Illegal to sell a gun for profit without dealer lic.

D

Dennis6474

New member
This was a local flea market open on weekends. Several booths had a couple of firearms for sale most weeks but not as dealers.They had other stuff for sale in the booth also.

The DA stated that congress had a rule " Congress included if someone chose to deal in firearms, or sell firearms for profit, then they’re required to be licensed."

I had never heard of that "rule".

Can someone enlighten me.

http://www.jcfloridan.com/news/crime_courts/article_e972ee22-0384-5874-969d-4d23daac3dbd.html
 
It's been discussed here before, the gist I got was that it's legal to sell your own stuff for profit but you can't turn it into a business. What turning it into a business means is the gray area. There's no hard number of firearms sold or attempted to be sold in any given time period. The guy who goes once to sell the rifle his grandpa left him in a will probably isn't in the business. The guy who goes every week, replacing what he sold last time with unfired still in the box firearms probably is. Nobody really knows where the line in the middle is.
 
The guns that I saw were used and very used. Nothing new. sometimes the same gun for several weeks.

Is there a rule that says if you sell a gun for a profit that you must be a dealer?

Did congress make the "rule" or ATF?

If you sell a gun to a convicted felon how are you to know? I am sure that the felon would lie if you asked. Just anybody cannot call for a check with the feds so how can you be safe selling a gun?
 
Well new isn't required either... someone who makes a living off of nothing more than buying up every Garand (or whatever) and touring the country's gun shows to resell them is probably in the business as well. The line, whereever it may be is in how much they sell or try to sell how long after they get it and what ever else they may or may not do with it.
 
Dennis6474 said:
...The DA stated that congress had a rule " Congress included if someone chose to deal in firearms, or sell firearms for profit, then they’re required to be licensed."

I had never heard of that "rule".

Can someone enlighten me....
Click to expand...

Under federal law someone needs a federal license to be a "dealer in firearms." Exactly when someone who sometimes buys guns and later sells guns becomes a "dealer" can be a hard question to answer.

  1. Under federal law, one needs an FFL to engage in the business of a dealer in firearms. "Engaged in the business" is defined at 18 USC 921(a)(21)(C), emphasis added:
    (21) The term “engaged in the business” means—

    (A)...

    (B) ...

    (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;...
    Click to expand...

    • The operative concepts are (1) devoting time, attention and labor; (2) doing so regularly as a trade or business; (3) the repetitive purchase and resale of guns; and (4) intending to make money.

    • "Livelihood" simply means:
      1: means of support or subsistence
      Click to expand...

    • Nothing in the statutory definition of "engaged in the business" requires that it be one's only business or means of support. It could be a side business, a secondary business or one of several ways you have of bringing money into the household.

      • What matters is that you're doing it regularly to make money. You don't even necessarily need to make a profit to be "engaged in business."

      • People go into business all the time and wind up not making money. It's not that they're not engaged in business; it's just that they're not very good at it.

    • But an occasional sale is not being "engaged in the business." Where is the the line between an occasional sale and the repetitive purchase and resale?

      • That's not clear from the statutes.

      • So the question becomes whether there's been any useful judicial clarification.

  2. Let's look at what some 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...
      Click to expand...

    • 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.
      Click to expand...

    • 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)....
      Click to expand...

    • 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)...
      Click to expand...

    • 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)....
      Click to expand...

  3. So the bottom line is that there really doesn't appear to be a safe harbor, i. e., a set of specific, clearly defined conditions which, if satisfied, definitely get you off the hook.

  4. So if a federal prosecutor, looking at the totality of the circumstances and all the factors discussed in the various cases, decides that he can first convince a grand jury that there's probable cause to believe you're buying and selling guns as a trade or business, and then convince a trial jury beyond a reasonable doubt that you're buying and selling guns as a trade or business, he very well might prosecute you.
 
Kind of confusing with no clear line is what I get. Thanks Jim, I am going to keep what ever guns I have left after the boating accident.
 
Frank answered far better than I could have hoped to.

