BREAKING: DOJ to Update Definition of ‘Engaged in the Business’ as a Firearms Dealer

Estimated reading time: 4 minutes

Key Takeaways:

• The Justice Department reveals a new rule to clarify the term “engaged in the business” for firearms dealers.
• The move follows the Bipartisan Safer Communities Act’s recent expansions.
• This rule highlights who must get a license and conduct background checks before selling firearms.

Justice Department Takes Action on Firearms Regulation

The Justice Department submitted a proposal today to redefine when a person is considered “engaged in the business” of selling firearms. This clarification determines who needs to acquire a license and conduct background checks.

The aim?

To align with the Bipartisan Safer Communities Act (BSCA) from June 25, 2022, which broadens the firearms dealer definition.

The BSCA covers those who, in regular trade, aim mainly to profit from repeated firearms sales.

President Biden’s Directive

On March 14, President Biden’s Executive Order 14092 tasked the Attorney General with clarifying this definition.

This proposed rule intends to modify the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) regulations, aligning with the BSCA and shedding light on what exactly necessitates a license.

Attorney General Merrick B. Garland emphasized Congress’s intentions.

 “The Bipartisan Safer Communities Act was passed by Congress to reduce gun violence, including by expanding the background checks that keep guns out of the hands of criminals,” he said in a statement.

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“This proposed rule implements Congress’s mandate to expand the definition of who must obtain a license and conduct a background check before selling firearms,” Garland continued.

ATF Director Steven Dettelbach expressed concern about the rise of unregistered firearms sellers.

“An increasing number of individuals engaged in the business of selling firearms for profit have chosen not to register as federal firearms licensees, as required by law,” said Dettelbach.

“Instead, they have sought to make money through the off-book, illicit sale of firearms. These activities undermine the law, endanger public safety, create significant burdens on law enforcement, and are unfair to the many licensed dealers who make considerable efforts to follow the law,” he added.

How The New Rule Seeks To Clarify “Engaged in The Business“

The NPRM specifically proposes to clarify when a person is “engaged in the business” as a dealer in firearms at wholesale or retail by:

• Clarifying the definition of “dealer” and defining the terms “purchase” and “sale” as they apply to dealers;
• Clarifying when a person would not be engaged in the business of dealing in firearms as an auctioneer, or when purchasing firearms for, and selling firearms from, a personal collection;
• 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;
• 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;
• Adding a single definition for the term “personal collection, personal collection of firearms, or personal firearms collection” and adding a definition for the term “responsible person”;
• Addressing how former licensees, and responsible persons acting on behalf of former licensees, may lawfully liquidate business inventory upon revocation or other termination of their license; and
• 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.

Public Participation

Once officially published in the Federal Register, the public can give feedback on the proposal for 90 days. The full notice of the proposed rulemaking by the Department can be viewed here.

To understand the federal rulemaking process, refer to the Federal Rulemaking Process infographic.

Feedback on the Proposal?

• The comment period is open for 90 days post-publication in the Federal Register.
• All comments will be made public, though processing delays might occur.
• Postal comments are accepted. Hand-delivered ones are not.

For the full proposed rule document signed by the Attorney General, click here.

This story is still developing, please stay tuned for updates.

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