Although nearly all firearms in the United States are originally sold by licensed gun dealers, these dealers are subject to very little federal scrutiny. The lack of oversight, due to inadequate funding and gun lobby-backed legislation, too often allows corrupt or irresponsible gun dealers to endanger public safety without any accountability or consequences.

Background

Each year, millions of firearms enter the consumer market through gun dealers, who are the critical link between manufacturers and the general public. While a vast majority of these transactions are conducted responsibly and legally, some firearms sold by gun dealers still end up in the illegal market or recovered in crimes. Unfortunately, dealers are subject to very little federal oversight, allowing guns originating in the legal market to be recovered in crimes too often.

Federal dealer licenses are in high demand because a dealer may purchase unlimited quantities of firearms through the mail, at wholesale prices, without being subject to background checks or any state or local waiting periods. There are more than 80,000 individuals with federal firearms licenses.¹ Of these, nearly 50,000 are “Type 1” which allow licensees to act as firearms dealers and more than 6,000 are “Type 2” which allow licensees to buy and sell guns as pawn brokers.² In total, there are nearly twice as many gun dealers as post offices in the US³—and close to four times as many McDonalds.⁴

Better regulation of gun dealers is an important lever for reducing gun violence, with a robust body of research showing that there is a strong relationship between dealer density and violent crime.

• For example, communities with a higher density of gun dealers also see an 8% higher rate of homicide and an 8% higher rate of robberies.⁵
• Similarly, increases in the number of firearm dealers are linked to higher rates of gun-related crimes in neighborhoods.⁶
• States with a higher density of gun dealers experience twice as many firearm intimate partner homicides.⁷

Gun Dealers and Trafficking

Gun trafficking occurs when guns flow from the legal to illegal market. Oftentimes this flow of guns transpires across state lines. In fact, between 2017 and 2021 more than three in 10 firearm trafficking cases involved interstate trafficking.⁸ Importantly, the flow of firearms used in crimes between states is greatly influenced by state gun laws: Nearly two-thirds of crime guns found in states with strong gun laws were originally sold in states with weak gun laws.⁹

Gun dealers are a major source of illegally trafficking firearms. One report by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) found that, between 2017 and 2021, law enforcement recovered nearly 1.4 million crime guns originally sold by licensed dealers.¹⁰

Thefts from firearm dealers also contribute to gun trafficking. In 2023 alone, nearly 15,000 firearms were reported lost or stolen from federal firearms licensees.¹¹ Many of these guns end up being used in crimes. For example, from 2017 to 2021, nearly one in five firearm trafficking cases involved a firearm stolen from a federal firearms licensee.¹² For more information about gun trafficking, see our page on Trafficking & Straw Purchasing.

Inadequate Oversight

The ATF is the federal agency responsible for regulating and conducting inspections of licensed gun dealers. These inspections determine whether sellers are complying with federal laws. However, for decades, ATF has faced numerous obstacles in doing this job effectively¹³—enabling corrupt dealers to go undetected and unpunished. For example, ATF may conduct only one unannounced inspection of each dealer per year, the burden of proof for prosecution and revocation are extremely high, and serious violations of firearms laws have been classified as misdemeanors rather than felonies. In addition, ATF has historically been grossly underfunded and understaffed. For example, in 2022, there were 816 investigators responsible for inspecting the more than 50,000 Type 1 firearms licensees.¹⁴

Although the ATF aims to inspect FFLs every three years, in 2023 the agency conducted just 9,047 inspections—meaning that just seven percent of all FFLs were inspected that year.¹⁵ Additionally, between 2018 and 2020, field divisions did not meet annual inspection projections 44% of the time.¹⁶

The Importance of Regulation

Research is clear that changes to gun dealer practices can help prevent gun violence and gun crime. For example, when one Milwaukee dealer voluntarily changed their sales practices—namely by halting the sales of certain low-quality, inexpensive handguns—there was a subsequent decrease in the use of such weapons across the city of Milwaukee, a 73% decrease in crime guns recently sold by this dealer in the city, and a 44% decrease in the flow of newly trafficked guns recovered in the city.¹⁹

Policies that require improved regulation of dealers have also been found to effectively reduce violence:

• Some states have supplemented federal oversight with their own regulatory strategies, including requiring enhanced record keeping and more inspections. The most successful states that required gun dealer inspections saw a 36% decrease in the overall homicide rate.²⁰
• States with laws that required a state or local dealer license, stronger record keeping of firearm sales, maintaining dealer records, and reporting firearm thefts to state officials, have been shown to have lower rates of crime guns trafficked to other states.²¹
• Dealers that are noncompliant with regulations have been shown to nearly double the surrounding area’s risk for gun homicide.²²

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Summary of Federal Law

Federal law makes it unlawful for any person except a licensed dealer to “engage in the business” of dealing in firearms.²³ As applied to a firearms dealer, the term “engaged in the business” is defined as:

“[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, 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.”²⁴

By contrast, a so-called “private seller” (one who is not “engaged in the business”) is exempt from federal licensing requirements.²⁵  Additional information about unlicensed sellers is contained in our summary on Universal Background Checks.

