This is a proposed rule (not final) that would roll back and simplify ATF’s prior expansion of the “engaged in the business” definition, removing presumptions and extra regulatory language and returning mostly to the statutory definition passed by Congress.
Impact: High—reduces regulatory ambiguity and perceived overreach, but may result in fewer people being required (or feeling required) to get an FFL.
Applies to: Both individuals and FFLs.
What this rule means
In 2024, ATF issued a rule expanding and interpreting what it means to be “engaged in the business” of dealing firearms (which requires an FFL).
That rule:
- Added presumptions and examples of when someone is considered a dealer
- Broadened interpretation of who might need an FFL
- Created concern that it effectively pushed toward “universal background checks” through regulation
This new rule proposes to undo much of that expansion and return to:
- The plain statutory definition from Congress (BSCA)
- A more traditional, case-by-case analysis
What the rule actually does
If finalized, this rule would:
- Remove “presumptions” of being a dealer
The prior rule said you were presumed to be “engaged in the business” if, for example:
- You resold firearms quickly
- You sold certain types repeatedly
- You used payment systems like a business
This rule removes those presumptions because:
- They risked shifting the burden onto the individual to prove innocence
- Courts found them problematic
- ATF admits they were unnecessary and not actually used
- Return to a facts-and-circumstances standard
Instead of bright-line rules, it goes back to:
You are a dealer if:
- You repetitively buy and sell firearms
- With the intent to make a profit
No fixed number of sales triggers it:
- Selling 2 guns could qualify
- Selling 50 might not (if it’s a personal collection)
- Broaden what counts as a “personal collection”
The prior rule:
- Narrowly defined what counted as a collection
- Excluded things like firearms for self-defense
This rule:
- Removes those restrictions
- Returns to a broader, common-sense understanding:
- Personal, non-commercial ownership = not a business
- Remove restrictions on former FFL inventory
The prior rule:
- Limited how former FFLs could sell leftover inventory
- Imposed long-term restrictions
This rule:
- Removes those constraints
- Allows former FFLs to:
- Sell firearms occasionally like any private individual
- BUT:
- Still prohibits acting like a dealer without a license
- Keep core statutory definitions
The rule still keeps:
- The BSCA definition:
- “Predominantly earn a profit”
- Core licensing requirement:
- If you act like a dealer → you need an FFL
What will change (real-world impact)
For Individuals (Major Impact):
- Less risk of being unintentionally classified as a dealer
- More freedom to:
- Buy/sell from personal collection
- Sell occasionally without fear of crossing unclear lines
- But:
- Still illegal to act like a business without a license
For FFLs:
- Slight reduction in competitive pressure from forced licensing expansion
- Less regulatory ambiguity in advising customers
For the system overall:
- Fewer people may:
- Apply for FFLs
- Conduct background checks
- ATF acknowledges:
- Possible (but minimal) increase in unlicensed dealing risk
Key Takeaways
- Removes controversial “presumptions” of being a dealer
- Returns to a case-by-case, intent-based standard
- Expands protection for personal collection activity
- Reduces perceived regulatory overreach
- Does NOT eliminate the requirement to get an FFL if truly operating as a business
Proposed Rules to Be Published:
DEPARTMENT OF JUSTICE
Bureau of Alcohol, Tobacco, Firearms, and Explosives
27 CFR part 478
[Docket No. ATF-2026-0074; ATF 2025R-27P]
RIN 1140-AB01
Revising Regulations Defining “Engaged in the Business” as a Dealer in Firearms
AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives, Department of Justice.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) is
proposing to revise regulations implementing the “engaged in the business” definition from
the Bipartisan Safer Communities Act (“BSCA”). Although Congress defined that term in
BSCA, the Department of Justice (“Department”) provided additional definitions in its
implementing regulations to further define terms within the statutory definition and to
include examples of covered activities that established rebuttable presumptions of being
engaged in the business of dealing in firearms. This rule proposes to remove those changes.
ATF has determined that the changes have not shown the expected impact on federal
firearms licensee applications, administrative licensing actions, civil forfeitures, or other
anticipated effects.
DATES: Comments must be submitted in writing, and must be submitted on or before (or, if
mailed, must be postmarked on or before) [INSERT DATE 90 DAYS AFTER DATE OF
PUBLICATION IN THE FEDERAL REGISTER]. Commenters should be aware that the
federal e-rulemaking portal comment system will not accept comments after midnight
Eastern Time on the last day of the comment period.
ADDRESSES: You may submit comments, identified by RIN 1140-AB01, by either of the
following methods—• Federal e-rulemaking portal: https://www.regulations.gov. Follow the instructions for
submitting comments.
• Mail: ATF Rulemaking Comments; Mail Stop 6N-518, Office of Regulatory Affairs;
Enforcement Programs and Services; Bureau of Alcohol, Tobacco, Firearms, and Explosives;
99 New York Ave, NE; Washington DC 20226; ATTN: RIN 1140-AB01.
Instructions: All submissions must include the agency name and number (RIN 1140-
AB01) for this notice of proposed rulemaking (“NPRM” or “proposed rule”). ATF may post
all properly completed comments it receives from either of the methods described above,
without change, to the federal e-rulemaking portal, https://www.regulations.gov. This
includes any personally identifying information (“PII”) or business proprietary information
(“PROPIN”) submitted in the body of the comment or as part of a related attachment they
want posted. Commenters who submit through the federal e-rulemaking portal and do not
want any of their PII posted on the internet should omit it from the body of their comment
and any uploaded attachments that they want posted. If online commenters wish to submit
PII with their comment, they should place it in a separate attachment and mark it at the top
with the marking “CUI//PRVCY.” Commenters who submit through mail should likewise
omit their PII or PROPIN from the body of the comment and provide any such information
on the cover sheet only, marking it at the top as “CUI//PRVCY” for PII, or as
“CUI//PROPIN” for PROPIN. For detailed instructions on submitting comments and
additional information on the rulemaking process, see the “Public Participation” heading of
the SUPPLEMENTARY INFORMATION section of this document. In accordance with 5
U.S.C. 553(b)(4), a summary of this rule may be found at https://www.regulations.gov.
Commenters must submit comments by using one of the methods described above, not by
emailing the address set forth in the following paragraph.
FOR FURTHER INFORMATION CONTACT: Office of Regulatory Affairs, by email at
ORA@atf.gov, by mail at Office of Regulatory Affairs; Enforcement Programs and Services;Bureau of Alcohol, Tobacco, Firearms, and Explosives; 99 New York Ave, NE; Washington,
DC 20226, or by telephone at 202-648-7070 (this is not a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
The Attorney General is responsible for enforcing the Gun Control Act of 1968
(“GCA”), as amended. This responsibility includes the authority to promulgate regulations
necessary to enforce the provisions of the GCA.1 See 18 U.S.C. 926(a). Congress and the
Attorney General have delegated the responsibility for administering and enforcing the GCA
to the Director of ATF (“Director”) subject to the direction of the Attorney General and the
Deputy Attorney General. See 28 U.S.C. 599A(b)(1), (c)(1); 28 CFR 0.130(a)(1)–(2); Treas.
Order No. 221(2)(a), (d), 37 FR 11696–97 (June 10, 1972).2 Accordingly, the Department
and ATF have promulgated regulations to implement the GCA in 27 CFR part 478.
The GCA, at 18 U.S.C. 922(a)(1)(A) and as implemented at 27 CFR 478.41(a),
makes it unlawful for any person, except a federal firearms licensee (“FFL” or “licensee”)—
that is a licensed dealer, manufacturer, or importer—to ‘‘engage in the business’’ of dealing
in, manufacturing, or importing firearms. A person may file an application with and receive
such a license from ATF, to which the Attorney General has delegated the licensing function.
See 18 U.S.C. 923(a); 27 CFR 478.41(b). Licensees are generally required to conduct
background checks on prospective firearm recipients through the Federal Bureau of
Investigation’s National Instant Criminal Background Check System (“NICS”) to prevent
prohibited persons from receiving firearms. See 18 U.S.C. 922(t). Licensees also must
1 Some GCA provisions still refer to the “Secretary of the Treasury.” However, the Homeland Security Act of
2002, Pub. L. 107–296, 116 Stat. 2135, transferred the functions of ATF from the Department of the Treasury to
the Department of Justice, under the general authority of the Attorney General. 26 U.S.C. 7801(a)(2); 28 U.S.C.
599A(c)(1). Thus, for ease of reference, this proposed rule refers to the Attorney General where relevant.
2 In Attorney General Order Number 6353–2025, the Attorney General delegated authority to the Director to
issue regulations pertaining to matters within ATF’s jurisdiction, including under the National Firearms Act,
GCA, and Title XI of the Organized Crime Control Act. ATF’s jurisdiction also includes those portions of
section 38 of the Arms Export Control Act pertaining to the permanent import of defense articles and defense
services and the Contraband Cigarette Trafficking Act.maintain firearms transaction records for crime-gun tracing purposes. See 18 U.S.C.
923(g)(1)(A).
In 1986, Congress passed the Firearms Owners’ Protection Act (‘‘FOPA’’), Pub. L.
99–308 (1986), in which it defined the term “engaged in the business” for purposes of the
GCA as applied to a dealer.3 The statute defined a dealer engaged in the business as ‘‘a
person who devotes time, attention, and labor to dealing in firearms as a regular course of
trade or business with the principal objective of livelihood and profit through the repetitive
purchase and resale of firearms.’’ 18 U.S.C. 921(a)(21)(C) (2020). FOPA also defined the
phrase ‘‘with the principal objective of livelihood and profit’’ to mean ‘‘that the intent
underlying the sale or disposition of firearms is predominantly one of obtaining livelihood
and pecuniary gain, as opposed to other intents, such as improving or liquidating a personal
firearms collection.’’ FOPA, Pub. L. 99–308, sec. 101 (adding paragraphs (21)(C) and (22)
to 18 U.S.C. 921(a)); see also 18 U.S.C. 921(a)(22) (2020). FOPA’s definition of ‘‘engaged
in the business’’ as a dealer was incorporated into ATF’s implementing regulations at 27
CFR 178.114 (now § 478.11) as ‘‘Dealer in firearms other than a gunsmith or a
pawnbroker.’’ 27 CFR 478.11.
