Required to gt an FFL based on number of guns sold?

[TomJ]

I saw an older thread on this but thought I'd ask. I've done quite a bit of gun trading lately, mostly selling through Armslist and buying new guns. I have not profitted at all, and each transaction has cost me some money. One of our LGS' mentioned that the ATF released information stating that if you buy 5 guns and sell them in less than a year you're required to get an FFL, with fines and jail time possible. I did read the statute and my understanding is that the test is whether you're in the business of selling guns and buying and selling for your personal collection is fine. This sounds like some of the nonsense that you hear in LGS' but I thought I'd ask. I did check with another LGS and they're telling me this is not true.

 

[George Dickel]

Your understanding of the law is the same as mine. You must be in the business of selling guns.

 

[WestKentucky]

Buy/sell/Trade til you get what you want. Don’t try to cash out and turn a profit, but don’t miss out on trading up either.

 

[PapaG]

Problem is that BATFE can decide what they want...ain't no set numbers but too much activity can get you "on the radar".

 

[newfalguy101]

Absolutely nothing wrong with making a profit.

Buying with the sole intent of selling, repeatedly, is just one of the hallmarks of running a business.

There is no set number of transactions tjat trigger the need for an FFL.

I am not an expert if any kind, but, up till may of 2019 I had a small firearms business.

 

[TomJ]

Buying with the sole intent of selling, repeatedly, is just one of the hallmarks of running a business.

I’ve never done that. I always buy for my personal use, never for the sole intent of selling.

 

[newfalguy101]

I’ve never done that. I always buy for my personal use, never for the sole intent of selling.

Then you have nothing to be concerned about.

 

[Carl N. Brown]

Here is something a lot of folks don't get.
Gun shops must have a Federal Firearms License and abide by federal gun laws.
But that's not always the end.
Gun shops must also follow and abide by state gun laws.
(And of course, gun shop personnel may complete misconstrue what they have been told.)
My son was advised that a pattern of buying that matches a profile of buying for resale purposes can put your future purchases under increased scrutiny at the state and federal level. All he did was buy two matching guns (same make, model, caliber) one for himself and one as a gift to me as a late birthday present. Previously I had bought two guns as gifts to my wife with nary a blip: a revolver and a shotgun.

 

[Theohazard]

There’s a great thread about this subject in the sticky at the top of the Legal forum titled “Common and Important Legal Issues — Your Answer Might be Here.”

https://www.thehighroad.org/index.php?threads/what-is-dealing-in-firearms-without-a-license.699556/

In short, there is no number threshold, that’s a gun shop myth. It’s also not necessarily illegal to make a profit by buying or selling guns. But it’s also not automatically legal if you don’t make a profit (plenty of businesses aren’t profitable, but they’re still businesses).

Here’s the appropriate excerpt from federal law:

“(21) The term "engaged in the business" means—.....
(C) as applied to a dealer in firearms, as defined in section 921(a)(11)(A), a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms;”

For a more detailed discussion of what that actually means, see Frank’s posts in the thread I linked above.

 

[natman]

That's at the Federal level. California has a 5 transaction per year limit.

 

[Texas10mm]

A couple of decades ago there was a big game hunter that sold two African class rifles in two years. The ATF arrested and charged him for dealing without a license.

The law is purposely vague.

 

[Frankd90]

One would imagine that the burden of proof is on the BATFE to prove that you bought with the firearm with the intent to sell.

 

[Theohazard]

One would imagine that the burden of proof is on the BATFE to prove that you bought with the firearm with the intent to sell.

Buying a firearm with the intent to sell isn’t necessarily illegal. See the sticky thread I linked above.

 

[herrwalther]

One of our LGS' mentioned that the ATF released information stating that if you buy 5 guns and sell them in less than a year you're required to get an FFL, with fines and jail time possible.

That LGS is incorrect. There is no magic number of firearms bought/sold in a time frame (ie 15 in a year) where you are required to be an FFL. Instead, it is the ambiguous definition of being "in the firearm business." If you buy a firearm with the intent of selling it at a profit, 20 times in a month, things can get a little grey and hairy for you. As such, there is no minimum amount of transactions required to maintain a FFL.

 

[TomJ]

So based on what I've actually done I'm fine but the vagueness of the law and it being subject to interpretation is potentially a problem, so there's no clear answer.

