Do I Need a License to Buy and Sell Firearms Guide

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

FIREARMS?

DO I NEED

A LICENSE

TO BUY AND SELL

Bureau of Alcohol, Tobacco, Firearms

and Explosives

Do I Need a License to Buy and Sell Firearms?

Guidance to help you understand

when a Federal Firearms License

is required under federal law.

Updated August 2023*

The guidance set forth herein has no regulatory effect and

is not intended to create or confer any rights, privileges,

or beneﬁts in any matter, case, or proceeding. See United

States v. Caceres, 440 U.S. 741 (1979).

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Key Points

• Federal law requires that persons who are engaged in the business of dealing

in rearms be licensed by ATF. The penalty for dealing in rearms without a

license is up to ve years in prison, a ne up to $250,000, or both.

• A person can be engaged in the business of dealing in rearms regardless of

the location in which they conduct rearm transactions. For example, a person

can be engaged in the business of dealing in rearms even if they conduct

rearm transactions only at gun shows or through the Internet.

• Whether you are “engaged in the business” of dealing in rearms depends on

the specic facts and circumstances of your activities.

• While quantity and frequency of sales are relevant indicators, courts have

upheld convictions for dealing without a license when as few as two rearms

were sold, or when only a single transaction took place, when other factors

were also present.

• As a general rule, you will need a license if you repetitively buy and sell

rearms to predominantly earn a prot. (Note that this reects a change made

in 2022 by the Bipartisan Safer Communities Act, broadening the denition,

from the previous general rule that you would need a license if you repetitively

bought and sold rearms “with the principal objective of livelihood and prot.”)

By contrast, if you make only occasional sales of rearms from your personal

collection, you likely do not need to be licensed.

• Courts have identied several factors relevant to determining whether you

need a license, including: whether you represent yourself as a dealer in or as

a source of rearms; whether you are repetitively buying and selling rearms;

the circumstances under which you are selling rearms; and whether you are

looking to make a prot.

If you have any questions about whether you need a license under federal law,

we recommend that you contact your local ATF ofce (https://www.atf.gov) to

evaluate the facts and circumstances of your particular case.

CONTENTS

Introduction .................................................................... 1

Legal Framework

............................................................ 2

Gun Shows, Flea Markets,

and Internet Sales

........................................................... 3

Guidance

........................................................................ 4

Examples

...................................................................... 10

Questions and Answers on

Getting a Federal Firearms License

............................... 13

Federal ﬁrearms licensees

(FFL) are critical partners in

promoting public safety…

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Introduction

The Federal Gun Control Act (GCA), codiﬁed at 18 U.S.C. §§ 922(a)(1)(A)

and 923(c), requires that any person engaged in the business of dealing

in ﬁrearms must be licensed by the Bureau of Alcohol, Tobacco, Firearms

and Explosives (ATF). Federal rearms licensees (FFL) are critical partners in

promoting public safety because—among other things—they help keep rearms

out of the hands of prohibited persons by running background checks on

potential rearms purchasers, ensure that guns used in crimes can be traced back

to their rst retail purchaser by keeping records of transactions, and facilitate

safe storage of rearms by providing child safety locks with every transferred

handgun and having secure gun storage or safety locks available any place where

they sell rearms. A person who willfully engages in the business of dealing in

rearms without the required license is subject to criminal prosecution, and can

be sentenced to up to ve years in prison, ned up to $250,000, or both. See 18

U.S.C. § 922(a)(1)(A).

Determining whether your rearm-related activities require a license is a fact-

specic inquiry. This guidance is intended to help you determine whether you

need to be licensed under federal law.

Note that some states have more stringent laws with respect to when a

state-issued license is required for selling a ﬁrearm. Please consult the laws

of the applicable state to ensure compliance.

There are other laws and regulations that govern the transfer of rearms—both

between unlicensed individuals and from licensed dealers (e.g., unlicensed sellers

may only lawfully sell to persons within their own state, and it is unlawful for

either licensed or unlicensed sellers to sell rearms to persons they know or have

reasonable cause to believe cannot lawfully possess them). All persons who

transfer ﬁrearms, regardless of whether they are engaged in the business of

dealing in ﬁrearms, must ensure that any transfers are in compliance with

federal, state, tribal, and local laws.

*This publication has been updated to reﬂect amendments made to the deﬁnition of “engaged in the

business” by the Bipartisan Safer Communities Act, Public Law 117-159 (June 25, 2022). On September 8,

2023, ATF published a Notice of Proposed Rulemaking that would further clarify, among other things, what it

means for a person to be engaged in the business of dealing in ﬁrearms. This publication may be updated in

the future to reﬂect the outcome of that rulemaking.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Questions and Answers (Q and A)

Legal Framework

Q: Who needs a federal license to deal in ﬁrearms?