The Gun Control Act of 1968²⁶ established the federal licensing system for firearms manufacturers, importers, pawnbrokers, collectors, and dealers, but the requirements imposed were weak.²⁷ In 1992, more than 284,000 people had federal firearms licenses;²⁸ the next year, ATF estimated that 46% of all licensed dealers conducted no business at all, but used their licenses to buy and sell firearms in violation of state and local zoning or tax laws.²⁹

In 1993 and 1994, Congress adopted laws to strengthen the licensing system. The 1993 Brady Handgun Violence Prevention Act increased the license fee from $10 annually to $200 for the first three years and $90 for each additional three-year period.³⁰ That law also required applicants to certify that they had informed local law enforcement of their intent to apply for a license.³¹ The Violent Crime Control and Law Enforcement Act of 1994—most notable for requiring dealers to perform background checks on prospective firearm purchasers for the first time—also required applicants for dealer licenses to submit photographs and fingerprints, and to certify that their business was not prohibited by state or local laws, and would, within 30 days, comply with such laws.³²

In 2022, Congress further strengthened the licensing system when it passed and President Biden signed into law the Bipartisan Safer Communities Act. The law changed the definition of “engaged in the business” of dealing in firearms to include anyone who deals firearms “to predominantly earn a profit,” rather than individuals who sell guns with “the principal objective of livelihood and profit.”³³ According to ATF, the previous definition of “engaged in the business” often frustrated the prosecution of “unlicensed dealers masquerading as collectors or hobbyists but who are really trafficking firearms to felons or other prohibited persons.”³⁴ In April 2024, ATF issued a rule providing guidance on the new definition.³⁵

The ATF rule amends the regulatory definition of “dealer” to clarify that a person may be engaged in the business of dealing firearms through “such activities wherever, or through whatever medium, they are conducted, such as at a gun show or event, flea market, auction house, or gun range or club; at one’s home; by mail order; over the internet (e.g., online broker or auction); through the use of other electronic means (e.g., text messaging service, social media raffle, or website); or at any other domestic or international public or private marketplace or premises.”³⁶

A person is presumed to be “engaged in the business” of dealing in firearms if they:

• Resell or offer for resale firearms and demonstrate an ability and willingness to purchase and resell additional firearms;
• Repetitively purchase for resale or repetitively resell or offer for resale firearms through straw or sham businesses or individual straw purchasers or sellers; 
• Repetitively purchase for resale or repetitively resell or offer for resales firearms that cannot lawfully be purchased, received, or possessed under federal, state, local, or tribal law;
• Repetitively resell or offer for resale firearms within 30 days of purchasing;
• Repetitively resell or offer for resale firearms within one year of purchasing if the firearms are new or like new in their original packaging, or if they are the same make, model or variant;
• Are a former federal firearm licensee who resells or offers for resale firearms that were in their business inventory at the time their license was terminated; or
• Are a former federal firearm licensee who resells or offers for resale firearms transferred to their own personal collection prior to the termination of their license, unless the firearms were received and transferred without intent to evade the restrictions placed on licensees by federal law and one year has passed from the date of transfer to the former licensee’s personal collection.³⁷

A person is presumed to possess the intent to “predominantly earn a profit” if they:

• Repetitively or continuously advertise, market, or otherwise promote a firearms business regardless of whether they incur expenses or promote the business informally;
• Repetitively or continuously purchase, rent, or otherwise exchange something of value for a permanent or temporary physical space to display firearms offered for resale;
• Make and maintain records to document, track, or calculate profits and losses from firearms repetitively purchased for resale;
• Purchase or otherwise secure merchant services as a business through which they intend to repetitively accept payment for firearms;
• Formally or informally purchase, hire, or otherwise secure business security services to protect firearms assets and repetitive firearms transactions;
• Formally or informally establishes a business entity, trade name, or online business account through which they make or offer to make repetitive firearms transactions; or
• Secure or apply for a State or local business license to purchase for resale or to resell merchandise that includes firearms.³⁸

Dealer Duties and Prohibitions

Once licensed, federal law requires dealers to:

• Initiate background checks on unlicensed firearm purchasers.³⁹
• Maintain records of the acquisition and sale of firearms.⁴⁰
• Report multiple sales of handguns (i.e., the sale of two or more pistols or revolvers to an unlicensed person within any five consecutive business days).⁴¹
• If a licensed dealer in California, Arizona, New Mexico, or Texas, report the sale of two or more of certain semiautomatic rifles to an unlicensed person within any five consecutive business days.⁴²
• Report the theft or loss of a firearm within 48 hours after the theft or loss is discovered.⁴³

For more information about the background check and record-keeping requirements, see our summaries on Background Check Procedures and Maintaining Records of Gun Sales.

Dealers must also submit to a maximum of one ATF inspection per year to ensure compliance with federal recordkeeping requirements.⁴⁴ More frequent inspections are permitted if a federal magistrate has issued a search warrant or if the search is incidental to a criminal investigation.⁴⁵ In addition, dealers must respond to requests for information from ATF regarding the disposition of a firearm if such request is made during the course of a bona fide criminal investigation.⁴⁶

A licensed dealer may not sell or deliver:

• A handgun to a resident of another state.
• A handgun or handgun ammunition to a person the dealer knows or has reasonable cause to believe is under the age of 21.
• A shotgun or rifle or ammunition for that firearm to a person the dealer knows or has reasonable cause to believe is under the age of 18.⁴⁷

A dealer may sell a rifle or shotgun to a resident of a different state if the sale is conducted in person at the dealer’s place of business and the sale complies with all of the legal conditions for sale in both states.⁴⁸ A dealer may not deliver a handgun to a purchaser through the mail; however, a dealer may mail a handgun in the course of a customary trade shipment to a firearms manufacturer or other FFL.⁴⁹

Federal law does not require dealers to conduct business on commercial premises. According to a 1998 ATF random sample of dealers nationwide, 56% of all dealers operated out of their homes.⁵⁰ Of the remaining 44%, 25% operated out of commercial premises that were gun shops or sporting goods or hardware stores.⁵¹ The remainder were located in businesses that are not usually associated with gun sales, such as funeral homes or auto parts stores.⁵²

Dealers may temporarily conduct business at a location other than that specified on the dealer’s license if the temporary location is a gun show in the state specified on the license.⁵³

Summary of State Law

Twenty-seven states and the District of Columbia have adopted laws regulating firearms dealers, with additional states requiring dealers to conduct background checks, retain records of sales, or report sales to law enforcement. See our summaries on Background Check Procedures and Maintaining Records of Gun Sales for these additional laws.