On June 25, 2022, Congress passed the Bipartisan Safer Communities Act (“BSCA”),
Pub. L. 117–159. Among other provisions, section 12002 of BSCA broadened the statutory
definition of “engaged in the business” by eliminating the requirement that a person’s
“principal objective” of purchasing and reselling firearms must include both “livelihood and
profit” and replacing it with a requirement that the person must intend “to predominantly
3 ATF notes that there is there is some overlap in statutory control of firearms for purposes of the GCA and for
purposes of section 38 of the Arms Export Control Act. Any person (1) who “engages in the business of”
manufacturing, exporting, or temporarily importing defense articles and defense services related to certain
firearms on the United States Munitions List and designated in the International Traffic in Arms Regulations
(“ITAR”), 22 CFR parts 120–130, at 22 CFR 121.1, or (2) who engages in the brokering of firearms designated
at that section and those firearms designated as defense articles on the U.S. Munitions Import List at 22 CFR
447.21, is required to register with the Department of State and pay a fee. These requirements are prescribed at
sections 122.1 and 129.3 of the ITAR and are distinct from the requirements discussed in this proposed rule and
the definition of “engaged in the business” at 18 U.S.C. 921(a)(21).
4 Commerce in Firearms and Ammunition, 53 FR 10480, 10491 (Mar. 31, 1988).earn a profit.” The statute now provides that, as applied to a dealer in firearms, the term
“engaged in the business’’ means ‘‘a person who devotes time, attention, and labor to dealing
in firearms as a regular course of trade or business to predominantly earn a profit through the
repetitive purchase and resale of firearms.’’ 18 U.S.C. 921(a)(21)(C) (emphasis added).
BSCA defined the term “predominantly earn a profit” to mean that the intent underlying the
sale or disposition of a firearm is for pecuniary gain rather than for other purposes, such as
selling a personal firearms collection. 18 U.S.C. 921(a)(22). Prior to BSCA, this term
required the principal objective of selling or disposing firearms to be both for profit and, in
addition, maintaining a livelihood. BSCA’s statutory amendment to the term “predominantly
earn a profit” shifts the primary focus to the intended pecuniary gain from selling or
disposing firearms even when such activity is not the person’s main source of income.
When drafting regulations to implement BSCA, the Biden Administration directed
the Department to further clarify, through rulemaking, the meaning of the term “engaged in
the business.” Specifically, President Biden issued Executive Order 14092, which required
the Attorney General to develop and implement a plan to, in relevant part, “clarify the
definition of who is engaged in the business of dealing in firearms, and thus required to
become [FFLs], in order to increase compliance with the federal background check
requirement for firearm sales, including by considering a rulemaking, as appropriate and
consistent with applicable law; [and] prevent former FFLs whose licenses have been revoked
or surrendered from continuing to engage in the business of dealing in firearms.”5 The Biden
Administration attempted to implement policy changes that went far beyond the regulatory
changes necessary to implement BSCA.
The Department published a final rule, titled “Definition of ‘Engaged in the Business’
as a Firearms Dealer,” 89 FR 28968 (Apr. 19, 2024) (“EIB rule”), which became effective on
5 Reducing Gun Violence and Making Our Communities Safer, E.O. 14092, sec. 3(a)(i), 88 FR 16527, 16527–
28 (Mar. 14, 2023).May 20, 2024. The EIB rule amended the regulations in 27 CFR part 478 to (1) incorporate
BSCA’s definition of the term “engaged in the business,” (2) provide clarification and
guidance on what it means to be “engaged in the business” and to have the requisite intent to
“predominantly earn a profit,” and (3) identify conduct that was presumed to constitute
“dealing” and to show relevant intent. See 89 FR 28968. The EIB rule also defined the term
“responsible person” and addressed the procedures former licensees must follow when they
liquidate business inventory when their license is terminated. Id.
Although the EIB rule purported to provide clarification and guidance, many
provisions of the rule were—and are—at odds with the statutory text. By broadly defining
the concept of unlawful dealing, for instance, the Biden Administration began to approach a
system of universal background checks through administrative regulation. For example, one
definition narrowed the range of firearms that could permissibly be deemed part of a
“personal collection,” and thus, that may be liquidated by unlicensed persons. The
Department also adopted fact-pattern presumptions that many objectors believed, in practice,
would relieve the Government of its burden of proof to demonstrate unlawful dealing.
The EIB rule was immediately the subject of litigation. On June 12, 2024, the United
States District Court for the Northern District of Texas enjoined ATF from enforcing the rule
as to the plaintiffs—one individual, four advocacy groups, and the States of Texas,
Mississippi, Louisiana and Utah—for the pendency of the litigation.6 In addition, the district
court found that several regulatory presumptions in the EIB rule conflict with the statute.7 In
particular, it found that ATF had no authority to use administrative regulations to expand the
zone of firearms-dealing subject to regulation beyond that which Congress statutorily
created. In subsequent litigation, the United States District Court for the District of Kansas
6 See Texas. v. ATF, 737 F. Supp. 3d 426 (N.D. Tex. 2024).
7 See id. at 442 (stating that “several presumptions conflict with the statutory text. Two of them, for example,
provide that a person is presumptively ‘engaged in the business’ if the person ‘demonstrates a willingness and
ability to purchase and resell’ firearms or ‘purchases … or … resells’ firearms”).denied a motion for preliminary injunction, on both standing and the merits,8 as did the
United States District Court for the Northern District of Alabama with respect to standing.9
However, on September 30, 2025, the Northern District of Alabama granted the plaintiff’s
motion for summary judgment. The Northern District of Alabama found that the plaintiffs
had established standing. On the merits, the court determined that ATF exceeded its statutory
authority in issuing the final rule and that the rule improperly expanded the statutory
definition of “engaged in the business.”10
II. Proposed Rule
On further review, ATF agrees that the EIB rule is replete with procedural and
substantive problems. Consequently, ATF proposes repealing those sections of the EIB rule
that do not correctly implement the GCA and BSCA. ATF does not propose, however, to
repeal the EIB rule in its entirety. Some sections of the EIB rule will be retained—for
example, those providing for the discontinuance of business operations—although this rule
proposes to amend some of those provisions.
A. Presumptions
The EIB rule created fact-pattern presumptions that a person was engaged in the
business. These presumptions were intended to be used to determine whether a person was
engaged in the business as a dealer and whether a person had the intent to predominantly earn
a profit. See 89 FR 28975–80. For example, a person would be presumed to be engaged in
the business when a person repetitively resells or offers for resale firearms—
(i) within 30 days after the person purchased the firearms; or
(ii) within one year after the person purchased the firearms if they are—
(A) new, or like new in their original packaging; or
8 See Kansas v. Garland, 2024 WL 3360533, at *9 (D. Kan. July 10, 2024) (finding “serious issues appear in
Plaintiffs’ standing and merits arguments that prevent them from making the strong showing necessary to obtain
injunctive relief”).
9 Butler v. Garland, 2024 WL 5424418 (N.D. Ala. Nov. 4, 2024).
10 Butler v. Bondi, 805 F. Supp. 3d 1175 (N.D. Ala. 2025).(B) the same make and model, or variants thereof.
27 CFR 478.13(c). Additionally, 27 CFR 478.13(d)(2) identified seven circumstances that
create a presumption of intent to predominantly earn a profit, which included, for example,
when a person “[p]urchases or otherwise secures merchant services as a business (e.g., credit
card transaction services, digital wallet for business) through which the person intends to
repetitively accept payments for firearms transactions.”
The EIB rule’s stated intent was to (1) license more persons; (2) deter others from
engaging in the business without a license; (3) increase the number of background checks by
increasing the licensed population; and (4) expand the reach of crime-gun trace requests by
increasing the licensed population. See 89 FR 28968.
With respect to the first two purposes, ATF’s position is the presumptions created by
the EIB rule were largely unnecessary because the statutory definition is readily
comprehensible. For dealers, the core of being engaged in the business requires the intent to
profit from the repeated buying and selling of firearms. In other words, a person must be a
wholesaler or retailer of new or used goods. For example, a person who buys ten models of
the same handgun, with the predominant intent to resell for a profit, and then proceeds to sell
any number of them repetitively three days later at a flea market is engaged in the business
within the statutory definition. See 18 U.S.C. 921(a)(21)(C) (applying the definition of
“engaged in the business” as a dealer). That person would be engaged in the business from
the moment he made repetitive sales with the intent to profit. Even if the individual sold only
two firearms, the individual intended to engage in a course of business dealings and then
began doing so. Courts have held that such activity requires a license because the statute
reaches those who hold themselves out as retail sources of firearms.11 In contrast, selling two
11 See United States v. King, 735 F.3d 1098, 1107 (9th Cir. 2013) (upholding conviction of defendant who
attempted to sell one firearm and represented to buyer that he could purchase more for resale, and noting that
“Section 922(a)(1)(A) does not require an actual sale of firearms”); United States v. Zheng Jian Shan, 90 F.
App’x 31 (9th Cir. 2003) (holding that evidence of sale of weapons in one transaction where defendant
demonstrated willingness and ability to resell more weapons was enough to affirm conviction).firearms from a personal collection in two isolated transactions does not rise to the level of
engaging in the business because there is no intent to engage in repetitive buying and selling
for profit.
More importantly, the existence of these presumptions created a serious risk of abuse
in civil and administrative proceedings. The court of appeals cases relied upon by the EIB
rule used the strong form of rebuttable presumptions: the fact will be presumed to exist until
the defendant offers enough evidence to disprove it. See 89 FR 29007. The citations in the
EIB rule indicate—or at the very least, raise the risk that courts might erroneously
conclude—that the EIB rule was intended to do more than simply shift the burden of
production. Potentially shifting the burden of proof to the defendant raised concerns among
the regulated public, Members of Congress, and others that ATF illegitimately attempted to
relieve the Government of its burden of proof in civil and administrative proceedings.