A: Under federal law, any person who engages in the business of dealing in

ﬁrearms must be licensed.

Q: What does it mean to be “engaged in the business of dealing in ﬁrearms”?

A: Under federal law at 18 U.S.C. § 921(a)(21)(C), a person engaged in the

business of dealing in ﬁrearms is a person who “devotes time, attention

and labor to dealing in ﬁrearms as a regular course of trade or business to

predominantly earn a proﬁt through the repetitive purchase and resale of

ﬁrearms.” In 2022, the Bipartisan Safer Communities Act (BSCA) revised

this intent language to replace “with the principal objective of livelihood and

proﬁt” with “to predominately earn a proﬁt.”

Section 921, as amended by BSCA, deﬁnes the term “to predominantly earn

a proﬁt” to mean “the intent underlying the sale or disposition of ﬁrearms is

predominantly one of obtaining pecuniary gain, as opposed to other intents,

such as improving or liquidating a personal ﬁrearms collection.” 18 U.S.C. §

921(a)(22). Section 921 explicitly provides, however, that the term “engaged in

the business,” as it applies to a dealer of ﬁrearms, does not include a person

who only “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.” 18 U.S.C. § 921(a)(21)(C).

Q: Has ATF deﬁned what it means to be “engaged in the business” of dealing

in ﬁrearms?

A: In the near future, ATF will be publishing a revised regulatory deﬁnition in

27 CFR 478.11 for the term “engaged in the business” and

adding a deﬁnition of “predominantly earn a proﬁt”

that conforms to the above-mentioned

BSCA statutory revisions. The statutory

deﬁnitions quoted above are the

controlling standard, before and after

that regulatory update occurs.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Questions and Answers (Q and A)

Gun Shows, Flea Markets, and Internet Sales

Q: What if I only sell ﬁrearms at ﬂea markets, gun shows, or over the

Internet?

A: A person can be engaged in the business of dealing in ﬁrearms regardless

of the location in which ﬁrearms transactions are conducted, including

where the person conducts ﬁrearms transactions only from a location other

than a traditional brick-and-mortar store.

Many licensed gun dealers conduct business at temporary locations

such as qualiﬁed gun shows or events and utilize the Internet to facilitate

ﬁrearms transactions. The question under federal law is not where ﬁrearms

transactions are conducted, but rather, whether— under a totality of the

circumstances— the person conducting those transactions is engaged

in the business of dealing in ﬁrearms. The factors listed in the Guidance

section below apply to that determination regardless of where the ﬁrearms

transactions occur.

The growth of new communications technologies and e-commerce enables

sellers of ﬁrearms to advertise to an expansive market at minimal cost.

While a collector or hobbyist may use the Internet and other communication

technology to sell a ﬁrearm without a license (provided that they comply

with all other federal and state laws and regulations), those engaged in the

business of dealing in ﬁrearms who utilize the Internet or other technologies

must obtain a license, just like a traditional dealer whose business is run

out of a traditional brick and mortar store. Nonetheless, regardless of the

location or the media a dealer uses to buy and sell ﬁrearms, to obtain a

license, the dealer must have a ﬁxed premises from which to conduct

business and must comply with state and local laws regarding the conduct

of that business. See 18 U.S.C. § 923(d)(1)(E); 27 CFR §§ 478.47(b)(5),

478.50.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Guidance

A. Overview

What activities require a dealer’s license?

Federal law does not establish a “bright-line” rule for when a federal rearms

license is required. As a result, there is no specic threshold number or

frequency of sales, quantity of rearms, or amount of prot or time invested

that triggers the licensure requirement. Instead, determining whether you

are “engaged in the business” of dealing in ﬁrearms requires looking

at the speciﬁc facts and circumstances of your activities. Courts have

upheld convictions for dealing without a license when as few as two rearms

were sold, or when only a single transaction took place, when other factors

were also present.

As a general rule, you will need a license if you repetitively buy and sell

ﬁrearms to predominantly earn a proﬁt. By contrast, if you make only

occasional sales of different second-hand ﬁrearms to enhance your

personal collection, you likely do not need to be licensed. In either case,

all of your rearms transactions are relevant, regardless of their location or

medium; it does not matter if you conduct sales out of your home, at gun

shows, ea markets, through the Internet, or by other means.