Seventeen states and the District of Columbia require firearms dealers to obtain a license. The regulations cited below also apply.

* While Wisconsin does not require dealers to obtain licenses, the state requires handgun sellers to register with the Wisconsin Department of Justice (“DOJ”) each store he or she owns or operates.¹ DOJ provides the dealer with a unique dealer identification number for each store.

The other 22 states do not have any of these laws.

Dealer Licensing

For citations, please see the chart above.

Seventeen states and the District of Columbia generally require firearms dealers to obtain a state-issued license. The following states require dealers to obtain a state license to engage in the retail sale of any type of firearm:

• California
• Colorado
• Connecticut
• District of Columbia
• Hawaii
• Illinois
• Massachusetts
• New Jersey (dealer employees must also be licensed)
• Pennsylvania
• Rhode Island¹²⁴
• Washington

California appears to have the most comprehensive dealer licensing requirements in the nation. Under California law, a firearms “dealer” or “licensee” must have all of the following:

• A valid federal firearms license.
• Any regulatory or business license, or licenses, required by local government, or a letter from the duly constituted local licensing authority stating that the jurisdiction does not require any form of regulatory or business license and does not otherwise restrict or regulate the sale of firearms.
• A valid seller’s permit issued by the State Board of Equalization.
• A certificate of eligibility issued by the Department of Justice (showing that the person is not prohibited from possessing firearms).

The dealer also must be included in the centralized list of licensees maintained by the California Department of Justice.

Beginning July 1, 2026, every licensee and every employee who handles or processes the sale, loan, or transfer of firearms or ammunition must complete annual training on the laws governing sales of firearms and ammunition, how to recognize signs of illegal or fraudulent activity, indicators that an individual intends to use a firearm for self-harm, and how to respond to these situations, among other topics.¹²⁵

The following states require dealers to obtain a state license to engage in the retail sale of handguns or other specified firearms only:

• Alabama
• Delaware¹²⁶
• Indiana
• Maryland¹²⁷
• New Hampshire
• New York¹²⁸

In Wisconsin, before a dealer may offer a handgun for sale, the dealer must register each handgun store he or she owns or operates with the Wisconsin Department of Justice. The Department of Justice will provide the dealer with a unique identification number for each store.

Banning Residential Dealers

Massachusetts is the only state that prohibits dealers from operating in a residence or dwelling.

Employee Background Checks

For citations, please see the chart above.

Nine states require background checks on firearms dealer employees:

• California
• Colorado
• Connecticut
• Delaware
• Illinois¹²⁹
• Massachusetts
• New Jersey
• Virginia
• Washington

In Connecticut, however, employee background checks are only required where “the principal part of such trade or business is the retail sale of goods other than firearms.”

In Delaware, employee background checks must be conducted annually. In New Jersey, employees of retail firearms dealers must first obtain a state-issued license, which is valid for 3 years.

In California, any agent or employee who handles, sells, or delivers firearms in the course of a gun dealer’s business must obtain and provide to the dealer a certificate of eligibility (COE) from the state Department of Justice verifying that he or she has passed a background check and is eligible to handle and possess firearms. A dealer must prohibit any agent or employee who the dealer knows or reasonably should know is within a class of persons prohibited from possessing firearms from coming into contact with any firearm that is not secured. The city or county where the dealership is located may conduct additional background checks on dealers’ employees.

Security Measures

For citations, please see the chart above.

Ten states require firearms dealers to utilize security measures to reduce the risk of theft from their premises:

• California
• Colorado
• Connecticut
• Illinois
• Massachusetts
• Minnesota
• New Jersey
• New York
• Pennsylvania
• Rhode Island

In the District of Columbia, firearms dealers must keep all firearms and ammunition “in a securely locked place affixed to the premises except when being shown to a customer, being repaired, or otherwise being worked on.”

Licensed dealers in Illinois are required to develop and submit a plan for safe storage of firearms and ammunition to the Department of State Police, which may reject the plan as inadequate.¹³⁰  The safe storage plan must supplement security features including “adequate locks, exterior lighting, surveillance cameras, alarm systems, and other anti-theft measures and practices,” and comply with rules established by the Department of State Police.¹³¹

Videotaping

Ensuring that gun dealers’ business premises capture video and audio records from security cameras can provide an important check on illegal behavior and also provide law enforcement with evidence to solve certain gun crimes such as straw purchases and robberies. Laws requiring videotaping are popular with the public¹³² and Walmart, the nation’s largest gun seller, began voluntarily videotaping gun sales in 2008.

In 2021, Illinois became the first state in the nation to require licensed gun dealers operating retail locations¹³³ to videotape critical areas of the business including areas where guns are sold, handled and transferred, as well as any entrances or exits.¹³⁴ These video records must be retained for at least 90 days.¹³⁵ California adopted similar legislation in 2022; California’s law goes into effect on January 1, 2024, requiring all licensed gun dealers to install and maintain a fixed video surveillance system on their business premises to continuously record for 24 hours per day and record areas including interior views of all entries or exists, all areas where firearms are displayed, and all points of sale sufficient to identify the parties involved in the transaction.¹³⁶ The law requires dealers to maintain these security surveillance records for at least one year, annually certify to the Department of Justice that the video surveillance system is in proper working order, and post conspicuous signs at each entrance to the dealer’s premises notifying patrons that the premises are under video and audio surveillance.¹³⁷

In 2022, New York also enacted video recording security requirements for gun dealer premises and areas where gun transactions are conducted.¹³⁸

In the absence of state law, local governments can make videotaping gun sales a condition of licensure in some states; at least five localities in California localities already enacted these requirements before passage of California’s state law.

