Once again, instead of creating a law through the legislative process, the ATF is \u2018redefining\u2019 to circumvent the process.<\/figcaption><\/figure>\n<\/div>\nATF Rule 2022R-17<\/h2>\nSummary<\/h3>\n The Department of Justice (\u201cDepartment\u201d) proposes amending Bureau of Alcohol, Tobacco, Firearms, and Explosives (\u201cATF\u201d) regulations to implement the provisions of the Bipartisan Safer Communities Act (\u201cBSCA\u201d), effective June 25, 2022, that broaden the definition of when a person is considered \u201cengaged in the business\u201d as a dealer in firearms other than a gunsmith or pawnbroker. This proposed rule incorporates the BSCA\u2019s definition of \u201cpredominantly earn a profit,\u201d creates a stand-alone definition of \u201cterrorism,\u201d and amends the definitions of \u201cprincipal objective of livelihood and profit\u201d and \u201cengaged in the business\u201d to ensure each conforms with the BSCA\u2019s statutory changes and can be relied upon by the public.<\/p>\n
The proposed rule also clarifies what it means for a person to be \u201cengaged in the business\u201d of dealing in firearms, and to have the intent to \u201cpredominantly earn a profit\u201d from the sale or disposition of firearms. In addition, it clarifies the term \u201cdealer,\u201d including how that term applies to auctioneers, and defines the term \u201cresponsible person.\u201d These proposed changes would assist persons in understanding when they are required to have a license to deal in firearms.<\/p>\n
Consistent with the Gun Control Act (\u201cGCA\u201d) and existing regulations, the proposed rule also defines the term \u201cpersonal collection\u201d to clarify when persons are not \u201cengaged in the business\u201d because they make only occasional sales to enhance a personal collection, or for a hobby, or if the firearms they sell are all or part of a personal collection.<\/p>\n
This proposed rule further addresses the lawful ways in which former licensees, and responsible persons acting on behalf of such licensees, may liquidate business inventory upon revocation or other termination of their license. Finally, the proposed rule clarifies that a licensee transferring a firearm to another licensee must do so by following the verification and recordkeeping procedures instead of using a Firearms Transaction Record, ATF Form 4473.<\/p>\n
The final version of ATF Rule 2022R-17 has been submitted to the Federal Register and goes into effect 30 days after the date of publication. ATF Rule 2022R-17 broadens the definition of who is \u201cengaged in the business\u201d as a dealer in firearms and finalizes many amendments to regulatory definitions.<\/p>\n
A person will be considered to be \u201cengaged in the business\u201d as a dealer in firearms, when that person:<\/strong><\/p>\n\n
The Rule finalizes the amendment to the regulatory definition of \u201cDealer\u201d to clarify that firearms dealing may occur wherever, or through whatever medium, qualifying domestic or international activities are conducted.<\/p>\n
The Rule also \u201cfinalizes an amendment to the regulatory definition of \u201cengaged in the business\u201d to define the terms \u201cpurchase\u201d and \u201csale\u201d as they apply to dealers to include any method of payment or medium of exchange for a firearm, including services or illicit forms of payment (e.g., controlled substances).\u00a0 \u201cResale\u201d is defined to mean \u201cselling a firearm, including a stolen firearm, after it was previously sold by the original manufacturer or any other person.\u201d\u201d<\/p>\n
Providing services is considered a medium of exchange, so the ATF has codified its \u201chistorical exclusion for auctioneers who provide only auction services on commission to assist in liquidating firearms at an \u2018estate-type\u2019 auction.\u201d<\/p>\n
The ruling states that a \u201clicensee transferring a firearm to another licensee, must do so by following the verification and recordkeeping procedures in the regulations, rather than by using a Firearms Transaction Record, ATF Form 4473.\u201d<\/p>\n
\u201cThe final rule recognizes that individuals who purchase firearms for the enhancement of a personal collection or a legitimate hobby are permitted by the GCA to occasionally buy and sell firearms for those purposes, or occasionally resell to a licensee or to a family member for lawful purposes, without the need to obtain a license.\u201d<\/p>\n
