§ 478.13 Definition of "engaged in the business as a dealer in firearms other than a gunsmith or a pawnbroker."

  1. a.(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.

  2. b.(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.

  3. c.(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. 1.(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. 2.(2) Repetitively purchases for the purpose of resale, or repetitively resells or offers for resale, firearms—

      1. i.(i) Through straw or sham businesses, or individual straw purchasers or sellers; or

      2. ii.(ii) That cannot lawfully be purchased, received, or possessed under Federal, State, local, or Tribal law, including:

        1. A.(A) Stolen firearms ( e.g., 18 U.S.C. 922(j));

        2. B.(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));

        3. C.(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

        4. D.(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. 3.(3) Repetitively resells or offers for resale firearms—

      1. i.(i) Within 30 days after the person purchased the firearms; or

      2. ii.(ii) Within one year after the person purchased the firearms if they are—

        1. A.(A) New, or like new in their original packaging; or

        2. B.(B) The same make and model, or variants thereof;

    4. 4.(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. 5.(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:

      1. i.(i) The firearms were received and transferred without any intent to willfully evade the restrictions placed on licensees by 18 U.S.C. chapter 44; and

      2. ii.(ii) One year has passed from the date of transfer to the licensee's personal collection or otherwise as personal firearms.

  4. d.(d) Predominantly earn a profit

    1. 1.(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.

    2. 2.(2) Presumptions that a person has intent to predominantly earn a profit. In civil and administrative proceedings, a person shall be presumed to have the intent to predominantly earn a profit through the repetitive purchase and resale of firearms as defined in paragraph (d)(1) of this section, absent reliable evidence to the contrary, when it is shown that the person—

      1. i.(i) Repetitively or continuously advertises, markets, or otherwise promotes a firearms business ( e.g., advertises or posts firearms for resale, including through the internet or other digital means, establishes a website to offer their firearms for resale, makes available business cards, or tags firearms with sales prices), regardless of whether the person incurs expenses or only promotes the business informally;

      2. ii.(ii) Repetitively or continuously purchases, rents, or otherwise exchanges (directly or indirectly) something of value to secure permanent or temporary physical space to display firearms they offer for resale, including part or all of a business premises, a table or space at a gun show, or a display case;

      3. iii.(iii) Makes and maintains records to document, track, or calculate profits and losses from firearms repetitively purchased for resale;

      4. iv.(iv) Purchases or otherwise secures merchant services as a business ( e.g., credit card transaction services, digital wallet for business) through which the person intends to repetitively accept payments for firearms transactions;

      5. v.(v) Formally or informally purchases, hires, or otherwise secures business security services ( e.g., a central station-monitored security system registered to a business, or guards for security) to protect firearms assets and repetitive firearms transactions;

      6. vi.(vi) Formally or informally establishes a business entity, trade name, or online business account, including an account using a business name on a social media or other website, through which the person makes, or offers to make, repetitive firearms transactions; or

      7. vii.(vii) Secures or applies for a State or local business license to purchase for resale or to resell merchandise that includes firearms.

  5. e.(e) Conduct that does not support a presumption. A person shall not be presumed to be engaged in the business of dealing in firearms when reliable evidence shows that the person is only reselling or otherwise transferring firearms—

    1. 1.(1) As bona fide gifts;

    2. 2.(2) Occasionally to obtain more valuable, desirable, or useful firearms for the person's personal collection;

    3. 3.(3) Occasionally to a licensee or to a family member for lawful purposes;

    4. 4.(4) To liquidate (without restocking) all or part of the person's personal collection; or

    5. 5.(5) To liquidate firearms—

      1. i.(i) That are inherited; or

      2. ii.(ii) Pursuant to a court order; or

    6. 6.(6) To assist in liquidating firearms as an auctioneer when providing auction services on commission at an estate-type auction.

  6. f.(f) Rebuttal evidence. Reliable evidence of the conduct set forth in paragraph (e) of this section may be used to rebut any presumption in paragraph (c) or (d)(2) of this section that a person is engaged in the business of dealing in firearms, or intends to predominantly earn a profit through the repetitive purchase and resale of firearms.

  7. g.(g) Presumptions, conduct, and rebuttal evidence not exhaustive. The activities set forth in the rebuttable presumptions in paragraphs (c) and (d)(2) of this section, and the activities and rebuttal evidence set forth in paragraphs (e) and (f) of this section, are not exhaustive of the conduct or evidence that may be considered in determining whether a person is engaged in the business of dealing in firearms, or has the intent to predominantly earn a profit through the repetitive purchase and resale of firearms.

  8. h.(h) Criminal proceedings. The rebuttable presumptions in paragraphs (c) and (d)(2) of this section shall not apply to any criminal case, although they may be useful to courts in criminal cases, for example, when instructing juries regarding permissible inferences.