Warnings to Purchasers

For citations, please see the chart above.

Nineteen states require dealers to post and/or deliver written warnings to purchasers regarding the risks of storing firearms in a manner accessible to children:

• California
• Connecticut
• Florida
• Illinois
• Maine
• Massachusetts
• Michigan
• Minnesota
• Nebraska
• New Hampshire
• New Jersey
• New York
• North Carolina
• Ohio
• Oregon
• Texas
• Vermont
• Washington
• Wisconsin

Washington also requires dealers to deliver applicants for pistols and semiautomatic rifles a warning stating that the presence of a firearm in the home increases the risk of death by suicide, domestic violence, and unintentional shootings.¹³⁹

Theft or Loss Reporting

Three states specifically require dealers to report to state and/or local authorities the theft or loss of any firearm, while other states apply this requirement to firearm owners generally, as described in our summary on Reporting Lost and Stolen Firearms.

California requires firearms dealers to report theft or loss of any firearm or ammunition, and ammunition vendors to report the theft or loss of any ammunition, to the local law enforcement agency where the dealer is located within 48 hours.¹⁴⁰  Connecticut requires dealers to conduct an annual physical inventory reconciliation and report to law enforcement within 72 hours any firearm determined missing.¹⁴¹ Massachusetts requires dealers to report any theft or loss to the local licensing authority and to the state Criminal History Systems Board. New Jersey requires dealers to report the loss or theft of firearms or ammunition to the local police force or the state police within 36 hours.

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Strict Liability

Two states¹⁴² —Connecticut and Pennsylvania—as well as the District of Columbia, impose strict liability on firearms dealers under certain circumstances. In Connecticut, any person who sells, delivers or otherwise transfers a firearm to a person knowing that person is prohibited from possessing such firearm “shall be strictly liable for damages for the injury or death of another person resulting from the use of such firearm by any person.” Connecticut also provides that any person who sells, delivers or provides any firearm to another person to “engage in conduct which constitutes an offense knowing or under circumstances in which he should know that such other person intends to use such firearm in such conduct shall be criminally liable for such conduct and shall be prosecuted and punished as if he were the principal offender.”

Pennsylvania’s law is similar to Connecticut’s.

The District of Columbia provides that any firearms dealer who can be shown by a preponderance of the evidence to have knowingly and willfully engaged in the illegal sale of a firearm will be strictly liable in tort for all damages caused by the discharge of the firearm in the District, regardless of whether the person operating the firearm is the original, illegal purchaser. A strict liability action may not be brought, however:

• When the basis of the strict liability is a firearm originally distributed to a law enforcement agency or a law enforcement officer.
• By a person who can be shown by a preponderance of the evidence to have committed a self-inflicted injury or who was injured by a firearm while committing a crime, attempting to commit a crime, engaged in criminal activity, or engaged in a delinquent act.
• By a person who can be shown by a preponderance of the evidence to be engaged in the sale or distribution of illegal narcotics.
• By a person who either assumed the risk of the injury that occurred or negligently contributed to the injury that occurred.

Dealers of assault weapons or machine guns in the District will also, with certain exceptions, be held strictly liable in tort for all direct and consequential damages arising from bodily injury or death if the bodily injury or death proximately results from the discharge of the assault weapon or machine gun in the District.

Selected Local Law

San Francisco, California

The City of San Francisco has enacted several comprehensive ordinances to ensure that local firearms dealers utilize common sense and responsible business practices.¹⁴³ It is illegal to engage in the business of selling firearms or ammunition in the City without first obtaining a license from the San Francisco Police Department. In order to obtain a license, a potential firearms dealer must comply with a number of basic and important requirements including mandatory background checks for the dealer and the dealer’s employees, the installation of a minimum level of security measures to prevent theft, and proof of adequate liability insurance. In addition, dealers may not operate near sensitive public locations such as schools or day care centers. To discourage theft and trafficking, dealers must conduct bi-annual inventories of all firearms and immediately report any weapons which are either lost or stolen. People who are prohibited from possessing firearms are not allowed on the premises of a firearms dealer. Finally, information related to sales of ammunition must be recorded and stored by the dealer. To ensure that all requirements are being met, the San Francisco Police have the right to inspect a dealer’s premises at any time during business hours. Over 30 other local jurisdictions in California have enacted similar ordinances that comprehensively regulate gun dealers.

Model Law

The Law Center has drafted a Model Ordinance Regulating Firearms Dealers and Ammunition Sellers for Local Jurisdictions in California. In addition, the Law Center’s September 2011 publication, Model Laws for a Safer America: Seven Regulations to Promote Responsible Gun Ownership and Sales, includes a model law regulating firearms dealers. For more information about these model laws, please contact us. The experts at Giffords Law Center are  available to provide assistance to any jurisdiction seeking to tailor a model law to its particular needs.

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Key Legislative Elements

The features listed below are intended to provide a framework from which policy options may be considered. A jurisdiction considering new legislation should consult with counsel.

