Final Rule: Definition of “Engaged in the Business” as a Dealer in Firearms

A firearm with a pen laying on an official application to own or manufacture a firearm.

On April 10, 2024, the Attorney General signed ATF’s final rule, Definition of “Engaged in the Business” as a Dealer in Firearms, amending ATF’s regulations in title 27, Code of Federal Regulations (“CFR”), part 478. The final rule implements the provisions of the Bipartisan Safer Communities Act (“BSCA,” effective June 25, 2022), which broadened the definition of when a person is considered “engaged in the business” as a dealer in firearms (other than a gunsmith or pawnbroker). The Final Rule clarifies that definition. It will be published in the Federal Register and will be effective 30-days from publication.

This final rule incorporates BSCA’s definitions of “predominantly earn a profit” and “terrorism,” and amends the regulatory definitions of “engaged in the business as a dealer other than a gunsmith or pawnbroker” and “principal objective of livelihood and profit” to ensure each conforms with the BSCA’s statutory changes and can be relied upon by the public. 

The final rule clarifies when a person is “engaged in the business” as a dealer in firearms at wholesale or retail by:

  1. clarifying the definition of “dealer,” and defining the terms “purchase,” “sale,” and “something of value” as they apply to dealers;
  2. adding definitions for the term “personal collection (or personal collection of firearms, or personal firearms collection),” and for “responsible person”;
  3. setting forth conduct that is presumed to constitute “engaging in the business” of dealing in firearms, and presumed to demonstrate the intent to “predominantly earn a profit” from the sale or disposition of firearms, absent reliable evidence to the contrary, in civil and administrative proceedings;
  4. clarifying that the intent to “predominantly earn a profit” does not require the person to have received pecuniary gain, and that intent does not have to be shown when a person purchases or sells a firearm for criminal or terrorism purposes;
  5. clarifying the circumstances when a person would not be presumed to engaged in the business of dealing in firearms, including as an auctioneer, or when purchasing firearms for, and selling firearms from, a personal collection;
  6. addressing the procedures former licensees, and responsible persons acting on behalf of such licensees, must follow when they liquidate business inventory upon revocation or other termination of their license; and
  7. clarifying that licensees must follow the verification and recordkeeping procedures in 27 CFR 478.94 and Subpart H, rather than using an ATF Form 4473 when firearms are transferred to other licensees, including transfers by a licensed sole proprietor to that person’s personal collection.

Read Final Rule

Note on Pending Litigation

In Texas et al. v. Bureau of Alcohol, Tobacco, Firearms and Explosives et al., 2:24-cv-00089-Z (N.D. Tex.), on May 19, 2024, the U.S. District Court for the Northern District of Texas issued a Preliminary Injunction, which restrains ATF, the U.S. Department of Justice, Attorney General Merrick Garland, and ATF Director Steven M. Dettelbach “from enforcing the regulations — ‘Definition of ‘Engaged in the Business’ as a Dealer in Firearms’ — published at 89 Fed. Reg. 28968 (April 19, 2024) (to be codified at 27 C.F.R. pt. 478) against Plaintiffs Texas, Louisiana, Mississippi, Utah, Jeffery Tormey, the Gun Owners of America, Inc., the Gun Owners Foundation, the Tennessee Firearms Association, and the Virginia Citizens Defense League, pending the resolution of this lawsuit. DOJ and ATF are complying with that order, which is available online. View the document

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Last Reviewed June 13, 2024