3 Myths about Biden’s New Gun License Rule

by Braxton Taylor

The Biden administration finalized a new rule last week described by Attorney General Merrick Garland as a “historic step” in the “fight against gun violence.” It aims to increase the number of background checks on gun sales by expanding the pool of people who must obtain a federal firearms license.

“There is a large and growing black market of guns that are being sold by people who are in the business of dealing and are doing it without a license; and therefore, they are not running background checks the way the law requires. And it is fueling violence,” said Director Steven Dettelbach of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

The rule establishes a new(ish) definition of “gun dealer” to, as Biden officials have explicitly stated, bring the country as close as possible to a universal background check system without going through Congress.

Unfortunately, as is often the case, misinformation and outright lies have abounded in the wake of the announcement from the Justice Department. Some of it is being pushed by activist groups (from both sides). Other myths are being promulgated by the corporate media while still others are being spread by the White House itself.

Some Background

To understand this new rule, you need to do what most American journalists have apparently not done and familiarize yourself with the laws governing gun sales. If you’re already familiar, you can skip this section. Otherwise, stay with me.

Federal law requires all gun dealers, from Cabela’s to your local gun shop, to conduct a background check prior to selling a firearm. This is done via the National Instant Criminal Background Check System (NICS), and if you’ve ever bought a gun from a gun shop, you know how it works.

However, federal law also allows individual gun owners who don’t qualify as gun dealers to make private sales without conducting a background check.

Twenty states have decided to ban those private sales and require all gun transfers to be conducted by licensed dealers. But if you live in one of those 30 other states, you can sell a gun to a friend, family member, or complete stranger without running a background check–as long as you aren’t “engaged in the business” of selling guns.

The New Rule

This new rule from the Biden administration seeks to restrict the number of legal private sales by expanding the definition of “gun dealer.”

The old rule required a person to obtain a federal firearms license (FFL) (and thus conduct background checks on all gun sales) if they engage in “a course of trade or business” involving “repetitive” buying and reselling of firearms with the primary objective of “livelihood and profit.”

The new rule retains the language about repetitiveness and “engaged in the business” but removes the “livelihood” element. Instead, it says that someone must obtain a license if their goal in selling a gun is to “predominantly earn a profit.” In other words, it doesn’t matter whether you support yourself by selling guns as long as you sell guns primarily for profit.

So, if you sell the occasional firearm, how do you know whether you’re supposed to get an FFL?

Along with the 466-page rule, the ATF has published an FAQ document that offers the closest thing we’re going to get to a straight answer to that question. If you ever sell firearms in private transactions (or you ever plan to), you’ll want to take the time to read this document closely (rather than take the word of gun writers on the Internet, most of whom were English majors because they couldn’t get into law school).

As a general rule, you will need a license if you repetitively buy and sell firearms to predominantly earn a profit. Selling guns to upgrade or liquidate your personal collection probably isn’t enough to qualify as a gun dealer. Sales must be repetitive (i.e., multiple in a short period of time), and there must also be evidence that you are “engaged in the business” of selling guns (i.e., you rent space at a gun show or have a business website).

But the ATF also says that it doesn’t matter how much money you make from a gun sale or what you use the money for–in one of their examples, a person could be selling guns to pay medical bills and still qualify as a “gun dealer.”

Myth #1: The New Rule Closes the “Gun Show Loophole”

From Vice President Kamala Harris to White House Press Secretary Karine Jean-Pierre to almost literally every mainstream media outlet in the country, everyone claims this new rule will close the so-called “gun show loophole.”

If you take these sources at their word, you might assume that gun shows have enjoyed some kind of legal immunity. The reality, of course, is that there never was a gun show loophole. The buyers and sellers at gun shows must operate under the same legal framework as at gun stores, in grocery store parking lots, or at private residences. Those engaged in the business of selling firearms, as per the ATF’s definition, must run background checks. Private sellers don’t, no matter where they are.

It is true that gun shows connect potential gun buyers with sellers. This facilitates private gun sales that may not happen otherwise. But whether those sales are legal or illegal has nothing to do with where they take place. If they’re illegal, they’d be illegal at the local park, back alley, or anywhere else.

Contrary to what the White House would have you believe, Biden’s new rule will still allow private transactions to take place at gun shows. Private sales are still perfectly legal under this new rule as long as the seller isn’t repetitively selling guns as part of a business to predominantly earn a profit. As per the ATF’s FAQ doc, you can even rent a table at a gun show as long as you don’t do it “repetitively or continuously.”