As a general rule, you will need a license if you repetitively buy and sell

ﬁrearms to predominantly earn a proﬁt. By contrast, if you make only

occasional sales of different second-hand ﬁrearms to enhance your

personal collection, you likely do not need to be licensed.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

B. Factors Identiﬁed by Federal Courts

Federal courts have identied several factors that can help you determine

whether you must obtain a license. They include but are not limited to:

whether you represent yourself as a source of rearms for purchase; whether

you are repetitively buying and selling rearms; the circumstances under

which you are selling rearms; and whether you intend to make a prot.

Some relevant factors: whether you represent yourself as a source of

ﬁrearms for purchase; whether you are repetitively buying and selling

ﬁrearms; the circumstances under which you are selling ﬁrearms; and

whether you are looking to make a proﬁt.

Are you representing yourself as a dealer in ﬁrearms?

Perhaps the clearest indication of whether a person is “engaged in the

business” of dealing in rearms can be found in what he or she represents

to others. Some factors that may demonstrate that you are engaged in the

business of dealing in rearms include: representing yourself as a source

of rearms for customers, taking orders, and offering to buy rearms to

resell. Your intent to deal in rearms can also be reected by undertaking

activities that are typically associated with businesses—for example, creating

a business entity or trade name for your rearms activity, securing state or

local business licenses to sell items that may include rearms, purchasing a

business insurance policy or rider to cover a rearms inventory, commercial

advertising, keeping records of prot and losses, printing business cards,

registering a web domain or social media account from your business, setting

up merchant accounts or digital wallets, and accepting credit card payments.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Are you repetitively buying and selling ﬁrearms?

As noted above, there is no specic threshold number of rearms purchased

or sold that triggers the licensure requirement. Similarly, there is no “magic

number” related to the number or frequency of transactions that indicates

whether a person is “engaged in the business” of dealing in rearms. It

is important to note, however, that even a single ﬁrearm transaction,

when combined with other evidence (such as an offer to obtain and

sell additional ﬁrearms), can be sufﬁcient to establish that a person is

“engaged in the business” of dealing in ﬁrearms. For example, courts

have upheld convictions for dealing without a license when only one or two

transactions took place. That said, courts have looked at both the quantity

of rearms sold, as well as the frequency of sales, as relevant indicators.

When combined with other factors, selling signicant numbers of rearms

or engaging in frequent transactions may be highly indicative of business

activity.

What are the circumstances under which you are selling

ﬁrearms? Are you selling shortly after acquiring them?

Repeatedly selling the same type of ﬁrearm?

Or repetitively selling new ﬁrearms?

In addition to the volume and frequency of rearms transactions, the timing

and circumstances surrounding rearms transactions are also signicant

indicators of whether a person is engaged in the business. Repetitively selling

or offering to sell rearms shortly after they are acquired; restocking inventory;

repetitively acquiring the same type of rearm or a signicant quantity of the

same type of rearm, and then reselling or offering to sell those rearms; and/

or repetitively acquiring and reselling or offering to sell rearms in unopened

or original packaging (or in new condition), are all factors which individually or

combined may indicate a person is engaged in the business.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Are you looking to make a proﬁt?

As noted above, if you are repetitively buying and selling rearms “to

predominantly earn a prot,” you must be licensed. Note that this differs

from the standard prior to BSCA’s statutory changes in 2022. That previous

standard was, “with the principal objective of livelihood and prot.” However,

the key under either standard is the seller’s intent or objective to earn a prot.

On that basis, the courts have made clear that a person can be “engaged

in the business” of dealing in rearms without actually making a prot. In

determining whether a seller has the required intent or objective, courts have

looked to different factors, including prices that an unlicensed seller charges

for rearms.

In some cases, prices reect appreciation in actual market value resulting

from having held a rearm as part of a personal collection or reect a

prot intended to be used to acquire another rearm as part of a personal

collection. As a result, the fact that a transaction results in a prot for the

seller is not always determinative.

Finally, it is important to note that courts have found that you can be engaged

in the business of dealing in rearms even if your rearm-related activities are

not your primary business. In other words, you can still be engaged in the

business of dealing in rearms “to predominantly earn a prot” if you have a

full-time job and are buying and selling rearms to supplement your income.

ATF regulations specically note that the term “dealer” includes a person who

engages in such a business on a part-time basis.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Does a Curio and Relics Collector’s license

(C&R license) allow me to be engaged in the business

of dealing in ﬁrearms?

The C&R license does not authorize the licensee to repetitively buy and sell

rearms with the predominant motive of making a prot. It does not matter if

the rearms being bought and sold are curios or relics, or newer rearms. If

a C&R licensee wishes to engage in the business of dealing in rearms, he or

she must also apply for a different type of license that allows this activity. See

27 C.F.R. § 478.41(c), (d).

Do I need a license if I’m an auctioneer and simply auction guns

for my customers?