Indeed, in Texas v. ATF, the district court found the presumptions to be highly problematic
because “they flip the statute on its head by requiring that firearm owners prove innocence
rather than the government prove guilt.”12 It further stated that “[p]resumptions, especially in
administrative proceedings that may generate institution-destroying liability, cannot be a
matter of Department ipse dixit.”13 Thus, on further review, ATF agrees that the risk that the
presumptions could have been used erroneously to relieve the Government of its burden of
proof justifies discarding the presumptions.
While the Department disclaimed that the presumptions were designed to relieve the
Government of its burden of proof (and the EIB rule stated that “the rebuttable presumptions
apply only to shift the burden of production,” 89 FR 29007), that disclaimer rests on a
questionable foundation. The presumptions all involved fact patterns from which a fact finder
could find that a person was engaged in the business. Given that the presumptions already
12 Texas v. ATF, 737 F. Supp. 3d at 442.
13 Id.involved facts sufficient to create a prima facie case, the defendant would already be exposed
to a legal judgment unless he came forward with sufficient facts to explain the plaintiff’s
case. Switching only the burden of production would have had no further effect. In light of
the foregoing, the rule could be reasonably perceived as shifting the burden to the individual
to disprove the presumption. At minimum, even if the EIB rule truly meant to shift only the
burden of production—and nothing else—then the presumptions were unnecessary.
To be clear, discarding the presumptions does not mean that a person who engages in
behavior identified by the presumptions will not be found to be engaged in the business. The
actions identified by the presumptions in EIB provide circumstantial evidence from which a
fact finder could potentially find that a person was engaged in the business. Removing the
EIB rule’s legal presumptions simply prevents this evidence from being given dispositive
effect unless the firearm seller can carry the burden of disproving that he was engaged in the
business.
Furthermore, ATF has not used the EIB rule’s presumptions in civil proceedings,
showing they were in fact unnecessary in practice. An anecdotal survey of ATF’s field
divisions uncovered no instances in which the presumptions were cited in civil proceedings
in the time since the EIB rule became effective. ATF may revoke a license or deny a renewal
application in a civil administrative proceeding if the licensee willfully violated 18 U.S.C.
922(a)(1)(A), which prohibits a person from engaging in the business as a dealer without a
license, or aided and abetted others in willfully engaging in the business of dealing in
firearms without a license. Since publishing the EIB rule in April 2024, ATF has brought two
such proceedings against licensees. A review of these proceedings reflects that none of the
presumptions set forth in 27 CFR 478.13 were cited or referenced by ATF in support of these
actions. Given that the presumptions have not actually proven to be significant to or applied
in ATF proceedings, and likewise do not appear to have had the expected effect of increasing
the number of licensees, see infra, rescinding the presumptions is warranted to preservepublic confidence in ATF proceedings and avoid a perception that such proceedings are or
may be biased.
Moreover, mandatory presumptions have little role in the enforcement of the GCA’s
provisions against dealing without a license. The EIB rule suggested that the presumptions
could be used “to determine whether to deny or revoke a federal firearms license.” 89 FR
28969. But ATF’s administrative adjudications, which usually involve license revocations,
operate only on those who are already licensed. The EIB rule also suggested that they might
have application “in civil asset forfeiture proceedings,” 89 FR 28969, but ATF has no
anecdotal or statistical information that indicates it has used any of the presumptions in a
civil forfeiture matter involving dealing without a license since the EIB rule was published.
As a matter of policy, ATF has concerns about seizing property through the use of regulatory
presumptions.
Individuals who engage in dealing without a license are primarily subject to criminal
sanction. In criminal proceedings, the presumptions were intended to be useful to courts to
the extent that jury instructions could incorporate permissible inferences if the case involved
a fact pattern that matched one of the presumptions. 89 FR 28976, 28982, 29014. But ATF is
not aware of the presumptions facilitating criminal enforcement. As the EIB rule recognized,
see 27 CFR 478.13(h), mandatory presumptions cannot be employed in criminal proceedings.
See Sandstrom v. Montana, 442 U.S. 510 (1979). Further, as with the civil revocation
proceedings mentioned above, ATF is not aware of any criminal proceedings where
presumptions have been invoked as permissible inferences since the EIB rule was published.
Instead of presumptions or permissive inferences, judges may simply instruct jurors on the
factors relevant to determining whether someone is engaged in the business—an instruction
that judges already give. See, e.g., Pattern Jury Instruction, 5th Circuit, 2024 922(a)(1)(A)“engaged in the business”;14 Pattern Jury Instructions, 9th Circuit, 14.3 – 922(a)(1)(A).15
Definition’s scope
Other aspects of the EIB rule may create confusion around conduct that falls outside
the GCA’s definition of being engaged in the business. For example, as discussed in the EIB
rule, courts have stated that an isolated firearm transaction would not require a license when
other factors were not present.16 Nor are persons engaged in the business when they engage
in repeated sales of firearms if the predominant intent is something other than earning a
profit; for example, collectors who buy and sell repeatedly to enhance their personal
collections. See 18 U.S.C. 921(a)(21)(C). In these circumstances, the GCA does not require
persons to obtain a license. Congress made a considered judgment that it did not intend
federal law to extend to the noncommercial, intrastate market. See GCA, Pub. L. No. 90-618,
sec. 101, 82 Stat. 1213, 1213-14 (1968) (reenacted chapter analysis without change)
(declaring that the GCA was enacted to “provide for better control of the interstate traffic of
firearms” and that Congress’ purpose in creating the GCA was “not . . . to place any undue or
unnecessary federal restrictions or burdens on law-abiding citizens with respect to the
acquisition, possession, or use of firearms”)
ATF has been diligent in providing guidance to the licensed and unlicensed
14 A number of factors may be considered in determining whether a defendant was “engaged in the business” of
dealing in firearms, including: (1) the quantity and frequency of sales; (2) the location of the sales; (3)
conditions under which the sales occurred; (4) the defendant’s behavior before, during, and after the sales; (5)
the price charged; (6) the characteristics of the firearms sold; and (7) the intent of the seller at the time of the
sales. United States v. Brenner, 481 F. App’x 124, 127 (5th Cir. 2012) (explaining that “the jury must examine
all circumstances” in determining whether the defendant was “engaged in the business” of dealing in firearms);
see also United States v. Garcia, No. 21-51065, 2023 WL 116727, *1 (5th Cir. Jan. (for recent
application).
15 The Government must prove beyond a reasonable doubt that a defendant “engaged activity than the occasional sale of a hobbyist or collector, and that [the defendant] devoted 5, 2023) and
in a greater degree of
time, attention, labor to selling firearms” as a trade or business with the intent of making profits through the repeated purchase
and sale of firearms. See United States v. King, 735 F.3d 1098, 1106 (9th Cir. 2013) (quoting 18 U.S.C.
921(a)(21)(C)). For a person to engage in the business of dealing in firearms, it is not necessary to prove an
actual sale of firearms.
16 89 FR 28976 (citing United States v. Carter, 203 F.3d 187, 191 (2d Cir. 2000) (“A conviction under 18
U.S.C. § 922(a) ordinarily contemplates more than one isolated gun sale.”)); United States v. Swinton, 521 F.2d
1255, 1259 (10th Cir. 1975) (“Swinton’s sale [of one firearm] to Agent Knopp, standing alone, without more,
would not have been sufficient to establish a violation of Section 922(a)(1). That sale, however, when
considered in conjunction with other facts and circumstances related herein, established that Swinton was
engaged in the business of dealing in firearms.” (internal citation omitted)).communities to ensure they consistently apply the legal standards associated with licensing
requirements.17 Similarly, as the EIB rule explained, there is an established set of case law
that clarifies the factors courts consider regarding whether an individual needs to be licensed.
See, e.g., 89 FR 28976–77, 28978–79, & nn.67–68, 72, 75–77, 82.
ATF recognizes that there is no bright line at which a person may cross the threshold
from engaging in personal sales to being engaged in the business of dealing firearms. The
GCA’s definition of “engaged in the business” is a standard, not a rule. The standard must be
applied to the factual scenario of each case. And as with any standard, there are paradigm
cases on either side, but no perfectly defined line between them. Nor is there any magic
number of sales that can make a person “engaged in the business.” 89 FR 29016. Persons
who sell two firearms can be engaged in the business, if they couple that sale with labor and
intent to engage in repeated commercial transactions for profit.18 Persons who sell 50
17 See ATF, FFL Newsletter at 9 (July 2017), https://www.atf.gov/media/28911/download
[https://perma.cc/34FE-F9TP] (gun show guidelines); ATF, Important Notice to FFLs and Other Participants at
Gun Shows, ATF Information 5300.23A (Rev. June. 2021), https://www.atf.gov/firearms/docs/guide/important-
notice-dealers-and-other-participants-gun-shows-atf-i-530023a/download [https://perma.cc/4PSR-VVD8]; ATF
Revised Ruling 69-59, Sales of firearms and ammunition at gun shows (1969),
[https://perma.cc/A9D4-5RKZ]; ATF, How may a licensee participate in the raffling of firearms by an
unlicensed organization?, https://www.atf.gov/firearms/questions-and-answers?page=10 (last reviewed May 22,
2020); ATF, FFL Newsletter at 8-9 (June 2021), https://www.atf.gov/firearms/docs/newsletter/federal-firearms-
licensee-ffl-newsletter-june-2021/download (addressing conduct of business at firearm raffles); Letter for
Pheasants Forever, from Acting Chief, Firearms Programs Division, ATF, at 1-2 (July 9, 1999) (addressing
nonprofit fundraising banquets); ATF, FFL Newsletter at 4-5 (Feb. 1999),
https://www.atf.gov/media/28801/download [https://perma.cc/36R3-RCB9] (addressing gun shows and events).