The rule may scare some private sellers away from gun shows and encourage other means of connecting with potential buyers. This might be what the Biden admin means when it says it’s closing the “gun show loophole,” but it could also have unintended consequences. Gun shows make it easier for law enforcement to identify bad actors. This new rule might force those bad actors away from gun shows and into less easily surveillable locations.

Myth #2: The New Rule Clarifies… Anything

The word “clarify” appears 86 times in the 466-page rule, and the authors of the Bipartisan Safer Communities Act cite clarity as the motivation for changing the U.S. Code on this issue. But does the rule actually clarify anything?

Let me put it this way: if you have to publish a 19-page FAQs document to explain a policy supposedly meant to “clarify” an existing policy, you have not, as the kids say these days, understood the assignment.

Let me put it another way: do you understand the difference between selling guns “with the principal objective of livelihood and profit” (the old language) and selling guns “predominantly to earn a profit” (the new language)?

The new language strips away the livelihood concept, which seems like a step in the direction of clarity. But it only seems more clear if you don’t spend much time thinking about it (as most American journalists apparently haven’t). You can still sell guns without a license and make a profit under the new rule as long as that’s not your “predominant” motivation. But what, exactly, does that mean?

If the ATF knows, they aren’t saying. Here are just a few snippets from that FAQs document I mentioned (emphasis added).

  • To “predominantly earn a profit” means that the intent underlying the sale or disposition of firearms as predominantly one of obtaining pecuniary gain, as opposed to other intents, such as improving or liquidating a personal firearms collection.
  • For purposes of this definition, 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.
  • The amount of money a person makes when intending to earn a profit through repetitively purchasing and reselling firearms is relevant in determining whether a person is engaged in the business.
  • However, there is no statutory requirement that a person actually make a certain amount of money to have a predominant intent to profit.

Keep in mind, these are just the “clarifications” for “predominantly earn a profit.” There are other standards that must be met before you need to get an FFL. For example, you have to be “engaged in the business” of selling firearms and you have to sell firearms “repetitively.”

You might assume, if the ATF really wanted to clarify their standards, they’d lay down some hard numbers. If you sell a certain number of firearms within a certain time frame, you have to get a license. But they explicitly reject that idea. Instead, they say that “even one transaction or attempted transaction can constitute ‘engaging in the business’ if other factors or intent are present.”

At the end of the day, there are no clear standards because, as the ATF says, “it is the seller’s motivation that determines whether a person needs a license, not the number of sales or amount of profit.”

Some might argue that this lack of clarity is precisely the point. If gun owners are nervous about getting hit with a federal indictment for selling a gun, they’ll be less likely to make the sale–even if it’s perfectly legal.

Myth #3: The New Rule Is a Major Change

It is unfortunate the Biden administration punted on this opportunity to clarify this issue. But I’m not sure the new rule will actually change all that much. This isn’t a popular opinion on either side of the debate.

On the one hand, the president and his allies are trying to convince everyone that the new rule is “historic.” They say it will force more than 20,000 individuals to get an FFL and conduct background checks, which will affect “tens and tens of thousands of gun sales” each year.

The National Rifle Association agrees with this assessment. They say the new rule “threatens to turn untold thousands of upstanding citizens into criminals for exercising their constitutional rights.” They also worry that forcing more gun transactions through the NICS background check system is “a prerequisite to any future scheme of large-scale registration and confiscation, whenever guns are retroactively banned.”

I don’t have any inside knowledge about how many sellers this rule will impact. Twenty thousand individuals isn’t a lot in a country of 83 million gun owners, and “tens and tens of thousands” is the kind of language you use when you really have no idea.

What’s more, the ATF has said for years that it’s possible to trigger a license requirement for even a single gun transaction. Profit was always one of the criteria, and the unclear definitions of “engaged in the business” have been a longstanding thorn in the side of law-abiding gun owners.

If private gun sellers spent any time digging into this issue, they already knew about all the vagaries of the ATF’s regulations. I don’t know how many people who were comfortable selling firearms under the “livelihood and profit” regime are now going to be scared away under the “predominantly earn a profit” regime. I’m not saying either rule is great (or constitutional)–but I don’t think this changes the world in one direction or another.

Last Shot

Some legal, private sellers will undoubtedly be scared away. But it probably won’t be the high-volume sellers the ATF says they’re worried about (after all, those folks were likely violating the law under the old rule). It will probably be law-abiding Average Joe hunters who would like to upgrade their deer guns by selling their old ones but are now afraid the ATF agent will kick down their door if they do.

That’s the problem with unclear gun laws: they invariably harm the people who society has the least cause to censor without doing much to stop the people who do the most damage.



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