ATF Finalizes Rule Clarifying "Engaged in the Business" Definition for Firearms Dealers

On April 10th, 2024, the ATF finalized a new rule that clarifies the definition of someone being "engaged in the business" as a firearms dealer. This long-awaited rule stems from the Bipartisan Safer Communities Act (BSCA) passed in June 2022. Here at Bravo Store Systems, we understand navigating ATF regulations can be complex. Let’s break down the key points of this new rule and how it might impact your FFL business. Click here to read the full ruling by the ATF.

What You Need to Know:

  • Clearer Definition of Firearms Dealer: The ATF now has a more precise definition of who qualifies as a firearms dealer. This helps ensure FFL holders are operating within compliance.
  • Key Terms Defined: The rule clarifies terms specifically relevant to FFL holders, such as "purchase," "sale," and "personal collection."
  • Presumed Business Activities: The ATF outlines specific actions that are presumed to be "engaging in the business" of dealing firearms. This provides a clearer picture of what constitutes dealer-level activity.
  • Exceptions for Non-Dealers: The rule clarifies situations where someone wouldn't be considered a dealer, such as auctioneers or those occasionally selling firearms from a personal collection.

Key Takeaways for FFL Holders:

  • Profit Motive Not Essential: Under the new rule, you don't necessarily need to turn a profit to be considered "engaged in the business" of dealing firearms.
  • Inventory Liquidation: The ATF clarifies the process former licensees should follow when liquidating business inventory after license termination.
  • Recordkeeping for Transfers: Licensed dealers must still follow established verification and recordkeeping procedures outlined in 27 CFR 478.94 and Subpart H when transferring firearms to other licensees, even for personal collections.

At Bravo, we're committed to providing FFL holders with the latest industry updates and resources to ensure compliance. If you’re looking for a software company to help you streamline compliance we’d love to talk!