See ATF, FFL Newsletter at 5-6 (June 2010), https://www.atf.gov/media/28856/download
[https://perma.cc/LKC9-46BK] (flea market guidelines). See ATF, FFL Newsletter at 8 (June 2021),
[https://perma.cc/H5KY-5G9T] (addressing internet sales of firearms); ATF, FFL Newsletter at 3 (Sept. 2016),
https://www.atf.gov/media/28906/download [https://perma.cc/KY89-FRMZ] (addressing brokering firearms for
exportation); ATF, FFL Newsletter at 6-7 (Mar. 2023); ATF, FFL Newsletter at 9 (June 2021),
(discussing social media gun raffles) [https://perma.cc/H5KY-5G9T]; Letter for Outside Counsel to National
Association of Arms Shows, from Chief, Firearms and Explosives Division, ATF, Re: Request for Advisory
Opinion on Licensing for Certain Gun Show Sellers at 1 (Feb. 17, 2017); ATF, ATF Federal Firearms
Regulations Reference Guide, ATF Publication 5300.4, Q&A L1, at 207-08 (2014),
53004/download [https://perma.cc/KD35-AEXU]; ATF, FFL Newsletter at 3 (May 2001),
https://www.atf.gov/media/28811/download [https://perma.cc/46KY-3VUM] [ (addressing auctioning
firearms); ATF, FFL Newsletter at 7 (1990), https://www.atf.gov/media/28756/download
[https://perma.cc/L8QT-VTX6] (addressing auctioning firearms); and Letter for Editor, CarPac Publishing
Company, from Acting Assistant Director (Regulatory Enforcement), ATF, at 1-2 (July 26, 1979).
18 See King, 735 F.3d at 1107.firearms may not be engaged in the business if they are liquidating their personal collections,
at least in the absence of facts militating in the opposite direction.19 As the Supreme Court
has recognized, Congress may legislate “us[ing] imprecise terms,” Sessions v. Dimaya, 548
U.S. 148, 159 (2018), or a “qualitative standard,” Johnson v. United States, 576 U.S. 591,
604 (2015).
The core concept of being engaged in the business is clear: the intent to engage in a
course of repeated buying and selling predominantly motivated by profit. 18 U.S.C.
921(a)(21)(C). Individuals often meet this standard without question, particularly in cases
that lead to criminal prosecutions. In addition, criminal prosecutions under the GCA require a
showing of a willfulness mens rea, 18 U.S.C. 924(a)(1)(D), which requires showing that an
individual acted with knowledge that the individual’s conduct was unlawful. See Bryan v.
United States, 524 U.S. 184, 189 (1998) (maintaining that “the willfulness requirement of §
924(a)(1)(D) requires knowledge that the conduct is unlawful”). With respect to EIB,
Congress’s preference for an effort- and intent-based definition, over a bright numerical
threshold, does not merit retaining these presumptions as part of the definition or other
supposed clarifications in the EIB rule.
Increasing licensees and background checks
Some critics incorrectly suggested that the prior Administration used the EIB rule to
try to establish “universal background checks” by expanding the statutory definition to
capture additional transactions as retail sales requiring a license.20 But, the GCA allows a
19 See 18 U.S.C. 921(a)(22); see also, e.g., United States v. Mulholland, 702 F. App’x 7, 12 (2d Cir. 2017)
(“The definition does not extend to a person who makes occasional sales for a personal collection or hobby, id.,
and the government need only prove that a person was ‘ready and able to procure [firearms] for the purpose of
selling them from time to time.’” (quoting United States v. Nadirashvili, 655 F.3d 114, 199 (2d Cir. 2011)). But
see United States v. Brenner, 481 F. App’x 124, 127 (5th Cir. 2012) (defendant argued he was liquidating
personal collection, but court held engaged in the business due to facts on sales frequency, location, profit
margins, secretive sales and payments, and references to firearms “coming in” or as “brand new.”).
20 See Devan Cole & Hannah Rabinowitz, Biden administration finalizes rule to close ‘gun show loophole’ in
effort to combat gun violence, CNN Politics (Apr. 11, 2024), https://www.cnn.com/2024/04/11/politics/gun-
show-loophole-rule-finalized-biden-admin; see also Martha Minow, Not Born a Democracy: Constitutional
Preconditions, 67 Wm. & Mary L. Rev. 135, 172 n.176 (2025) (explaining that the Biden Administration
intended the executive order “to move the United States as close to universal background checks as possible
without additional legislation”).non-licensee to transfer a firearm to another non-licensee within the same state without
conducting a background check.21 Both the GCA and FOPA left the noncommercial,
intrastate market primarily regulated by state law. BSCA did not change that basic decision.
BSCA was designed to provide clarification by changing the wording of the statutory
definition about when a person should be licensed. According to BSCA’s sponsors, the Act’s
change to the definition was driven by “confusion about the GCA’s definition of ‘engaged in
the business,’ as it pertained to individuals who bought and resold firearms repetitively for
profit, but possibly not as the principal source of their livelihood.”22 The sponsors
“maintain[ed] that these changes clarif[ied] who should be licensed, eliminating a ‘gray’ area
in the law, ensuring that one aspect of firearms commerce is more adequately regulated.”23
The EIB rule thus could not, and did not, impose universal background check requirements.
And, as discussed, in light of Congress’ changes to carefully crafted clarifications of the
statutory language through BSCA’s amendments, it is unnecessary to supplement or confuse
the statutory language with further regulatory language.
Additionally, ATF has determined that the rule proved ineffective in its attempt to
increase the number of dealer licenses. In the time since the EIB rule went into effect, ATF
has not seen an increase in licenses and background checks. ATF has reviewed the number of
new applications the Federal Firearms Licensing Center received for Type 01 licenses
(Dealer in Firearms Other Than Destructive Devices) for fiscal years (“FYs”) 2021 through
21 18 U.S.C. 922(a)(3), (5) (requiring license to sell out of State); 922(t) (requiring licensees to conduct a
background check).
22 William J. Krouse, Cong. Rsch. Serv., IF12197, Firearms Dealers “Engaged in the Business” 2 (2022).
23 Id.; 168 Cong. Rec. H5906 (daily ed. June 24, 2022) (Statement of Rep. Jackson Lee) (“[O]ur bill would . . .
further strengthen the background check process by clarifying who is engaged in the business of selling firearms
and, as a result, is required to run background checks.”); 168 Cong. Rec. S3055 (daily ed. June 22, 2022)
(Statement of Sen. Murphy) (“We clarify in this bill the definition of a federally licensed gun dealer to make
sure that everybody who should be licensed as a gun owner is. . . . [The definition] is admittedly confusing. So
we simplified that definition and hope that will result—and I believe it will result—in more of these frequent
online gun sellers registering, as they should, as federally licensed gun dealers which then requires them to
perform background checks.”); see also Letter for Director, ATF, et al., from Sens. John Cornyn and Thom
Tillis at 2–3 (Nov. 1, 2022) (“BSCA provides more clarity to the industry for when someone must obtain a
federal firearms dealers license. In Midland and Odessa, Texas, for example, the shooter—who at the time was
prohibited form possessing or owning a firearm under federal law—purchased a firearm from an unlicensed
firearms dealer.”).Fiscal year Type 01 applications Total Type 01 licensees
2021 7,445 52,993
2022 5,619 52,173
4,544 50,314
47,776
2025, the four years preceding the EIB rule, and the one year since the rule was published.
See Table 1. Once issued, a federal firearms license is valid for a three-year period unless
terminated sooner, so there are more total Type 01 licensees in each year than the number of
applications persons submit to ATF in the same year. 18 U.S.C. 923(c), 27 CFR 478.49.
Table 1. Number of Type 01 dealer applications 2021-2025
2023 2024 2025 4,350 4,160 46,072
As Table 1 indicates, since FY 2021, there has been a decrease in both applications
for Type 01 licenses and the total number of Type 01 licensees in each fiscal year. The EIB
rule was intended to facilitate the recognition by more people that they must acquire a
license, which ATF expected would increase the number of persons becoming licensed as
dealers. However, that expected outcome has not occurred since the EIB rule became
effective. Instead, the number of Type 01 applications filed after the EIB rule continued to
decline, as did the number of Type 01 licensees. In FY 2024, ATF received 4,350 Type 01
applications and listed 47,776 Type 01 licensees. In FY 2025, ATF received a total of 4,160
Type 01 applications and listed 46,072 Type 01 licensees. As a result, contrary to ATF’s
intended expectation from the EIB rule, the EIB rule did not result in an increase in Type 01
licensees.
Personal collection
The EIB rule created a general definition of “personal collection” in 27 CFR 478.11
to identify the kinds of firearms that fall into the statutory exception to the definition of
engaged in the business. Section 478.13(a) states that the term “engaged in the business”
does not “include a person who makes occasional sales, exchanges, or purchases of firearms
for the enhancement of a personal collection or for a hobby, or who sells all or part of the
person’s personal collection of firearms.” This exception mirrors the statutory text, whichcreated this narrow, predetermined exception to the general rule that applies to all firearms
(and which still only requires a license if a person devotes time, attention, and labor to
repetitively purchasing and reselling firearms in the regular course of business with
predominant intent to profit). This narrow statutory exception to the general rule was created
by Congress to recognize that persons who collect firearms or own them for hobby purposes
might occasionally purchase and resell those firearms to enhance or liquidate their collection
and would be unlikely to be doing so as a profit-making course of business.
The general rule in the statute sets out a test for determining when firearms are being
sold in such a manner as to qualify as being engaged in the business. That test includes, as a
key element, intending predominantly to earn a profit from purchasing and reselling
firearms—without distinguishing what kind of firearm, who owns the firearm, or listing all
the other reasons persons might own the firearms. It is only in the exception that Congress
specified a particular set of firearms owned for particular purposes—personal collecting or
hobbies—which, if resold only occasionally, would automatically be treated as not being
engaged in the business.
The EIB rule added two parts to the definition of “personal collection” in § 478.11.