• All firearms dealers selling any class of firearm are required to obtain a state and/or local license and undergo a background check.
• Dealers in residential and other sensitive neighborhoods are prohibited.
• Dealer employees are required to undergo background checksand undergo training to identify and report suspected straw purchasers and gun traffickers.
• Dealers are required to take security precautions to reduce the risk of theft (security measures may include safe storage requirements, alarm systems, and limitations on the display of firearms).
• Dealers are required to report all firearm sales to state and local law enforcement.
• Dealers are required to provide law enforcement with a physical inventory of all firearms at least annually.¹⁴⁴
• Dealers are required to obtain liability insurance to ensure that persons harmed by the dealers’ actions will be adequately compensated.¹⁴⁵
• Dealers are required to post warnings to consumers regarding safe storage of firearms and the consequences of improperly storing firearms.
• Dealers are required to report the theft or loss of any firearm to state and local authorities.
• Dealers are subject to civil liability for negligent entrustment, negligence per se, and knowing violations of federal or state statutes applicable to the sale or marketing of the firearms.¹⁴⁶

1. Federal firearms licensee totals as of January, 2024 were published by ATF. “Federal Firearm Listings,” Bureau of Alcohol, Tobacco, Firearms and Explosives, last accessed September 24, 2024, http://www.atf.gov/about/foia/ffl-list.html.[↩]
2. Id.[↩]
3. “Postal Facts,” United States Postal Service, last accessed September 24, 2024, https://facts.usps.com/total-postal-managed-retail-offices/.[↩]
4. “Communities GROW with McDonald’s,” McDonald’s, last accessed September 24, 2024, https://www.mcdonalds.com/content/dam/sites/usa/nfl/documents/franchising/mcd-site-criteria-brochure.pdf.[↩]
5. Trent Steidley, et al., “Gun Shops as Local Institutions: Federal Firearms Licensees, Social Disorganization, and Neighborhood Violent Crime,” Social Forces 89, no. 1 (2017): 265-298.[↩]
6. Yanqing Xu, Samuel Owusu-Agyemang, “Gun-Related Crime in Detroit, Michigan: Exploring the Spatial Context of Licensed Firearm Availability and Neighborhood Characteristics,” Papers in Applied Geography 5, no. 1-2 (2019): 58-76.[↩]
7. Richard Stansfield, et al., “Public guns, private violence: The association of city-level firearm availability and intimate partner homicide in the United States,” Preventive Medicine 148, (2021): 106599.[↩]
8. “National Firearm Commerce and Trafficking Assessment (NFCTA): Firearms Trafficking Investigations – Volume Three – Part III,” Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives, April 2024, https://www.atf.gov/firearms/national-firearms-commerce-and-trafficking-assessment-nfcta-firearms-trafficking.[↩]
9. Erik J. Olson, et al., “American firearm homicides: The impact of your neighbors,” Journal of Trauma and Acute Care Surgery 86, no. 5 (2019): 797-802.[↩]
10. “National Firearm Commerce and Trafficking Assessment (NFCTA): Firearms Trafficking Investigations – Volume Two – Part III,” Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives, March 2024, https://www.atf.gov/firearms/national-firearms-commerce-and-trafficking-assessment-nfcta-crime-guns-volume-two.[↩]
11. “Federal Firearms Licensee Theft/Loss Report – 2023,” Bureau of Alcohol, Tobacco, Firearms and Explosives, last accessed September 24, 2024, https://www.atf.gov/resource-center/federal-firearms-licensee-theftloss-report-2023.[↩]
12. “National Firearm Commerce and Trafficking Assessment (NFCTA): Firearms Trafficking Investigations – Volume Three – Part III,” Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives, April 2024, https://www.atf.gov/firearms/docs/report/nfcta-volume-iii-part-iii/download.[↩]
13. Office of the Inspector General, Evaluation and Inspections Division, U.S. Department of Justice, Inspection of Firearms Dealers by the Bureau of Alcohol, Tobacco, Firearms and Explosives (July 2004): i, http://www.justice.gov/oig/reports/ATF/e0405/final.pdf; Office of the Inspector General, Evaluation and Inspections Division, U.S. Department of Justice, Review of ATF’s Federal Firearms Licensee Inspection Program (Apr. 2013): ii, http://www.justice.gov/oig/reports/2013/e1305.pdf.[↩]
14. “Fact Sheet – Facts and Figures for Fiscal Year 2022,” Bureau of Alcohol, Tobacco, Firearms and Explosives, January 2023, https://www.atf.gov/resource-center/fact-sheet/fact-sheet-facts-and-figures-fiscal-year-2022.[↩]
15. Based on calculations made by Giffords Law Center. “Firearm Compliance Inspection Results,” Bureau of Alcohol, Tobacco, Firearms and Explosives, last accessed September 24, 2024, https://www.atf.gov/firearms/firearms-compliance-inspection-results.[↩]
16. “Audit of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Risk-Based Inspection Selection Processes and Administrative Actions Issued to Federal Firearms Licensees,” Department of Justice, Office of the Inspector General, April 2023, https://oig.justice.gov/sites/default/files/reports/23-062_0.pdf. [↩]
