§ 478.13 Definition of “engaged in the business as a dealer in firearms other than a
gunsmith or a pawnbroker.”
(a) Definition. 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. The 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 the person’s personal
collection of firearms. In addition, the term shall not include an auctioneer who provides
only auction services on commission to assist in liquidating firearms at an estate-type
auction; provided, that the auctioneer does not purchase the firearms, or take possession
of the firearms for sale on consignment.
(b) Fact-specific inquiry. Whether a person is engaged in the business as a dealer
under paragraph (a) of this section is a fact-specific inquiry. Selling large numbers of
firearms or engaging or offering to engage in frequent transactions may be highly
indicative of business activity. However, there is no minimum threshold number of
firearms purchased or sold that triggers the licensing requirement. Similarly, there is no
minimum number of transactions that determines whether a person is “engaged in the
business” of dealing in firearms. For example, even a single firearm transaction or offer
to engage in a transaction, when combined with other evidence (e.g., where a person
represents to others a willingness and ability to purchase more firearms for resale), may
require a license; whereas, a single isolated firearm transaction without such evidence
would not require a license. At all times, the determination of whether a person is
engaged in the business of dealing in firearms is based on the totality of the
circumstances.
(c) Presumptions that a person is engaged in the business as a dealer. In civil
and administrative proceedings, a person shall be presumed to be engaged in the business
of dealing in firearms as defined in paragraph (a) of this section, absent reliable evidence
to the contrary, when it is shown that the person—
(1) Resells or offers for resale firearms, and also represents to potential buyers or
otherwise demonstrates a willingness and ability to purchase and resell additional
firearms (i.e., to be a source of additional firearms for resale);
(2) Repetitively purchases for the purpose of resale, or repetitively resells or
offers for resale, firearms—
(i) Through straw or sham businesses, or individual straw purchasers or
sellers; or
(ii) That cannot lawfully be purchased, received, or possessed under
Federal, State, local, or Tribal law, including:
(A) Stolen firearms (e.g., 18 U.S.C. 922(j));
(B) Firearms with the licensee’s serial number removed,
obliterated, or altered, or not identified as required by law (e.g., 18 U.S.C.
922(k) or 26 U.S.C. 5861(i));
(C) Firearms imported in violation of law (e.g., 18 U.S.C. 922(l),
22 U.S.C. 2778, or 26 U.S.C. 5844, 5861(k)); or
(D) Machineguns or other weapons defined as firearms under 26
U.S.C. 5845(b) that cannot lawfully be possessed (e.g., 18 U.S.C. 922(o);
26 U.S.C. 5861(d));
(3) Repetitively resells or offers for resale firearms—
(i) Within 30 days after the person purchased the firearms; or
(ii) Within one year after the person purchased the firearms if they are—
(A) New, or like new in their original packaging; or
(B) The same make and model, or variants thereof;
(4) As a former licensee (or responsible person acting on behalf of the former
licensee), resells or offers for resale to a person (other than a licensee in accordance with
§§ 478.57 or 478.78) firearms that were in the business inventory of the former licensee
at the time the license was terminated (i.e., license revocation, denial of license renewal,
license expiration, or surrender of license), whether or not such firearms were transferred
to a responsible person of the former licensee after the license was terminated in
accordance with §§ 478.57(b)(2) or 478.78(b)(2); or
(5) As a former licensee (or responsible person acting on behalf of the former
licensee), resells or offers for resale firearms that were transferred to the licensee’s
personal collection or otherwise as personal firearms in accordance with 18 U.S.C. 923(c)
and 27 CFR 478.125a(a) prior to the time the license was terminated, unless:
(i) The firearms were received and transferred without any intent to
willfully evade the restrictions placed on licensees by chapter 44, title 18,
United States Code; and
(ii) One year has passed from the date of transfer to the licensee’s personal
collection or otherwise as personal firearms.
(d) Predominantly earn a profit. (1) Definition. 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: Provided,
that proof of profit, including the intent to profit, shall not be required as to a person who
engages in the regular and repetitive purchase and disposition of firearms for criminal
purposes or terrorism. For purposes of this section, a person may have the intent to profit
even if the person does not actually obtain the intended pecuniary gain from the sale or
disposition of firearms.
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