First, the rule defined “personal collection” to mean “[p]ersonal firearms that a person
accumulates for study, comparison, exhibition (e.g., collecting curios or relics, or collecting
unique firearms to exhibit at gun club events), or for a hobby (e.g., noncommercial,
recreational activities for personal enjoyment, such as hunting, skeet, target, or competition
shooting, historical re-enactment, or noncommercial firearms safety instruction).” Second,
the rule provided: “In addition, the term shall not include firearms accumulated primarily for
personal protection: Provided, that nothing in this definition shall be construed as precluding
a person from lawfully acquiring firearms for self-protection or other lawful personal use.”
There are strong arguments that the rule improperly attempted to narrow the categories of
accumulated firearms that would constitute a collection.The EIB rule adopted a narrower conception of what purposes in gathering firearms
might qualify for a “personal collection” by reading “personal collection” in 18 U.S.C.
921(a)(21)(C) with reference to the definition of “collector” in section 921(a)(13). On
reflection, ATF believes that that interpretation overreads section 921(a)(13). Although the
words have the same root (“collect”), the definition of “personal collection” in section
921(a)(21)(C) materially differs from the definition of “collector” in section 921(a)(13)
because of the separate functions that each provision serves. The function of “collector” and
“licensed collector” in paragraph (a)(13) is to designate a person who collects a limited class
of historical firearms (those defined as “curios or relics”), for which the GCA establishes
special licensing rules to facilitate noncommercial interstate buying and selling. In contrast,
the function of “personal collection” in section 921(a)(21)(C) is to create a safe harbor for
when an individual sells multiple firearms that he had previously accumulated for personal,
noncommercial use—with for personal, noncommercial use being the key distinction.
Consequently, there is no inconsistency between understanding “personal collection” to
mean firearms held by a person for private, noncommercial purposes, while recognizing that
certain types of collectors do not qualify as statutory “collectors” and, thus, cannot utilize the
special licensing provisions for those who collect curio and relic firearms. This definition
also harmonizes the GCA provision for licensees to have a “personal collection of firearms,”
18 U.S.C. 923(c)—that is, firearms the licensee maintains for personal, noncommercial use.
The EIB rule rested its amendments, in part, on narrow definitions of “collection.”
See 89 FR 28980 and n.88 (relying on Merriam-Webster’s definition to restrict a personal
collection to only those objects “gathered for study, comparison, or exhibition or as a
hobby”); 89 FR 29038, n.216 (relying on Encyclopedia Britannica’s definition, ‘‘a group of
interesting or beautiful objects brought together in order to show or study them or as a
hobby’’). Given these narrow definitions, the Department previously concluded that a
personal collection is limited to firearms “that a person accumulates for study, comparison,exhibition . . ., or for a hobby.” 27 CFR 478.11. Indeed, the Department specifically excluded
“firearms accumulated primarily for personal protection” as not part of a personal collection.
Id.
ATF now believes that the definitions identified by the EIB rule are too restrictive.
Individuals are engaged in the business when their relationship with the firearms is primarily
commercial—they are buying and selling for profit rather than for personal, noncommercial
use for self-defense, target shooting, gun collecting, hunting, and other lawful uses. To avoid
any contrary suggestion, ATF proposes rescinding subsection (1) of the definition.
Although ATF proposes rescinding subsection (1) of the definition of “personal
collection,” ATF believes subsection (2) of the definition, which defines licensee personal
collections, clearly and informatively sets out the actions licensees can take to distinguish a
personal firearm from a business one and comply with 18 U.S.C. 921(a)(21)(C). This aspect
of the definition provides greater clarity that aids the public in complying with the statute,
and ATF is therefore proposing to retain this portion of the definition.
Former licensee inventory
In conjunction with the licensee personal collection definition, the EIB rule also
added a definition in § 478.11 for “former licensee inventory” and set out guidelines a
licensee must follow to dispose of its firearms inventory when it is discontinuing business,
particularly if its license is revoked. The regulation treats all firearms purchased as part of a
licensee’s business inventory while licensed as retaining that classification indefinitely
because “they were purchased repetitively before the license was terminated as part of a
licensee’s business inventory with the predominant intent to earn a profit.” This definition,
together with §§ 478.57 (discontinuance of business) and 478.78 (operations by licensee after
notice), limits a former licensee to disposing of the inventory within 30 days after it
discontinues business and effectively prevents former licensees from reclassifying inventory
purchased repetitively with the intent to resell for profit while licensed as personal firearmsin a “personal collection” after they become unlicensed. See 27 CFR 478.57(b)(2) (providing
that a licensee may “[t]ransfer the former licensee inventory to a responsible person of the
former licensee to whom the receipt, possession, sale, or other disposition is not prohibited
by law,” but that any such transfer “does not negate the fact that the firearms were
repetitively purchased, and were purchased with the predominant intent to earn a profit by
repetitive purchase and resale”). The EIB rule explicitly authorized former licensees to sell
firearms only (1) “within 30 days [of termination of a license], or such additional period
approved by the Director for good cause,” or (2) on an “occasional” basis “thereafter to a
licensee.” 27 CFR 478.78(b)–(c). In other words, outside the 30-day window (and barring an
extension for good cause), former licensees were restricted from selling business inventory to
anyone, except for occasional sales to current FFLs.
Although some process for addressing the inventory of former licensees is
appropriate, the effectively permanent restraint on firearms sales after the 30-day period is
arguably unlawful. For example, upon winding down operations, a former licensee could
absorb twenty firearms from his business inventory into his personal collection in good faith.
A former licensee who sold one or two such firearms years later to a non-licensee would not
be engaged in the business under the statutory definition, and the GCA does not by its terms
restrict occasional sales of such firearms only to other FFLs. Such conduct stands in contrast
to a former licensee who immediately continues selling firearms acquired as business
inventory in repeated transactions after his license is discontinued. ATF recognizes concerns
about former licensees attempting to hold “fire sales” of large swathes of inventory without
adhering to recordkeeping and background check requirements. However, such scenarios are
clearly covered by statutory language, which prohibits engaging in the business without a
license.24 By contrast, a situation where a former licensee sells an occasional firearm in a
24 See Gilbert v. Bangs, 481 F. App’x 52 (4th Cir. 2012); United States v. Kish, 424 F. App’x 398 (6th Cir.
2011).private sale years later does not constitute the repetitive purchasing and selling that the GCA
was intended to cover. The GCA does not authorize former licensees to engage in the
business. But it also does not impose encumbrances on all firearms that were previously part
of a business’s inventory.
For all these reasons, this rule proposes to amend regulations in 27 CFR part 478 that
were created or changed by the EIB rule as described below.
B. Proposed revisions
For the reasons discussed above, ATF is proposing the following regulatory changes
related to the definition of engaged in the business as a dealer as implemented in §§ 478.11
and 478.13 via the EIB rule. ATF proposes to (1) move the current definition of “engaged in
the business as a dealer in firearms other than a gunsmith or pawnbroker,” set forth in §§
478.13(a) to 478.11, and (2) rescind § 478.13(b)–(h). Paragraphs (b) through (h) of § 478.13
include: (b) a statement that whether a person is engaged in the business as a dealer in
firearms other than a gunsmith or a pawnbroker is a fact-specific inquiry, (c) specific fact-
patterns establishing presumption that a person is engaged in the business as a dealer, (d) the
definition of “predominantly earn a profit,” (e) a list of conduct that does not support a
presumption, (f) evidence that may be used to rebut a presumption, (g) clarification that
itemized presumptions, conduct, and rebuttal evidence are not exhaustive lists, and (h)
clarification that the rebuttable presumptions do not apply to criminal proceedings.
ATF also proposes to retain the definition of “predominantly earn a profit” from §
478.13, with some revisions, and move it to § 478.11. The rest of § 478.13 would be
removed, except as provided in the following paragraph. ATF is also proposing to change the
definition of “personal collection” and remove the definition of “former licensee inventory,”
both in § 478.11. These proposed changes are described in detail below.
ATF proposes removing all of § 478.13 except: (1) the portion of the definition of
“engaged in the business as dealer in firearms other than gunsmith or pawnbroker” thatduplicates statutory language in 18 U.S.C. 921(a)(21)(C); (2) the added exception for
auctioneers who provide only auction services on a commission by assisting persons to
liquidate firearms in an estate-type sale;25 and (3) a revised version of the definition of
“predominantly earn a profit.” Because these remaining portions of § 478.13 would no longer
be long enough to warrant a separate definition section, ATF proposes moving all three of
these remaining portions from § 478.13 to § 478.11 (meaning of terms), where other
relatively short definitions are located.
ATF would place the definition of engaged in the business as a dealer under
paragraph (3) in the definition of “engaged in the business,” and the existing language in
paragraph (3), which references § 478.13, would be removed. The paragraph would retain the
same heading and would read, “A person who devotes time, attention, and labor to dealing in
firearms as a regular course of trade or business to predominantly earn a profit through the
repetitive purchase and resale of firearms. The term does not include a person who makes
occasional sales, exchanges, or purchases of firearms to enhance a personal collection or for
a hobby, or who sells all or part of the person’s personal collection of firearms.”
ATF would also move the auctioneer exception to paragraph (3) within the definition
of “engaged in the business” under § 478.11, at the end of the new paragraph described
above. Historically, licensees and non-licensees seeking guidance on the proper and lawful
way to liquidate firearms, both in the regular course of their business or as an isolated
occurrence, have commonly raised questions about auctioneers. Because ATF has regularly
provided consistent guidance on what type of auction activity crosses the threshold to
25 See ATF, Does an Auctioneer Who Is Involved in Firearms Sales Need a Dealer’s License?,
https://www.atf.gov/firearms/questions-and-answers?page=2 (last reviewed July 10, 2020); ATF, ATF Federal
Firearms Regulations Reference Guide, ATF Publication 5300.4, Q&A L1, at 207-08 (2014),
53004/download [https://perma.cc/KD35-AEXU]; ATF, FFL Newsletter at 3 (May 2001),
https://www.atf.gov/media/28811/download [https://perma.cc/46KY-3VUM] ; ATF Ruling 96-2, Engaging in
the Business of Dealing in Firearms (Auctioneers) (Sept. 1996), https://www.atf.gov/file/55456/download
[https://perma.cc/RCJ2-QA9H]; ATF, FFL Newsletter at 7 (1990), https://www.atf.gov/media/28756/download
[https://perma.cc/L8QT-VTX6]; Letter for Editor, CarPac Publishing Company, from Acting Assistant Director
(Regulatory Enforcement), ATF, at 1–2 (July 26, 1979).constitute engaging in the business of dealing in firearms, the portion of the definition that
incorporates that exception into the regulation provides definitional clarity to the public and
licensed community. Therefore, ATF proposes retaining the portion of § 478.13 that codifies
ATF’s historical position, thus ensuring consistency for industry members. Modifying or
removing this part of the definition would likely cause undue and unnecessary confusion.