17. Id.[↩]
18. Id.[↩]
19. Daniel W. Webster, et al., “Effects of a Gun Dealer’s Change in Sales Practices on the Supply of Guns to Criminals,” Journal of Urban Health 83, (2006): 778-787.[↩]
20. Nathan Irvin, et al., “Evaluating the Effect of State Regulation of Federally Licensed Firearm Dealers on Firearm Homicide,” American Journal of Public Health 104, no. 8 (2014): 1384-1386.[↩]
21. Daniel W. Webster, et al., “Effects of a State-Level Firearm Seller Accountability Policies on Firearm Trafficking,” Journal of Urban Health 86, no. 4 (2009): 525-537. See also, Glenn L. Pierce, et al., “Impact of California firearm sales laws and dealer regulations on the illegal diversion of guns,” Injury Prevention 21, (2015): 179-184; Daniel Webster, et al., “Relationship between licensing, registration, and other gun sales laws and the source state of crime guns,” Injury Prevention 7, no. 3 (2001): 184-189.[↩]
22.  Richard Stansfield, et al., “Licensed firearm dealers, legal compliance, and local homicide: A case study,” Criminology & Public Policy 22, no. 2 (2023): 323-345.[↩]
23. 18 U.S.C. § 922(a)(1)(A).[↩]
24. 18 U.S.C. § 921(a)(21)(C).[↩]
25. Id.[↩]
26. 18 U.S.C. § 922.[↩]
27. Under the 1968 requirements, any person who was over 21, paid a $10 annual fee, had premises from which to operate, and was not prohibited from possessing firearms was issued a license. Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Commerce in Firearms in the United States (Feb. 2000), 11.[↩]
28. Id.[↩]
29. Id. at 13.[↩]
30. 18 U.S.C. § 923(a)(3)(B). The law also required for the first time that dealers conduct background checks on all gun purchasers.[↩]
31. 18 U.S.C. § 923(d)(1)(F)(iii).[↩]
32. 27 C.F.R. § 478.44(a)(1)(ii); 18 U.S.C. § 923(d)(1)(F)(i), (ii).[↩]
33. Pub. L. No. 117-159, 136 Stat. 1313, 1324-25 (2022) (codified at 18 U.S.C. § 921(a)(21)(C) ).[↩]
34. U.S. Department of Justice & Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Gun Shows: Brady Checks and Crime Gun Traces (Jan. 1999): 13-14, http://www.atf.gov/files/publications/download/treas/treas-gun-shows-brady-checks-and-crime-gun-traces.pdf.[↩]
35. Definition of “Engaged in the Business” as a Dealer in Firearms, 89 Fed. Reg. 28,968 (Apr. 19, 2024) (codified at 27 C.F.R. pt. 478). The rule also clarifies what constitutes a “personal collection,” since a person who resells all or part of their personal collection of firearms is not considered to be engaged in the business. A personal collection is “[p]ersonal firearms that a person accumulates for study, comparison, exhibition (e.g., collecting curios or relics, or collecting unique firearms to exhibit at gun club events), or for a hobby (e.g., noncommercial, recreational activities for personal enjoyment, such as hunting, skeet, target, or competition shooting, historical re-enactment, or noncommercial firearms safety instruction).”[↩]
36. Definition of “Engaged in the Business” as a Dealer in Firearms, 89 Fed. Reg. at 29,090 (codified at 27 C.F.R. § 478.11).[↩]
37. Definition of “Engaged in the Business” as a Dealer in Firearms, 89 Fed. Reg. at 29,091 (codified at 27 C.F.R. § 478.13).[↩]
38. Definition of “Engaged in the Business” as a Dealer in Firearms, 89 Fed. Reg. at 29,091 (codified at 27 C.F.R. § 478.13).[↩]
39. The dealer must: (a) receive from the transferee a completed and signed Firearms Transaction Record (ATF Form 4473), providing detailed information about the transferee; (b) verify the identity of the transferee through a government-issued photo identification; and (c) contact the National Instant Criminal Background Check System (NICS), through either the FBI or a state point of contact, for a determination of whether the transfer may proceed. 27 C.F.R. §§ 478.11, 478.102, 478.124; 18 U.S.C. § 922(t)(1). The dealer may transfer the firearm if NICS provides the dealer with a unique identification number for the transfer or (1) if three business days have elapsed since the dealer contacted NICS and the system has not notified the dealer that the transfer would be unlawful or, (2) in the case of a person under age 21 attempting to purchase a long gun, (A) if three business days have elapsed since the dealer contacted NICS and the system has not notified the dealer that further investigation is necessary to review a potentially disqualifying record or, (B) where a potentially disqualifying records exists, 10 business days have elapsed since the dealer contacted NICS and the system has not notified the dealer that the transfer would be unlawful. 18 U.S.C. § 922(t)(1).[↩]
