It’s that time (yet again) when we need to dig into a newly proposed ATF Rule. This time their target is expanding the definition of “engaged in the business” of gun dealing. So might you be a gun dealer under this potential rule? Possibly.
Laws and Regulations @ TFB:
ATF Proposed Rule 2023-0002 is entitled “Definition of Engaged in the Business as a Dealer in Firearms.” It was spurred by the Bipartisan Safer Communities Act, which took effect on June 25, 2022. That law broadened the definition of what it means to be engaged in gun dealing with the principal purpose of earning a profit, among other things.
So how exactly is ATF proposing to separate mere people selling their guns from people trying to operate a gun-selling business? At least in part, it says:
Rather than establishing a minimum threshold number of firearms purchased or sold, this rule proposes to clarify that, absent reliable evidence to the contrary, a person will be presumed to be engaged in the business of dealing in firearms when the person:
(1) sells or offers for sale firearms, and also represents to potential buyers or otherwise demonstrates a willingness and ability to purchase and sell additional firearms;
(2) spends more money or its equivalent on purchases of firearms for the purpose of resale than the person’s reported taxable gross income during the applicable period of time;
(3) repetitively purchases for the purpose of resale, or sells or offers for sale firearms—
(A) through straw or sham businesses, or individual straw purchasers or sellers
(4) repetitively sells or offers for sale firearms—
(A) within 30 days after they were purchased;
(B) that are new, or like new in their original packaging; or
(C) that are of the same or similar kind ( i.e., make/manufacturer, model, caliber/gauge, and action) and type ( i.e., the classification of a firearm as a rifle, shotgun, revolver, pistol, frame, receiver, machinegun, silencer, destructive device, or other firearm);
It is worth noting that this presumption is only established in civil and administrative proceedings. This is not a presumption that necessarily applies in a criminal case. ATF does note that it “may be useful to a criminal case” though, so don’t rule these out entirely from the criminal context.
The proposed rule also goes into what it means to sell firearms “predominantly to earn a profit.” The ATF proposed rule presumes that guns are being sold to earn a profit if the seller:
(1) advertises, markets, or otherwise promotes a firearms business ( e.g., advertises or posts firearms for sale, including on any website, establishes a website for selling or offering for sale their firearms, makes available business cards, or tags firearms with sales prices), regardless of whether the person incurs expenses or only promotes the business informally; (2) purchases, rents, or otherwise secures or sets aside permanent or temporary physical space to display or store firearms they offer for sale, including part or all of a business premises, table or space at a gun show, or display case; (3) makes or maintains records, in any form, to document, track, or calculate profits and losses from firearms purchases and sales; (4) purchases or otherwise secures merchant services as a business ( e.g., credit card transaction services, digital wallet for business) through which the person makes or offers to make payments for firearms transactions; (5) formally or informally purchases, hires, or otherwise secures business security services ( e.g., a central station-monitored security system registered to a business, or guards for security to protect business assets or transactions that include firearms); (6) formally or informally establishes a business entity, trade name, or online business account, including an account using a business name on a social media or other website, through which the person makes or offers to make firearms transactions; (7) secures or applies for a State or local business license to purchase for resale or to sell merchandise that includes firearms; or (8) purchases a business insurance policy, including any riders that cover firearms inventory.
That is a very broad list. Some of those are more clearly tied to business operations than others. But some do raise eyebrows, such as maintaining a document that tracks profits and losses. Many collectors keep a disposition list for insurance purposes and it is not a stretch to think such a list could be characterized as a profit and loss statement. Another notable portion is number two in the list, which would sweep in anyone who rents a table at a gun show.
Comments on the proposed rule are due by December 7, 2023. As of writing, there were already over 65,000 comments and that number was rising fast. Our own Luke C. wrote an article a while back about how to write an effective comment on a proposed ATF regulation. Be sure to read it before submitting your comment, should you choose to write one. Please also read the proposed rule thoroughly before commenting. It is thousands of words long, and this article is only a brief summary. You can read the rule and/or leave a comment here.
Read the full article here