This proposed change would therefore add the following text to the end of paragraph (3): “In
addition, the term does not include an auctioneer who provides only auction services on
commission to assist in liquidating firearms at an estate-type auction, as long as the
auctioneer does not purchase the firearms or take possession of the firearms for sale or
consignment.”
ATF would move the text of the definition in § 478.13 of “predominantly earn a
profit” to a location under the same definitional heading in § 478.11, and it would remove the
text currently under that heading, which references § 478.13. It is necessary to retain this
definition to distinguish between, on the one hand, what constitutes engaging in the business
as a dealer in firearms other than a gunsmith or pawnbroker; and, on the other hand, engaging
in the business as a gunsmith, pawnbroker, manufacturer, or importer—all of which continue
to require the “principal objective of livelihood and profit” that applied to dealers prior to
BSCA. The definition of “predominantly earn a profit” tracks the statutory definition;
however, ATF proposes making a minor change to one sentence of the definition, so it is
easier to read, without changing the meaning. Specifically, ATF proposes changing the
sentence, “Provided, that proof of profit, including the intent to profit, shall not be required
as to a person who engages in the regular and repetitive purchase and disposition of firearms
for criminal purposes or terrorism,” to “However, proof of profit, including the intent to
profit, is not required in cases in which the person engaged in regular and repetitive purchase
and disposition of firearms for criminal purposes or terrorism.” This change is in line with
one of the purposes for ATF’s implementing regulations, which is to aid the public inunderstanding and complying with statutory provisions, and it is consistent with laws
requiring plain writing. It does not modify or expand on the statutory meaning.
In addition, ATF proposes to remove the last sentence of the definition as it currently
exists in § 478.13, which reads, “For purposes of this section, a person may have the intent to
profit even if the person does not actually obtain the intended pecuniary gain from the sale or
disposition of firearms,” because this sentence is not in the statutory definition. The proposed
new definition of “predominantly earn a profit” would thus be “The intent underlying the sale
or disposition of firearms is predominantly one of obtaining pecuniary gain, as opposed to
other intents, such as improving or liquidating a personal firearms collection. However, proof
of profit, including the intent to profit, is not required in cases in which the person engaged in
the regular and repetitive purchase and disposition of firearms for criminal purposes or
terrorism.”
In addition to the above changes to § 478.13, ATF proposes two changes directly to §
478.11. Specifically, for the reasons discussed in section II.A of this preamble, ATF proposes
removing paragraph (1) of the definition of “personal collection (or personal collection of
firearms, or personal firearms collection),” moving paragraph (2) up to replace paragraph (1)
with changes necessary to conform it to regulatory paragraph designations, changing the
definition’s title to reflect the remaining content, and removing the definition “former
licensee inventory” entirely. The proposed heading for the definition of “personal collection
(or personal collection of firearms, or personal firearms collection)” would instead be
“licensee personal collection (or personal collection of licensee).” The rest of the definitional
text would remain the same as currently in § 478.13, but the paragraph designation would
change because it would no longer be paragraph (2).
In addition, the rule proposes to make changes to § 478.57 (Discontinuance of
business). The proposed rule would remove from paragraphs § 478.57(b)(2) and (c) the
relevant sentences that effectively restrict former licensees from reselling their firearmswithout being presumed to be engaged in the business. Specifically, it would remove from §
478.57(b)(2) the sentence that reads: “Any such transfer, however, does not negate the fact
that the firearms were repetitively purchased, and were purchased with the predominant
intent to earn a profit by repetitive purchase and resale.” And it would remove from §
478.57(c) the second sentence that provides that a former FFL who resells any of its former
business inventory is subject to the provisions of § 478.13. Because this rule proposes to
remove § 478.13, the provisions in these paragraphs would no longer be relevant. And
because these provisions are also found in § 478.78 (Operations by licensee after notice), this
rule proposes to remove from § 478.78(b)(2) and (c) the same sentences.
III. Statutory and Executive Order Review
A. Executive Orders 12866 and 13563
Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess
the costs and benefits of available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits.
Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes
the importance of agencies quantifying both costs and benefits, reducing costs, harmonizing
rules, and promoting public flexibility.
This proposed rule would retain the definition of “engaged in the business” as
specifically revised and defined in BSCA. In addition, this proposed rule would revise 27
CFR 478.13 to rescind paragraphs (b)–(h), which includes rebuttable presumption fact
patterns as to whether a person is engaged in the business as a dealer and whether a person
has predominant intent to profit, a list of conduct that does not support a presumption,
evidence that may be used to rebut a presumption, and other provisions related to applying
the presumptions. In addition, the rule also proposes to retain the definition of
“predominantly earn a profit” with some revisions, to change the definition of “personal
collection” to apply only to licensee personal collections and remove the definition of“former licensee inventory.” These provisions were included in the EIB rule to aid persons in
understanding and applying the statutory change from BSCA. In addition, the EIB rule did
not result in the anticipated increase in the number of licensees. As a result, removing or
revising these additional provisions does not generate a cost to the public.
The Office of Management and Budget (“OMB”) has determined that, although this
rule would not be economically significant under section (3)(f)(1) of Executive Order 12866,
it would be a “significant regulatory action” under the Order. OMB has therefore reviewed
this rule. ATF provides the following analysis to comply with Executive Orders 12866 and
13563. This proposed rule would revert the definition of “engaged in the business” to the one
outlined specifically by statute, without the additional provisions added by the previous rule.
As a result, this proposed rule would provide qualitative benefits to the public in the form of
reduced confusion and reduced concerns about perceived risk of over-enforcement, as well as
qualitative costs in the form of potential increase in persons who should be licensed
remaining unlicensed. This rule would not create quantifiable costs or burdens for the public.
1. Need statement
The EIB rule included provisions in addition to the statutory definitional change from
BSCA, and those provisions did not result in the projected increase in licensees. As
illustrated in Table 2, the number of all FFL applications has been decreasing since 2021.
Between the time the NPRM for the EIB rule was published in 2023 and was later finalized
in 2024, the number of applications for all FFLs decreased overall.
Table 2. Number of FFL applications by year
Year FFL applications
2020 12,537
2021 13,879
2022 10,811
2023 9,237
2024 8,679
2025 8,648The intended clarifying provisions instead created confusion and raised concerns by
commenters on the rule that the provisions could be misapplied and misunderstood in ways
that would constitute violations of law. As a result, ATF has determined that these provisions
should be removed or revised and that the definition of engaged in the business as a dealer
should be primarily limited to the statutory definition. The only way to make these regulatory
adjustments is through a rulemaking.
2. Cost Savings
This proposed rule would align with the definition of “engaged in the business” as
defined in the statute. As discussed in section II.A of this preamble, many firearms sales fall
outside the GCA’s definition of being engaged in the business. Nor are persons engaged in
the business if they repeatedly buy and sell primarily in order to maintain and enhance their
personal firearms collection rather than for profit. One of the qualitative cost savings of the
proposed rule is that it would reduce confusion and reduce the perceived risk of over-
enforcement. ATF, however, lacks the data necessary to quantify such savings.
Based on the historical data in Table 1 above, there were no incremental increases in
FFL dealer applications in the year and a half since the EIB rule was published; therefore, the
projected costs of that original rule, see 89 FR 29072–73 (analyzing expected costs for
unlicensed persons to become licenses), were not incurred. Furthermore, this rule would
maintain the minimum definitions as required by the statute. Costs arising from these
statutory definitions were already accounted for in the EIB rule. As a result, this proposed
rule would not have any quantifiable monetary cost savings.
3. Disbenefits
Potential qualitative disbenefits (i.e., adverse impacts) to this proposed rule may
include a de minimis increase in risk to public safety. In the EIB rule, ATF described
conditions in which an individual might be considered “engaged in the business” of selling
firearms. Some individuals who might have been active firearms sellers prior to the EIB rulemight have refrained from selling firearms after the EIB rule out of concern that their
conduct rose to the level of being “engaged in the business” because it would subject them to
the GCA’s requirements (e.g., record-keeping, conducting background checks, inspections).
If parts of the regulations implemented by the EIB rule are rescinded, these persons might
resume selling firearms actively without becoming licensed, just as they had prior to
publication of the EIB rule. This could mean that any risks regarding unlicensed sellers that
Congress perceived when initially enacting the GCA would not be addressed through
regulations clarifying the GCA’s requirements.
4. Regulatory alternatives
Alternative 1. Maintaining the status quo (the no-action alternative).
During the previous Administration, ATF published the EIB rule, in which ATF
included the statutorily revised definition of engaged in the business as a dealer and
additional regulatory provisions to further define and clarify the term and how persons could
determine its application. Upon further consideration, ATF has determined that the ensuing
confusion from these additional provisions may impose additional risks on members of the
public, who might interpret the rule as prohibiting them from purchasing firearms for self-
defense or protection and might make them feel chilled in purchasing and reselling personal
firearms occasionally without predominant intent to profit, as intended by Congress. Because
these provisions were added to ATF’s regulations, they would remain in effect unless ATF
were to engage in rulemaking to revise them. Therefore, ATF rejects maintaining the status
quo as an alternative due to the risk of chilling lawful firearms activities.
Alternative 2. Rulemaking (the proposed alternative).
