laws gives the ATF a lot of power to discourage or ban you from getting a license. They may not have formal authority to deny a license, bit they have lots of informal authority.

An FFL is a license to engage in the business of dealing in firearms, lawfully.
If you are going to sell guns contrary to your local and state laws why worry about an FFL in the first place?

At some point you're gonna realize that having an FFL won't keep local and state governments from shutting your business down because you violated those local laws.

 

[dogtown tom]

So, if you are considered a dealer then the ATF can come to your house totally unannounced and ruin your day looking for a crime. Isn't that how it works today? Why are people so interested in giving so much power to the government?

Huh?