If you repeatedly conduct auctions for rearms that are rst consigned to you

for sale, and you intend to make money from those sales, you need a license.

If, however, you simply offer auctioneer services without having the rearms

transferred to you (for example, you are hired by the representative of an

estate to travel to the location of the estate, assist the estate in conducting an

auction, and the rearms remain the property of the estate until transfer to the

buyer), and you do not otherwise engage in the business of dealing rearms,

you need not be licensed.

The following examples

show how factors identiﬁed

by federal courts apply to

common fact patterns.…

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Examples

While the determination of whether you require a federal rearms license is

highly fact- specic, we provide the following examples to show how the

factors identied by federal courts apply to common fact patterns. Of course,

the existence or absence of other facts not included in the examples may

change the conclusion as to whether you are engaged in the business and

therefore must be licensed; hence, these examples are provided solely as

general guidance. For the purposes of these examples, assume that the sellers

comply with all other relevant federal and state laws and regulations (for example,

any unlicensed person makes only lawful sales to persons who reside in the same

state).

JULIAN inherits a collection of ﬁrearms from his grandfather. He would rather

have cash than the ﬁrearms, so he posts them all online for sale. He makes

no purchases, but over the course of the next year he sells all the ﬁrearms he

inherited in a series of different transactions. Julian does not need a license

because he is liquidating a personal collection.

KIERAN has a job outside the ﬁrearms industry, but to supplement his income,

he has been buying ﬁrearms from friends and reselling them through an Internet

site. He has successfully sold a few ﬁrearms this way and has several more

listed for sale at any one time. Kieran must be licensed because he is repetitively

buying and selling ﬁrearms to predominantly earn a proﬁt.

AHMAD enjoys hunting and has a large variety of hunting riﬂes. He likes to have

the newest models with the most current features. To pay for his new riﬂes, a few

times a year Ahmad sells his older weapons to fellow hunters and makes a proﬁt.

Ahmad does not need to be licensed because he is engaging in occasional sales

for enhancement of his personal collection.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

DANYA travels to ﬂea markets the ﬁrst Saturday of every month, buying

undervalued goods, including ﬁrearms. The last Saturday of every month, Danya

rents a booth at the ﬂea market and sells her items at market value for a proﬁt.

She hopes to make enough money from these sales to ﬁnance a trip to Italy next

year. Danya must get a license because she is repetitively buying and selling

ﬁrearms to predominantly earn a proﬁt.

VIOLETTE regularly travels to gun shows around her state, rents space, and sells

ﬁrearms under a banner stating, “liquidating personal collection.” Most of the

ﬁrearms Violette offers for sale she purchased from a licensed dealer in the prior

weeks. Violette is retired and hopes to supplement her income with the money

she makes on the sales, although she has yet to turn a proﬁt. Violette must get a

license because she is repetitively buying and selling ﬁrearms to predominantly

earn a proﬁt.

ERIKA has three handguns at home and decides that she no longer wants two

of them. She posts an advertisement in the local newspaper and sells the two

handguns to a local collector. Erika does not need a license because she is not

engaging in the repetitive purchase and resale of ﬁrearms as a regular course of

trade or business.

EUGENE regularly attends gun shows and rents a table to display ﬁrearms for

sale. He gets ﬁrearms from a variety of sources, carefully logs each purchase into

a book, and uses the purchase price to set a sales price that will realize him a net

proﬁt. Eugene accepts credit card payments and typically sells multiple ﬁrearms

at each of the gun shows he attends each year. Eugene must be licensed

because he is repetitively buying and selling ﬁrearms to predominantly earn a

proﬁt.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

ZOEY enjoys shooting sports and frequently goes to shooting ranges and hunting

clubs. To make some extra money, she buys ﬁrearms from a dealer who is willing

to give her a discount, and she resells them for a proﬁt to acquaintances from

the shooting ranges and hunting clubs. Zoey has done this a few times a month

for the last several months and has been spreading the word that she is a source

for other ﬁrearms, including by passing out business cards with her name, phone

number, and email. Zoey must get a license because she is repetitively buying

and selling ﬁrearms to predominantly earn a proﬁt.

RITA tells her neighbor Tom that she’s thinking about getting a gun, so Tom

shows her a handgun and offers to sell it to her. Rita doesn’t like the look of the

gun and decides not to buy it. Tom tells her that, if she gives him a few days, he

can get whatever kind of gun she wants. Rita tells Tom the ﬁrearm she wants,

and a few days later, Tom sells it to her in its original packaging at a marked-

up price. Tom then asks Rita to spread the word to her friends that Tom can

get them guns as well. Tom must obtain a license because he is intending to

predominantly earn a proﬁt by repetitively buying and selling ﬁrearms.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

FIREARMS?