If you DO want to sell your firearms, and you are worried it will be enough to garner attention from prosecutors, you CAN require your sales go through a licensee and probably avoid this problem.
 
If you're selling off unwanted items from your collection, you should be OK.

If you are acquiring guns to sell, profit or not, you are a dealer.

No law says private sales may not be processed by an FFL, talk to your local dealers, see if you can make a deal.

For just a few guns, I'd just put them on consignment with an FFL rather than sit at a table for three weekends in a row.
 
kilimanjaro said:
If you are acquiring guns to sell, profit or not, you are a dealer.
Click to expand...
Actually, I don't think this is correct as written. Another minor wrinkle in the federal statute has been pointed out in past threads here.

18 USC 921(a)(21)(C) says that it is unlawful to engage in the "repetitive purchase and resale" of firearms without a license- note my emphasis on the word "and".

It does not prohibit the mere repetitive purchase of firearms for resale at a profit; it simply requires one to get a license prior to reselling the firearms. In other words, it does NOT necessarily require the seller to have a FFL prior to acquisition of the goods.*

(*Take note that purchasing goods- guns or otherwise!- solely for the purpose of eventual future resale may run afoul of state sales tax and use laws if one does not first obtain the requisite licenses or permits; however, this is a different and very complicated topic that is well beyond the scope of this thread, and I don't think any of us intend to discuss it further. :))

Mandatory disclaimer: I am not an attorney, nor do I play one on TV. ;) This is not legal advice. Caveat emptor and YMMV.
 
Last edited:
But then there are the people who are denied a FFL on the grounds that they are not proposing to make sufficient of a business out of it.
Seems the feds want to keep you guessing.
 
kilimanjaro said:
If you are acquiring guns to sell, profit or not, you are a dealer.
Click to expand...

As a blanket statement, that is not true. There is nothing wrong with purchasing a gun at a price that you know can be turned into profit.

Buying it from a dealer, with a PRIOR AGREEMENT to sell it to a third party is part of the very definition of a straw purchase but it is still not engaging in being a dealer without a license.

Frank lays out the relevant laws in his post and there is not a thing there that says you can't buy a gun with the intent of reselling it. Nor is there anything there that says you can do it once but not twice or twice but not three times, etc.
 
I should have been more clear, intended to to say if you are selling items from your collection, you are OK, but if at the same time you are acquiring more to sell, and putting them on your sales table, you're a dealer, and the occasional sale defense is a fiction.

I do buy guns for investment sometimes, that won't make me a dealer.
 
If they are engaged in the "BUSINESS" of selling firearms they need a license. That is the FEDERAL law.

Occasionally selling off your personal FAs, even at a profit does not require a license. The question arises when you are regularly selling off your "collection" every weekend with new inventory and "getting" firearms that people place orders for. This tends to look more like a business and would require a license.

I can't speak to the crazy laws in some states, but this is the FEDERAL position.
 
I guess we're all dealers then
Click to expand...
Go back and read Frank's post. Being a a dealer involves "regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms."

At what point does it become "regular course of trade?" There's no exact number, but I've not heard of the ATF prosecuting anyone for selling a couple of guns here and there. Someone who maintains a regular commercial presence at a gun show is a different matter.
 
Tom Servo said:
dakiwi13 said:
I guess we're all dealers then
Click to expand...
Go back and read Frank's post. Being a a dealer involves "regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms."

At what point does it become "regular course of trade?" There's no exact number, but I've not heard of the ATF prosecuting anyone for selling a couple of guns here and there. Someone who maintains a regular commercial presence at a gun show is a different matter.
Click to expand...
That a good summary. Anyone looking for a clear, definitive, "bright line" answer is out of luck; and continuing to repeat the same things in different ways won't help.

If you sold one or two guns out of your safe last year, you're not a dealer -- even if you made a handsome profit. If you're at the local flea market each week with a few different guns to sell, you should reasonably expect your activities to come to the attention of a federal grand jury. But no one can really tell you with much certainty where between those two extremes you need to start worrying.
 
You must log in or register to reply here.
Back
Top