40. 18 U.S.C. § 923(g)(1)(A). The dealer must record, “in bound form,” the purchase or other acquisition of a firearm not later than the close of the next business day following the purchase or acquisition. 27 C.F.R. § 478.125(e). The dealer must similarly record the sale or other disposition of a firearm not later than seven days following the date of such transaction and retain the Firearms Transaction Record (ATF Form 4473) obtained in the course of transferring custody of each firearm. Id.; § 478.124(b). When a firearms business is discontinued, these records must be delivered to the successor or, if none exists, to the Attorney General. 18 U.S.C. § 923(g)(4).[↩]
41. 18 U.S.C. § 923(g)(3)(A).[↩]
42. In July 2011, the Department of Justice sent demand letters to dealers operating in California, Texas, Arizona, and New Mexico requiring these dealers to report the sale of two or more of certain semiautomatic rifles within a five business day period to the same buyer to help deter gun trafficking to Mexico. See ATF Form 3310.12, Report of Multiple Sale or Other Disposition of Certain Rifles, http://www.atf.gov/files/forms/download/atf-f-3310-12.pdf; Bureau of Alcohol, Tobacco, Firearms & Explosives, U.S. Department of Justice, Q&As for the Report of Multiple Sale or Other Disposition of Certain Rifles, http://www.atf.gov/files/firearms/industry/080911-qa-multiple-rifles.pdf.[↩]
43. The report must be made to the Attorney General and to the “appropriate local authorities.” 18 U.S.C. § 923(g)(6).[↩]
44. 18 U.S.C. § 923(g)(1)(B). ATF actually inspects dealers very rarely. A Washington Post investigation in 2010 found that, as a result of inadequate staffing, ATF was able to inspect less than 10% of FFLs in 2009 and, on average, dealers are inspected only once a decade. Sari Horwitz and James V. Grimaldi, “ATF’s Oversight Limited in Face of Gun Lobby,” Wash. Post, Oct. 26, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/10/25/AR2010102505823.html?sub=AR.[↩]
45. 18 U.S.C. § 923(g)(1)(A), (B).[↩]
46. 18 U.S.C. § 923(g)(7).[↩]
47. 18 U.S.C. § 922(b)(1), (3).[↩]
48. 18 U.S.C. § 922(b)(3).[↩]
49. 18 USCS § 1715.[↩]
50. Commerce in Firearms in the United States, supra note 4, at 16.[↩]
51. Id.[↩]
52. Id.[↩]
53. 18 U.S.C. § 923(j).[↩]
54. Ala. Code §§ 13A-11-78, 13A-11-79, 13A-11-83.[↩]
55. Cal. Penal Code §§ 26500, 26700-26710.[↩]
56. Cal. Penal Code § 26915.[↩]
57. Cal. Penal Code § 26820, 26890(a).[↩]
58. Cal. Penal Code §§ 26835, 23640.[↩]
59. Cal. Penal Code § 26885.[↩]
60. Colo. Rev. Stat. § 18-12,401, 18-12-401.5.[↩]
61. Colo. Rev. Stat. § 18-12-407.[↩]
62. Colo. Rev. Stat. § 18-12-406.[↩]
63. Conn. Gen. Stat. § 29-28.[↩]
64. Conn. Gen. Stat. § 29-37f.[↩]
65. Conn. Gen. Stat. § 29-37d.[↩]
66. Conn. Gen. Stat. § 29-37b.[↩]
67. Conn. Gen. Stat. § 53-202g(a).[↩]
68. Conn. Gen. Stat. §§ 52-571f, 53a-8(b).[↩]
69. Del. Code Ann. tit. 24, §§ 901-902.[↩]
70. Del. Code Ann. tit. 24, § 904(b).[↩]
71. D.C. Code Ann. § 7-2504.01(b); D.C. Mun. Regs. tit. 24, § 2321.[↩]
72. D.C. Code Ann. § 7-2504.07.[↩]
73. D.C. Code Ann. §§ 7-2531.02, 7-2531.03, 7-2551.02, 7-2551.03.[↩]
74. Fla. Stat. Ann. § 790.175.[↩]
75. Haw. Rev. Stat. Ann. § 134-31.[↩]
76. 430 Ill. Comp. Stat. Ann. 68/5-15.[↩]
77. 430 Ill. Comp. Stat. Ann. 68/5-40.[↩]
78. 430 Ill. Comp. Stat. Ann. 68/5-50, 68/5-55.[↩]
79. 430 Ill. Comp. Stat. Ann. 68/5-20.[↩]
80. 720 Ill. Comp. Stat. 5/24-4.1(a).[↩]
81. Ind. Code Ann. §§ 35-47-2-14 – 35-47-2-16.[↩]
82. Me. Rev. Stat. Ann tit. 15, § 455-A.[↩]
83. Md. Code Ann., Pub. Safety §§ 5-101, 5-106.[↩]
84. Md. Code Ann., Pub. Safety § 5-110(a)(4).[↩]
85. Md. Code Ann., Pub. Safety § 5-145.1.[↩]
86. Mass. Gen. Laws ch. 140, §§ 122, 122B, 123, 128.[↩]
87. Mass. Gen. Laws ch. 140, § 123.[↩]
88. Mass. Gen. Laws ch. 6, § 172M.[↩]
89. Mass. Gen. Laws ch. 140, § 123.[↩]
90. Mass. Gen. Laws ch. 140, § 123.[↩]
91. Mass. Gen. Laws ch. 140 §§ 123, 129C.[↩]
92. Mich. Comp. Laws § 28.435(6).[↩]
93. Minn. Stat. § 624.7161; Minn. Admin. Rules Ch. 7504.[↩]
94. Minn. Stat. § 624.7162.[↩]
95. Neb. Rev. Stat. Ann. § 69-2426.[↩]
96. N.H. Rev. Stat. Ann. §§ 159:8, 159:10.[↩]
97. N.H. Rev. Stat. Ann. § 650-C:1(VII).[↩]
98. N.J. Stat. Ann. § 2C:58-2(a); N.J. Admin. Code § 13:54-3.2.[↩]
99. N.J. Stat. Ann. § 2C:58-2(a).[↩]
100. N.J. Stat. Ann. § 2C:58-2(a), N.J. Admin. Code §§ 13:54-3.11, 13:54-6.1-13:54-6.5.[↩]
101. N.J. Stat. Ann. §§ 2C:58-16, 2C:58-17.[↩]
102. N.J. Admin. Code § 13:54-6.6.[↩]
103. N.Y. Penal Law §§ 265.00(9), 400.00.[↩]
104. N.Y. Gen. Bus. Law § 875-b.[↩]
105. N.Y. Gen. Bus. Law § 396-ee.[↩]
106. N.C. Gen. Stat. §§ 14-315.1, 14-315.2.[↩]
107. Ohio Rev. Code Ann. §§ 2923.25, 5502.63(A).[↩]
108. 2021 SB 554.[↩]
109. 18 Pa. Cons. Stat. § 6112.[↩]
110. 18 Pa. Cons. Stat. Ann. § 6113.[↩]
111. 18 Pa. Cons. Stat. §§ 6111(g)(5), (6).[↩]
112. R.I. Gen. Laws §§ 11-47-38, 11-47-39.[↩]
113. R.I. Gen. Laws § 11-47-40(b).[↩]
114. Tex. Penal Code Ann. § 46.13(g).[↩]
115. Vt. Stat. Ann. tit. 13, § 4024(b).[↩]
116. Va. Code Ann. § 18.2-308.2:3.[↩]
117. Wash. Rev. Code Ann. § 9.41.110.[↩]
118. Wash. Rev. Code Ann. § 9.41.110(5)(b).[↩]
119. 2024 WA HB 2118, amending Wash Rev. Code Ann. § 9.41.110. Effective July 1, 2025. WA HB 2118 will require dealers to adopt security feature, alarm systems, firearm storage practices, surveillance systems, and record keeping practices. [↩]