HOW DOES ONE GET

A LICENSE

TO BUY AND SELL

Questions and Answers on

Getting a Federal Firearms License

Q: How do I become licensed?

A: The license application (called the ATF Form 7) is straightforward

and can be found here: https://www.atf.gov. In

addition to the application itself, an applicant

for a federal ﬁrearms license must

also provide to ATF a photograph,

ﬁngerprints, and the license

application fee, currently set at $200

for the initial three-year period, and

$90 for each three-year renewal.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Q: What standards does ATF use to determine whether to give me a license?

A: Under 27 CFR § 478.47, ATF will approve an application for a federal

ﬁrearms license if the applicant:

• Is 21 years of age or older;

• Is not prohibited from shipping, transporting, receiving, or possessing

ﬁrearms or ammunition;

• Has not willfully violated the GCA or its regulations;

• Has not willfully failed to disclose material information or willfully made

false statements concerning material facts in connection with the

application;

• Has a premises for conducting business; and

Certiﬁes that:

• the business to be conducted under the license is not prohibited by state

or local law in the place where the licensed premises is located;

• within 30 days after the application is approved, the business will comply

with the requirements of state and local law applicable to the conduct of

the business;

• business will not be conducted under the license until the requirements

of state and local law applicable to the business have been met;

• the applicant has sent or delivered a completed ATF Form 7/7CR,

Application for License, to the chief law enforcement ofﬁcer where the

premises is located, notifying the ofﬁcer that the applicant intends to

apply for a license; and

• secure gun storage or safety devices will be

available at any place in which ﬁrearms

are sold under the license to persons

who are not licensees.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Q: What obligations will I have once I become licensed?

A: Licensed ﬁrearms dealers are subject to certain requirements under federal

law, including running background checks on any non-licensed person

prior to transferring a ﬁrearm to that person (subject to narrow exceptions),

keeping ﬁrearms transaction records so that crime guns can be traced to

their ﬁrst retail purchaser, and ensuring safety locks are provided with every

handgun and available in any location where ﬁrearms are sold. See, e.g., 27

CFR Subparts F and H.

Licensees are also prohibited by law from knowingly transferring

handguns to unlicensed persons who do not reside in the state where

the licensee’s premises are located, and from knowingly transferring

any ﬁrearm to underage persons and certain categories of “prohibited

persons,” including, among others, felons, persons who were involuntarily

committed to mental institutions, aliens who are unlawfully present in

the United States, and persons convicted of a misdemeanor crime of

domestic violence. Note that, due to statutory changes as part of BSCA in

2022, this last category now includes those whose offenses were committed

against a person with whom they were in a current or recent former dating

relationship (for more details, see the deﬁnition at 18 U.S.C. § 921(a)(33)

(A)(ii)). Under federal law, licensees are subject to inspection and are also

required to respond to requests for ﬁrearms tracing information within 24

hours.

This list is not all inclusive; more information about the requirements of

having a federal ﬁrearms license can be found at https://www.atf.gov and by

contacting your local ATF Ofﬁce. A list of local ofﬁces can also be found at

https://www.atf.gov.

DO I NEED A LICENSE TO BUY AND SELL FIREARMS?

Guidance to help you understand when a Federal

Firearms License is required under federal law.

Q: What if I don’t need to be licensed, but I want to make sure a background

check is run on a potential purchaser of my gun?

A: Private, unlicensed sellers can help ensure that potential purchasers are not

prohibited from possessing ﬁrearms by using a licensed dealer to facilitate

the sale and transfer of a ﬁrearm. For a small fee, many licensed dealers will

facilitate a sale of a ﬁrearm between two unlicensed individuals. This service

provides both customers and the community with assurance that individuals

who want to purchase ﬁrearms undergo a comprehensive background

check, which helps to ensure the buyer is not prohibited from possessing a

ﬁrearm and can improve the ability of law enforcement to trace ﬁrearms if

they are later recovered in connection with a crime. In 2016, ATF published a

guide for licensed dealers to educate them on how to facilitate private sales,

and published ATF Procedure 2020-2, which provides further guidance.

The decision to facilitate private sales is wholly voluntary on the part of the

licensed dealer.

Additional information can be found at https://www.atf.gov/ﬁrearms/

deﬁnition-engaged-business-dealer-ﬁrearms.

ATF Publication 5310.2

August 2023