 

[Spats McGee]

There's no magic "gotta have an FFL" number. It's about being "engaged in the business." Frank Ettin has posted about this on several occasions in the past. If you can't dig up one of his posts, let me know and I'll see if I can.

 

[TomJ]

There's no magic "gotta have an FFL" number. It's about being "engaged in the business." Frank Ettin has posted about this on several occasions in the past. If you can't dig up one of his posts, let me know and I'll see if I can.

Thanks. I did see some of his posts from the link Theohazard provided and it was helpful.

 

[BSA1]

I know of a couple of cases where a person that got caught by the BATF turned informant and tried to get someone to commit a illegal act so they could get off of the hook with the BATF. One was personal friend who smelled a rat and the other was a gun club member that tried to burn a couple of members.

Activity like setting up a table regularly at Gun Shows may get you on the BATF radar.

 

[Elkins45]

I occasionally wonder how someone lands on the ATF radar for dealing without a license. By my observation it isn’t easy because there are 5-6 guys who have tables full of guns on display at every one of the small shows I attend here. A couple of them even have folding rifle racks so they can get more guns on their table. These guys are clearly in the gun business and at least three of them have been doing it for more than 10 years. I have to imagine if they aren’t in prison yet then the average Joe would really have to goof up or be incredibly unlucky for ATF to choose him to make an example of.

 

[redneck2]

have to imagine if they aren’t in prison yet then the average Joe would really have to goof up or be incredibly unlucky for ATF to choose him to make an example of.

I really don’t know, but I suspect it’s kinda like an IRS audit. When they do pick their victims, they make it hurt bad enough that it scares everyone else into line.

FWIW....there was a local guy that was a FFL but sold a gun out of his private collection off the books. It was later used to kill a Mishawaka, Indiana cop. Buyer was a felon. He got twenty years in prison

 

[dogtown tom]

A couple of decades ago there was a big game hunter that sold two African class rifles in two years. The ATF arrested and charged him for dealing without a license.

The law is purposely vague.

Oh come on.
If that's true you really ought to cite the case.

While ATF HAS prosecuted instances of selling one firearm as engaged in the business, it was an instance of the guy buying a gun at a gun show and immediately placing it on his table for resale....ie flipping.

Again, its not the number of firearms its the pattern of behavior.

 

[Elkins45]

I really don’t know, but I suspect it’s kinda like an IRS audit. When they do pick their victims, they make it hurt bad enough that it scares everyone else into line.

FWIW....there was a local guy that was a FFL but sold a gun out of his private collection off the books. It was later used to kill a Mishawaka, Indiana cop. Buyer was a felon. He got twenty years in prison

Jury trial? What was the crime he was convicted for?

 

[redneck2]

I suppose because he was an FFL they felt he was trying to skirt the law by claiming it was private. Court system didn’t see it that way

I suppose you can try to interpret that law any way you want. I was told long ago to not ever do anything you’re not willing to testify to on the witness stand

for me, the thought of making a few bucks versus trying to justify it in court doesn’t t meet my risk/reward ratio. Even if you were acquitted, the legal costs would be in the tens to hundreds of thousands of dollars.

Squeeze isn’t worth the juice IMO.

 

[Frank Ettin]

....I did read the statute and my understanding is that the test is whether you're in the business of selling guns and buying and selling for your personal collection is fine...

But it all comes down to a question of where "buying and selling for your personal collection" ends and "in the business of selling guns" begins. And the bottom line is that there is no "bright line" between the two. If you're unlucky it will come down to a judgment call for the jury at your trial.

Let's look at what some federal courts have said:

• The Third Circuit, in upholding a conviction of dealing in firearms without a license noted (U.S. v. Tyson, 653 F.3d 192 (3rd Cir., 2011), at 200-201, emphasis added):
  

  ...By the statute's terms, then, a defendant engages in the business of dealing in firearms when his principal motivation is economic (i.e., “obtaining livelihood” and “profit”) and he pursues this objective through the repetitive purchase and resale of firearms. Palmieri, 21 F.3d at 1268 (stating that “economic interests” are the “principal purpose,” and “repetitiveness” is “the modus operandi ”). Although the quantity and frequency of sales are obviously a central concern, so also are (1) the location of the sales, (2) the conditions under which the sales occurred, (3) the defendant's behavior before, during, and after the sales, (4) the price charged for the weapons and the characteristics of the firearms sold, and (5) the intent of the seller at the time of the sales. Id. (explaining that “the finder of fact must examine the intent of the actor and all circumstances surrounding the acts alleged to constitute engaging in business”). As is often the case in such analyses, the importance of any one of these considerations is subject to the idiosyncratic nature of the fact pattern presented...