ATF considered the alternative of rulemaking to revise or remove non-statutorily
required provisions in the current regulatory definition of engaged in the business as a dealer.
This would cause the regulatory definition to consist primarily of the statutory definition as
revised by Congress in BSCA. Based on historical data, there would be no additionalquantifiable costs or benefits incurred to the public from this proposed alternative. Revising
these regulatory provisions may reduce confusion that the added regulatory provisions may
have caused; however, it could conversely increase risk from active sellers, who are not
licensed, who resume sales and thus do not conduct background checks to ensure that
prohibited persons do not acquire firearms on the secondary market. Nevertheless, ATF
believes that the potential impact on public safety is de minimis. A solution, such as
guidance, would not have the same effect on existing regulatory provisions, as guidance
cannot contradict the regulations. As a result, ATF has determined that rulemaking is the best
alternative and the only way to remove the provisions that were causing confusion.
Alternative 3. Issuing guidance.
This alternative was considered but rejected. While this alternative would not impose
any additional costs, it would not rescind the presumptions currently published in regulation
or correct the other issues with the regulatory supplement to the “engaged in the business”
definition. As mentioned above, maintaining the legal presumptions in regulations would
continue to create concerns among the regulated public that ATF is illegitimately attempting
to relieve the Government of its burden of proof in civil and administrative proceedings. One
court has already opined that the presumptions are highly problematic because “they flip the
statute on its head by requiring that firearm owners prove innocence rather than the
government prove guilt.”26 Thus, ATF has determined that removing presumptions from the
regulations avoids the risk that, in real-world practice, the presumptions could have been
used to relieve the Government of its burden of proof. Leaving the presumptions in the
regulations while issuing guidance alone would not remedy the problems as discussed.
Therefore, issuing guidance as an alternative in lieu of removing the regulatory language at
issue was rejected.
B. Executive Order 14192
26 Texas v. ATF, 737 F. Supp. 3d at 442.Executive Order 14192 (Unleashing Prosperity Through Deregulation) requires an
agency, unless prohibited by law, to identify at least ten existing regulations to be repealed or
revised when the agency publicly proposes for notice and comment or otherwise promulgates
a new regulation that qualifies as an Executive Order 14192 regulatory action (defined in
OMB Memorandum M-25-20 as a final significant regulatory action under section 3(f) of
Executive Order 12866 that imposes total costs greater than zero). In furtherance of this
requirement, section 3(c) of Executive Order 14192 requires that any new incremental costs
associated with such new regulations must, to the extent permitted by law, also be offset by
eliminating existing costs associated with at least ten prior regulations. However, this
proposed rule would not be an Executive Order 14192 regulatory action. Although it would
be a significant regulatory action as defined by Executive Order 12866, it would not impose
total costs greater than zero. This proposed rule would provide qualitative benefits by
reducing confusion and concerns about perceived over-enforcement, specifically entailing
qualitative benefits to current and future firearm owners. Although it is possible that
removing the proposed provisions would result in some risk to public safety from persons
who would no longer feel constrained in dealing in firearms without a license, such a risk is
qualitative and speculative, imposing no quantifiable costs. Therefore, as discussed above,
this rule would not impose any additional quantifiable monetized costs, and total costs would
be less than zero. ATF therefore expects this rule, if finalized as proposed, to qualify as an
Executive Order 14192 deregulatory action (defined by OMB Memorandum M-25-20 as a
final action that imposes total costs less than zero).
C. Executive Order 14294
Executive Order 14294 (Fighting Overcriminalization in Federal Regulations)
requires agencies promulgating regulations with criminal regulatory offenses potentially
subject to criminal enforcement to explicitly describe the conduct subject to criminal
enforcement, the authorizing statutes, and the mens rea standard applicable to each elementof those offenses. This proposed rule would not create a criminal regulatory offense and is
thus exempt from Executive Order 14294 requirements.
D. Executive Order 13132
This proposed rule would not have substantial direct effects on the states, the
relationship between the federal Government and the states, or the distribution of power and
responsibilities among the various levels of government. Therefore, in accordance with
section 6 of Executive Order 13132 (Federalism), the Director has determined that this
proposed rule would not impose substantial direct compliance costs on state and local
governments, preempt state law, or meaningfully implicate federalism. It thus does not
warrant preparing a federalism summary impact statement.
E. Executive Order 12988
This proposed rule meets the applicable standards set forth in sections 3(a) and
3(b)(2) of Executive Order 12988 (Civil Justice Reform).
F. Regulatory Flexibility Act
the Regulatory required Under a regulatory Flexibility Act (“RFA”), 5 U.S.C. 601–612, agencies are
to conduct flexibility analysis of any proposed rule subject to notice-
and-comment rulemaking requirements unless the agency head certifies, including a
basis, that the impact on proposed rule statement of the factual small entities. Small would not have a significant economic
a substantial number of entities include certain small
businesses, small not-for-profit organizations that are independently owned and operated and
are not dominant in their fields, and governmental jurisdictions with populations of less than
50,000.
The Director certifies, after consideration, that this proposed rule would not have a
significant economic impact on a substantial number of small entities. This proposed rule is
deregulatory and would not impose any additional costs, including on small entities. The
proposed rule would remove or amend certain provisions related to the definition of engagedin the business as a dealer, the provisions of which expanded the scope of the definition
beyond the statute. The confusion and perceptions about these provisions have caused many
individuals to believe they might have to obtain a license in order to sell personal firearms
from their personal collections, for example. Although the EIB rule anticipated that the rule
would cause some persons operating unlicensed small businesses to become licensed as
dealers of firearms, ATF—as explained above in section II.A of this preamble—has not
observed an actual increase in the rate of licensure since the issuance of the EIB rule. In light
of the EIB rule’s apparent lack of effect on the operation of small businesses, ATF does not
believe that repealing certain provisions of EIB rule as proposed in this rule would affect
such businesses. Therefore, ATF does not believe that this proposed rule, if finalized, would
have a significant economic impact on a substantial number of small entities. ATF
nonetheless welcomes comments on any potential effects of this proposed rule on small
entities.
G. Unfunded Mandates Reform Act of 1995
This proposed rule does not include a federal mandate that might result in the
expenditure by state, local, and tribal governments, in the aggregate, or by the private sector,
of $100 million or more in any one year, and it would not significantly or uniquely affect
small governments. Therefore, ATF has determined that no actions are necessary under the
provisions of the Unfunded Mandates Reform Act of 1995.
H. Paperwork Reduction Act of 1995
Under the Paperwork Reduction Act of 1995 (“PRA”), 44 U.S.C. 3501–3521,
agencies are required to submit to OMB, for review and approval, any information collection
requirements a rule creates or any impacts it has on existing information collections. An
information collection includes any reporting, record-keeping, monitoring, posting, labeling,
or other similar actions an agency requires of the public. See 5 CFR 1320.3(c). This proposed
rule would impact four existing information collections covered under the PRA. Althoughthis rule involves the existing information collections, the proposed changes to the rule would
not add to or change the burden imposed on the information collection respondent as
compared to existing, OMB-approved requirements.
Licensing Information Collection Requirements (“ICRs”)
Numbers and titles: OMB control number 1140-0018, Application for a Federal
Firearms License, ATF Form 5310.12/ 5310.16 (“Form 7/7CR”), and OMB control number
1140-0019, Application for a Federal Firearms License — Renewal Application, ATF Form
5310.11 (“Form 8”)
Abstract: 18 U.S.C. chapter 44 prohibits any person from engaging in the business of
importing, manufacturing, or dealing in either firearms or ammunition without first obtaining
a license to do so. These activities are licensed for a specific period. The statute also provides
for a collector’s license. Persons who need to obtain a license submit Form 7/7CR to ATF,
and licensees who wish to continue to engage in the aforementioned firearms activities
without interruption, must renew their license by filing Form 8 before the current license
period expires.
Purpose: ATF uses Form 7 to identify the applicant and determine eligibility to
obtain a firearms license, and ATF uses Form 8 to identify the applicant and determine
eligibility to retain the license. Without these information collections, ATF would not be able
to issue or renew licenses to persons required by law to have a license to engage in the
business of dealing in firearms or shipping or transporting firearms in interstate or foreign
commerce in support of that business, or acquire curio and relic firearms from out of state.
The proposed rule does not change the requirements or purposes covered under these
information collections.
Record-keeping ICRs
Numbers and titles: OMB control number 1140-0020, Firearms Transaction Record,
ATF Form 5300.9 (“Form 4473”), and OMB control number 1140-0032, Records ofAcquisition and Disposition, Dealers of Type 01/02 Firearms, and Collectors of Type 03
Firearms
Abstract: 18 U.S.C. 922 and 923, and implementing regulations at 27 CFR 478.124,
prohibit certain persons from shipping, transporting, receiving, or possessing firearms. All
persons, including FFLs, are therefore prohibited from transferring firearms to such persons.
FFLs are also subject to additional restrictions on disposing of a firearm to an unlicensed
person under the GCA. For example, age and State of residence also determine whether a
person may lawfully receive a firearm. Form 4473 enables FFLs to determine if they may
lawfully sell or deliver a firearm to the prospective transferee, and to alert the buyer or other
transferee of certain restrictions on receiving and possessing firearms. The licensee must
determine the transaction’s lawfulness and maintain proper records of the transaction. The
GCA, 18 U.S.C. 923, also requires that licensees must keep records of each firearm they
acquire and dispose of, and ATF implementing regulations in 27 CFR 478.23(c)(1) and (2)
set forth the details required for those records, which are in addition to the Form 4473, the
purpose of which is primarily for a licensee to determine whether the requested sale is lawful.
Purpose: The Form 4473 information collection aids licensees in obtaining the
necessary information from which to make that determination and to use when submitting a
required NICS background check, and also serves as a record of the transaction, all of which
are necessary for the licensee to comply with the statutory requirements. The acquisition and
disposition record-keeping requirements ICR permits ATF to examine records during
inspections to ensure that licensees are complying with statutory and regulatory
requirements, and also serve as records licensees may search in response to a crime-gun trace
request from law enforcement agencies conduction investigations into crimes in which a
firearm was used.