120. Rev. Code Wash. (ARCW) § 9.41.090(6)(b).[↩]
121. 2024 WA HB 2118, amending Wash Rev. Code Ann. § 9.41.110. Effective July 1, 2025. [↩]
122. Wis. Admin. Code Jus § 10.04.[↩]
123. Wis. Stat. § 175.37.[↩]
124. Note that R.I. Gen. Laws § 11-47-38 requires all firearms dealers to be licensed. However, state law provides a mechanism for the licensing of dealers in handguns only.[↩]
125. Cal Penal Code § 26920.[↩]
126. A license is required for a dealer sales of pistols, revolvers or “other deadly weapons made especially for the defense of one’s person”.[↩]
127. A license is required for dealer sales of “regulated firearms,” defined as handguns and certain listed assault weapons.[↩]
128. A license is required for dealer sales of handguns, assault weapons and large capacity ammunition feeding devices.[↩]
129. Illinois requires all dealers seeking to obtain or renew a “certificate of license” to sell firearms in the state to submit an affidavit to the Department of State Police stating that each owner, employee, or agent of the licensee who sells or conducts transfers of firearms is at least 21 years old and has a currently valid FOID Card, which is issued pursuant to a background check.  430 Ill. Comp. Stat. Ann. 68/5-40.   The affidavit must also contain the name and FOID Card number of each owner, employee, or agent who sells or conducts transfers of firearms for the licensee, and if an owner, employee, or agent is not otherwise a resident of Illinois, the licensee must submit an affidavit stating that the owner, employee, or agent has undergone a background check and is not prohibited from owning or possessing firearms. Id. at 68/5-40(a).The licensee must also submit this affidavit within 30 days when a new owner, employee, or other agent begins selling or conducting transfers of firearms for the licensee. Id. at 68/5-40(b).[↩]
130. 430 Ill. Comp. Stat. Ann. 68/5-55.[↩]
131. Id.[↩]
132. Greenberg Quinlan Rosner Research & the Tarrance Group for the Mayors Against Illegal Guns, Americans Support Common Sense Measures to Cut Down on Illegal Guns 3, 6 (Apr. 10, 2008), http://www.mayorsagainstillegalguns.org/downloads/pdf/polling_memo.pdf.[↩]
133. A “retail location” is “a store open to the public from which a certified licensee engages in the business of selling, transferring, or facilitating a sale or transfer of a firearm[,]” but does not include events like gun shows where a licensee engages in business “from time to time.” 430 Ill. Comp. Stat. Ann. 68/5-5.[↩]
134. 430 Ill. Comp. Stat. Ann. 68/5-50.[↩]
135. 430 Ill. Comp. Stat. Ann. 68/5-80.[↩]
136. See 2022 CA SB 1384 (adding Cal. Penal Code §§ 26806).[↩]
137. Id.[↩]
138. N.Y. Gen. Bus. Law § 875-b.[↩]
139. Rev. Code Wash. (ARCW) § 9.41.090(6)(b).[↩]
140. Cal. Penal Code §§ 26885, 30363.[↩]
141. P.A. No. 23-53 § 8(b); Conn. Gen. Stat. § 53-202g(a).[↩]
142. In 2005, Congress passed and the President signed into law the Protection of Lawful Commerce in Arms Act (PLCAA). This law grants firearms dealers and others immunity from some civil lawsuits. 15 U.S.C. §§ 7901 – 7903. The Act includes, inter alia, the following exceptions:
     • (ii) an action brought against a seller for negligent entrustment or negligence per se;
     • (iii) an action in which a manufacturer or seller of a [firearm] knowingly violated a State or Federal statute applicable to the sale or marketing of the [firearm], and the violation was a proximate cause of the harm for which relief is sought, including:
       • (I) any case in which the manufacturer or seller knowingly made any false entry in, or failed to make appropriate entry in, any record required to be kept under Federal or State law with respect to the firearm or aided, abetted, or conspired with any person in making any false or fictitious oral or written statement with respect to any fact material to the lawfulness of the sale or other disposition of a [firearm]; or
       • (II) any case in which the manufacturer or seller aided, abetted, or conspired with any other person to sell or otherwise dispose of a [firearm], knowing, or having reasonable cause to believe, that the actual buyer of the [firearm] was prohibited from possessing or receiving a firearm or ammunition under subsection (g) or (n) of section 922 of title 18, United States Code[.]
         15 U.S.C. § 7903(5)(A)(ii), (iii). The scope of the PLCAA and its exceptions is being tested in the courts in several pending cases.

     [↩]

143. San Francisco Police Code §§ 613-619.[↩]
144. 2023 Conn. P.A. No. 23-53 § 8(b). Certain local jurisdictions, such as New York City and San Francisco, impose this requirement.[↩]
145. Certain local jurisdictions, such as Los Angeles and San Francisco, impose this requirement.[↩]
146. New York City and San Francisco impose civil liability on dealers and others for some gun injuries and deaths. Civil liability laws require careful drafting in light of the 2005 Protection of Lawful Commerce in Arms Act (PLCAA).[↩]