  
  
• And the Fifth Circuit noted (United States v. Brenner (5th. Cir., 2012, No. 11-50432, slip opinion), at 5-6, emphasis added):
  

  ...the jury must examine all circumstances surrounding the transaction, without the aid of a "bright-line rule". United States v. Palmieri, 21 F.3d 1265, 1269 (3d Cir.), vacated on other grounds, 513 U.S. 957 (1994). Relevant circumstances include: "the quantity and frequency of sales"; the "location of the sales"; "conditions under which the sales occurred"; "defendant's behavior before, during, and after the sales"; "the price charged"; "the characteristics of the firearms sold"; and, "the intent of the seller at the time of the sales". Tyson, 653 F.3d at 201.

  
  
• The Sixth Circuit noted (United States v. Gray (6th Cir., 2012, No. 11-1305, slip opinion), at 8):
  

  ...However, "a defendant need not deal in firearms as his primary business for conviction." United States v. Manthey, 92 F. App'x 291, 297 (6th Cir. 2004)....

  
  
• And in upholding Gray's conviction the Sixth Circuit also noted (Gray, at 8-9):
  

  ...We have previously held that evidence was sufficient to support a conviction under § 922(a)(1)(A) where it showed (1) that the defendant frequented flea markets and gun shows where he displayed and sold guns; (2) that the defendant offered to sell guns to confidential informants on multiple occasions and actually sold them three different guns on two different occasions; (3) and...that the defendant bought and sold guns for profit. See United States v. Orum, 106 F. App'x 972, 974 (6th Cir. 2004)...

  
  
• In affirming a conviction of dealing in firearms without a license, the Ninth Circuit stated (U.S. v. Breier, 813 F.2d 212 (C.A.9 (Cal.), 1987), at 213-214, emphasis added):
  

  ...Courts have fashioned their own definitions of the term. For example, we have previously stated "that where transactions of sale, purchase or exchange of firearms are regularly entered into in expectation of profit, the conduct amounts to engaging in business." United States v. Van Buren, 593 F.2d 125, 126 (9th Cir.1979) (per curiam). In United States v. Wilmoth, 636 F.2d 123 (5th Cir. Unit A 1981), the Fifth Circuit stated that to prove the status of the accused as one engaged in the business of dealing in firearms, "the Government must show a greater degree of activity than the occasional sale of a hobbyist." Id. at 125. "It is enough to prove that the accused has guns on hand or is ready and able to procure them for the purpose of selling them from time to time to such persons as might be accepted as customers." Id.; accord United States v. Carter, 801 F.2d 78, 82 (2d Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 657, 93 L.Ed.2d 712 (1986); United States v. Burgos, 720 F.2d 1520, 1527 n. 8 (11th Cir.1983)....

 

[TomJ]

But it all comes down to a question of where "buying and selling for your personal collection" ends and "in the business of selling guns" begins. And the bottom line is that there is no "bright line" between the two. If you're unlucky it will come down to a judgment call for the jury at your trial.

Let's look at what some federal courts have said:

• The Third Circuit, in upholding a conviction of dealing in firearms without a license noted (U.S. v. Tyson, 653 F.3d 192 (3rd Cir., 2011), at 200-201, emphasis added):
  
  ​
  
  
• And the Fifth Circuit noted (United States v. Brenner (5th. Cir., 2012, No. 11-50432, slip opinion), at 5-6, emphasis added):
  
  ​
  
  
• The Sixth Circuit noted (United States v. Gray (6th Cir., 2012, No. 11-1305, slip opinion), at 8):
  
  ​
  
  
• And in upholding Gray's conviction the Sixth Circuit also noted (Gray, at 8-9):
  
  ​
  
  
• In affirming a conviction of dealing in firearms without a license, the Ninth Circuit stated (U.S. v. Breier, 813 F.2d 212 (C.A.9 (Cal.), 1987), at 213-214, emphasis added):
  
  ​

Thanks for the clarification. As I mentioned I've sold and bought a few guns lately and was thinking about selling more to fund the purchase of a EDC X9S. The EDC is more of a want than a need and I decided to hold on to the guns I'd have to sell to pay for it. I'll save the money for it instead.