IV. Public Participation
A. Comments soughtATF requests comments on the proposed rule from all interested persons. ATF
specifically requests comments on the clarity of this proposed rule and how it may be made
easier to understand. In addition, ATF requests comments on the costs or benefits of the
proposed rule and on the appropriate methodology and data for calculating those costs and
benefits.
All comments must reference this document’s RIN 1140-AB01 and, if handwritten,
must be legible. If submitting by mail, you must also include your complete first and last
name and contact information. If submitting a comment through the federal e-rulemaking
portal, as described in section IV.C of this preamble, you should carefully review and follow
the website’s instructions on submitting comments. Whether you submit comments online or
by mail, ATF will post them online. If submitting online as an individual, any information
you provide in the online fields for city, state, zip code, and phone will not be publicly
viewable when ATF publishes the comment on https://www.regulations.gov. However, if you
include such personally identifying information (“PII”) in the body of your online comment,
it may be posted and viewable online. Similarly, if you submit a written comment with PII in
the body of the comment, it may be posted and viewable online. Therefore, all commenters
should review section IV.B of this preamble, “Confidentiality,” regarding how to submit PII
if you do not want it published online. ATF may not consider, or respond to, comments that
do not meet these requirements or comments containing excessive profanity. ATF will retain
comments containing excessive profanity as part of this rulemaking’s administrative record,
but will not publish such documents on https://www.regulations.gov. ATF will treat all
comments as originals and will not acknowledge receipt of comments. In addition, if ATF
cannot read your comment due to handwriting or technical difficulties and cannot contact
you for clarification, ATF may not be able to consider your comment.
ATF will carefully consider all comments, as appropriate, received on or before the
closing date.B. Confidentiality
ATF will make all comments meeting the requirements of this section, whether
submitted electronically or on paper, and except as provided below, available for public
viewing on the internet through the federal e-rulemaking portal, and subject to the Freedom
of Information Act (5 U.S.C. 552). Commenters who submit by mail and who do not want
their name or other PII posted on the internet should submit their comments with a separate
cover sheet containing their PII. The separate cover sheet should be marked with
“CUI//PRVCY” at the top to identify it as protected PII under the Privacy Act. Both the
cover sheet and comment must reference this RIN 1140-AB01. For comments submitted by
mail, information contained on the cover sheet will not appear when posted on the internet
but any PII that appears within the body of a comment will not be redacted by ATF and may
appear on the internet. Similarly, commenters who submit through the federal e-rulemaking
portal and who do not want any of their PII posted on the internet should omit such PII from
the body of their comment and any uploaded attachments. However, PII entered into the
online fields designated for name, email, and other contact information will not be posted or
viewable online.
A commenter may submit to ATF information identified as proprietary or
confidential business information by mail. To request that ATF handle this information as
controlled unclassified information (“CUI”), the commenter must place any portion of a
comment that is proprietary or confidential business information under law or regulation on
pages separate from the balance of the comment, with each page prominently marked
“CUI//PROPIN” at the top of the page.
ATF will not make proprietary or confidential business information submitted in
compliance with these instructions available when disclosing the comments that it receives,
but will disclose that the commenter provided proprietary or confidential business
information that ATF is holding in a separate file to which the public does not have access. IfATF receives a request to examine or copy this information, it will treat it as any other
request under the Freedom of Information Act (5 U.S.C. 552). In addition, ATF will disclose
such proprietary or confidential business information to the extent required by other legal
process.
C. Submitting comments
Submit comments using either of the two methods described below (but do not
submit the same comment multiple times or by more than one method). Hand-delivered
comments will not be accepted.
• Federal e-rulemaking portal: ATF recommends that you submit your comments to
ATF via the federal e-rulemaking portal at https://www.regulations.gov and follow the
instructions. Comments will be posted within a few days of being submitted. However, if
large volumes of comments are being processed simultaneously, your comment may not be
viewable for up to several weeks. Please keep the comment tracking number that is provided
after you have successfully uploaded your comment.
• Mail: Send written comments to the address listed in the ADDRESSES section of this
document. Written comments must appear in minimum 12-point font size, include the
commenter’s first and last name and full mailing address, and may be of any length. See also
section IV.B of this preamble, “Confidentiality.”
D. Request for hearing
Any interested person who desires an opportunity to comment orally at a public
hearing should submit his or her request, in writing, to the Director within the 90-day
comment period. The Director, however, reserves the right to determine, in light of all
circumstances, whether a public hearing is necessary.
Disclosure
Copies of this proposed rule and the comments received in response to it are available
through the federal e-rulemaking portal, at https://www.regulations.gov (search for RIN1140-AB01).
Severability
Consistent with the Administrative Procedure Act, the issues raised in this proposed
rule may be finalized, or not, independently of each other, after consideration of comments
received. ATF has determined that this proposed rule implements and is fully consistent with
governing law. However, in the event this proposed rule is finalized, if any provision of that
final rule, an amendment or revision made by that rule, or the application of such provision
or amendment or revision to any person or circumstance, is held to be invalid or
unenforceable by its terms, the remainder of that final rule, the amendments or revisions
made by that rule, and application of the provisions of the rule to any person or circumstance
shall not be affected and shall be construed so as to give them the maximum effect permitted
by law.
List of subjects in 27 CFR part 478
Administrative practice and procedure, Arms and munitions, Exports, Freight,
Imports, Intergovernmental relations, Law enforcement officers, Military personnel,
Penalties, Reporting and recordkeeping requirements, Research, Seizures and forfeitures,
Transportation.
For the reasons discussed in the preamble, ATF proposes to amend 27 CFR part 478
as follows:
PART 478- COMMERCE IN FIREARMS AND AMMUNITION
1. The authority citation for 27 CFR part 478 continues to read as follows:
Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921–931; 44 U.S.C. 3504(h)
2. Amend § 478.11 by:
a. Revising paragraph (3) of the definition of “engaged in the business” (“dealer in
firearms other than a gunsmith or a pawnbroker”); the definition of “personal collection (or
personal collection of firearms, or personal firearms collection)”, including its title; and thedefinition of “predominantly earn a profit”; and
b. Removing the definition of “former licensee inventory”.
The revisions read as follows:
§ 478.11 Meaning of Terms
Engaged in the business– * * *
* * * * *
(3) Dealer in firearms other than a gunsmith or a pawnbroker. A person who devotes
time, attention, and labor to dealing in firearms as a regular course of trade or business to
predominantly earn a profit through the repetitive purchase and resale of firearms. The term
does not include a person who makes occasional sales, exchanges, or purchases of firearms to
enhance a personal collection or for a hobby, or who sells all or part of the person’s personal
collection of firearms. In addition, the term does not include an auctioneer who provides only
auction services on commission to assist in liquidating firearms at an estate-type auction, as
long as the auctioneer does not purchase the firearms or take possession of the firearms for
sale or consignment.
* * * * *
Licensee personal collection (or personal collection of licensee). In the case of a
firearm imported, manufactured, or otherwise acquired by a licensed manufacturer, importer,
or dealer, the personal collection includes only firearms that were:
(a) Acquired or transferred without the intent to willfully evade the restrictions placed
upon licensees by 18 U.S.C. chapter 44;
(b) Recorded by the licensee as an acquisition in the licensee’s acquisition and
disposition record in accordance with §§ 478.122(a), 478.123(a), or 478.125(e) (unless
acquired prior to licensure and not intended for sale);
(c) Recorded as a disposition from the licensee’s business inventory to the licensee’s
personal collection or otherwise as a personal firearm in accordance with §§ 478.122(a),478.123(a), or 478.125(e) (unless acquired prior to licensure and not intended for sale);
(d) Maintained in such personal collection or otherwise as a personal firearm
(whether on or off the business premises) for at least one year from the date the firearm was
so transferred, in accordance with 18 U.S.C. 923(c) and 27 CFR 478.125a; and
(e) Stored separately from, and not commingled with, the business inventory. When
stored or displayed on the business premises, the personal collection and other personal
firearms must be appropriately identified as “not for sale” (e.g., by attaching a tag).
* * *
Predominantly earn a profit. The intent underlying the sale or disposition of firearms
is predominantly one of obtaining pecuniary gain, as opposed to other intents, such as
improving or liquidating a personal firearms collection. However, proof of profit, including
the intent to profit, is not required in cases in which the person engaged in the regular and
repetitive purchase and disposition of firearms for criminal purposes or terrorism.
* * * * *
§ 478.13 [Removed and Reserved]
3. Remove and reserve § 478.13.
§ 478.57 [Amend]
4. Amend § 478.57 by removing from paragraphs (b)(2) and (c) the second sentence.
The revisions read as follows:
§ 478.57 Discontinuance of business.
* * * * *
(b) * * * * *
(2) Transfer the former licensee inventory to a responsible person of the former
licensee to whom the receipt, possession, sale, or other disposition is not prohibited by law.
(c) Transfers of former licensee inventory to a licensee or responsible person in
accordance with paragraph (b)(1) or (2) of this section shall be appropriately recorded asdispositions, in accordance with §§ 478.122(b), 478.123(b), or 478.125(e), prior to delivering
the records after discontinuing business consistent with § 478.127.
* * * * *
§ 478.78 [Amend]
5. Amend § 478.78 by removing from paragraphs (b)(2) and (c) the second sentence.
The revisions read as follows:
§ 478.78 Operations by licensee after notice.
* * * * *
(b) * * * * *
(2) Transfer the former licensee inventory to a responsible person of the former
licensee to whom the receipt, possession, sale, or other disposition is not prohibited by law.
(c) Transfers of former licensee inventory to a licensee or responsible person in
accordance with paragraph (b)(1) or (2) of this section shall be appropriately recorded as
dispositions, in accordance with §§ 478.122(b), 478.123(b), or 478.125(e), prior to delivering
the records after discontinuing business consistent with § 478.127.
* * * * *
Robert Cekada,
Director.