Without an FFL, an individual must ensure they are not \u201cengaged in the business\u201d and the transaction is not \u201cto predominantly earn a profit\u201d, which now focuses only on whether the intent of the underlying sale or disposition of the firearms is predominantly of the obtaining pecuniary gain. Individuals may continue to engage in private intrastate sales, without a license, provided the individuals are not \u201cengaged in the business\u201d and the transaction is otherwise compliance with the law.<\/p>\n
Q&A From the ATF<\/h2>\n Q. Why does the Final rule change the definition of a \u201cdealer\u201d?<\/em><\/strong><\/p>\nA.<\/strong> The Gun Control Act was passed in 1968, and the Firearms Owners\u2019 Protection Act modified it in 1986. Since then, there have been significant advancements in manufacturing (e.g., 3D printing) and distribution technology (e.g., Internet), and changes in the marketplace and products (e.g., large-scale gun shows). These have increased the ways in which individuals shop for firearms and have therefore created a need for more clarity in the regulatory definition of \u201cdealer\u201d in the diverse modern marketplace, especially with the BSCA amendments to what constitutes being \u201cengaged in the business\u201d as a dealer. The final rule amended the definition of \u201cdealer\u201d to clarify that, under the changes to \u201cengaged in the business\u201d made by the BSCA, a person still meets the statutory definition of a dealer in firearms in the modern marketplace, regardless of where they buy and sell firearms, regardless of which medium they use to do so, and regardless of which medium of payment or exchange they use.<\/p>\nQ. Is the term \u201coccasional\u201d defined in the BSCA or the final rule when addressing sales, exchanges, or purchases of firearms?<\/em><\/strong><\/p>\nA.<\/strong> No. The term \u201coccasional\u201d is not defined in the regulatory text; however, the plain and ordinary meaning of that term is \u201cinfrequent or irregular occurrence.\u201d However, regular or routine sales, exchanges, or purchases of firearms (even part-time) for the enhancement of a personal collection or for a hobby would not fall within the meaning of that term.<\/p>\nQ. If I only dedicate a few hours to selling firearms to predominantly earn a profit, am I considered a \u201cdealer\u201d?<\/em><\/strong><\/p>\nA.<\/strong> Yes. The term includes any person who engages in such business or occupation on a parttime basis.<\/p>\nQ. Does the final rule require every private sale of a firearm be processed through a licensed dealer?<\/em><\/strong><\/p>\nA.<\/strong> No. Individuals may continue to make intrastate private sales without a license provided they do not rise to the level of being \u201cengaged in the business,\u201d and the transactions are otherwise compliant with law.<\/p>\nQ. If a person sells their personal firearm and makes a profit, does that equate to being engaged in the business as a dealer requiring a license?<\/em><\/strong><\/p>\nA.<\/strong> No. A person actually \u201cselling at a profit does not equate to engaging in the business\u201d because a showing of actual profit, whether expenses or inflation are considered, is not required to be engaged in the business. Rather, it is the predominant intent of obtaining pecuniary gain from sale or disposition of firearms that matters. See 18 U.S.C. \u00a7 921(a)(22). Moreover, because the person\u2019s predominant intent to profit is the relevant fact, it does not matter how or whether actual profit is calculated.<\/p>\nConclusion<\/h2>\n The main takeaway for most who are not \u2018engaged in the business\u2019 is to change the way we do things. No longer would a private party transfer offer a bill of sale \u2014 whether you are going through a FFL to do the 4473 transfer. Instead, use a bill of transfer sans a purchase amount. Don\u2019t mention or admit to buying a gun as an investment. Don\u2019t buy a gun at a show with the intention of \u2018flipping\u2019 it?<\/p>\n
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The new Rule could make collectors into criminals overnight.<\/figcaption><\/figure>\n<\/div>\nInstead of creating a new law that must go through the legislative process, the ATF has once again taken the strategy of \u2018redefining\u2019 an existing law to clarify (change) it. Remember, the ATF took one page from the Safer Communities Act and added over 100 pages of its own commentary to \u2018explain<\/em>\u2019 it with ATF Rule 2022R-17\u2026 And that\u2019s never good for you, me, or the Second Amendment\u2026 In my opinion, of course.<\/p>\n
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