Increased oversight of gun dealers is critical to prevent irresponsible and dangerous transfers of firearms.
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.
Firearms initially enter the consumer market through gun dealers, who are the critical link between manufacturers or distributors and the general public.1 Even though all guns that are sold to the public, including guns that end up recovered in crimes, originate with dealers, dealers are subject to very little federal oversight.
Over 52,900 individuals currently have “Type 1” federal firearms licenses, which allow them to act as firearms dealers, and over 7,000 individuals have “Type 2” licenses, which allow them to buy and sell guns as pawnbrokers.2 About 74,251 individuals have other types of federal firearms licenses.3 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.
Gun Dealers and Trafficking
Oversight of dealers is critical because gun dealers represent a major source of illegally trafficked firearms. One report by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) analyzed 1,530 trafficking investigations conducted between July 1996 and December 1998 and found that dealers and pawnbrokers were associated with over 40,000 trafficked guns.4 The report concluded that these groups’ “access to large numbers of firearms makes them a particular threat to public safety when they fail to comply with the law.”5
Almost 70% of the guns recovered by law enforcement in Mexico between 2007 and 2011 and traced by ATF originated in the United States.6 According to one report, US law enforcement officials “believe U.S. gun shops are a logical option for illegal trafficking because these shops have large quantities of firearms and ammunition.”7 Given dealers’ access to large volumes of weaponry, “their potential collusion with firearms traffickers poses an enormous risk.”8 The weak penalties dealers can face for violating laws, and the infrequency with which dealers’ licenses are revoked, also both limit the effectiveness of US anti-trafficking efforts.9
Despite the need for strong dealer oversight, ATF faces numerous obstacles that enable 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.10
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.
A 2004 report by the US Department of Justice’s Office of the Inspector General (OIG) found that ATF’s program for inspecting federal firearm licensees (FFLs), including gun dealers, importers, manufacturers, collectors, and pawnbrokers, was “not fully effective for ensuring that FFLs comply with federal firearms laws because inspections are infrequent and of inconsistent quality, and follow-up inspections and adverse actions have been sporadic.”11 While a 2013 follow-up report by OIG found that ATF had made some improvements in its inspection program, over 58% of FFLs had not been inspected within the past five years due, in part, to a lack of resources.12 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.13
Although only 52% of FFLs inspected in 2019 were found to be in compliance with federal gun laws,14ATF rarely revokes dealers’ licenses. In 2019, ATF took administrative action against over 4,500 FFLs, but only revoked or denied the renewal of 43 licenses (0.33% of those inspected).15 A 2010 Washington Post report found that, “Criminal prosecutions of corrupt dealers are even more rare [than license revocations], about 15 in a typical year.”16
Even when ATF seeks to revoke noncompliant dealers’ licenses, the administrative process it must pursue can be subject to lengthy delays. The OIG’s 2013 report found that some license revocation actions took over two years to complete.17 In addition, because dealers are able to legally continue selling firearms during the revocation process, lengthy delays increase the likelihood that rogue dealers will continue to violate federal laws as they conduct their business operations.
The Importance of Regulation
FFLs must be monitored to ensure that firearms are not stolen or trafficked. The OIG report found that, between 2004 and 2011, FFLs reported 174,679 firearms missing from their inventories.18 Missing guns pose a serious risk to public safety because they may end up in criminal hands and cannot be traced to the initial purchaser19. Even one stolen gun can destroy many lives – one gun stolen from an FFL in Chicago was used to shoot 24 individuals – two fatally – in 27 separate shootings over the course of less than two years.20
A September 2010 report by Mayors Against Illegal Guns concluded that routine inspections of gun dealers provide law enforcement with more opportunities to “detect potential indications of illegal gun activity, including improper recordkeeping or a dealer whose gun inventory does not match their sales records.”21 The report presented data showing that states that do not permit or require inspections of gun dealers are the sources of crime guns recovered in other states at a rate that is 50% greater than states that do permit or require such inspections.
Similarly, a 2009 study found that cities in states that comprehensively regulate retail firearms dealers and cities where these businesses undergo regular compliance inspections have significantly lower levels of gun trafficking than other cities.22 The International Association of Chiefs of Police recommends that state and local governments enact their own dealer licensing requirements because they can respond to specific community concerns, and because state and local oversight of licensees helps reduce the number of corrupt dealers.23
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Public Support for Regulation
The American public overwhelmingly supports the regulation of firearms dealers. According to a January 2013 poll, 85% of those surveyed (including 79% of all gun owners and 64% of NRA members) support allowing ATF to temporarily take away a gun dealer’s license if an audit reveals record-keeping violations and the dealer cannot account for 20 or more guns.24
According to the same poll, 69% of respondents favored giving the police and the public access to information about which gun dealers sell the most crime guns so those gun dealers can be subject to greater oversight.25 In addition, 73% of respondents (including 63% of all gun owners) supported allowing cities to sue licensed gun dealers when there is strong evidence that the gun dealer’s careless sales practices allowed many criminals to obtain guns.26
Moreover, a nationwide poll conducted in March and April 2008 found that:
- 86% of Americans favor requiring gun retailers to inspect their inventories every year to report stolen or missing guns.
- 88% of Americans favor requiring gun stores to keep all guns locked securely to prevent theft.
- 74 % of Americans favor requiring gun retailers to videotape all gun sales.27
That poll also found that 91% of Americans favor requiring gun stores to perform background checks on employees. Similarly, a May 2012 poll found that 79% of NRA members and 80% of non-NRA gun owners support requiring gun retailers to perform employee background checks—a measure also endorsed by the National Shooting Sports Foundation, the trade association for the firearms industry.28 In another poll, NRA members (90%) and non-NRA member gun owners (93%) also agreed that “irresponsible gun dealers who break the law by knowingly selling guns to unqualified purchasers should be held accountable to the maximum extent of the law.”29
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.30 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.”31
By contrast, a so-called “private seller” (one who is not “engaged in the business”) is exempt from federal licensing requirements.32 Additional information about unlicensed sellers is contained in our summary on Universal Background Checks.
According to a report issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the federal definition of “engaged in the business” often frustrates the prosecution of “unlicensed dealers masquerading as collectors or hobbyists but who are really trafficking firearms to felons or other prohibited persons.”33
The Gun Control Act of 196834 established the federal licensing system for firearms manufacturers, importers, pawnbrokers, collectors, and dealers, but the requirements imposed were weak.35 In 1992, more than 284,000 people had federal firearms licenses;36 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.37
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.38 That law also required applicants to certify that they had informed local law enforcement of their intent to apply for a license.39 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.40
Dealer Duties and Prohibitions
Once licensed, federal law requires dealers to:
- Initiate background checks on unlicensed firearm purchasers.41
- Maintain records of the acquisition and sale of firearms.42
- 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).43
- 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.44
- Report the theft or loss of a firearm within 48 hours after the theft or loss is discovered.45
Dealers must also submit to a maximum of one ATF inspection per year to ensure compliance with federal recordkeeping requirements.46 More frequent inspections are permitted if a federal magistrate has issued a search warrant or if the search is incidental to a criminal investigation.47 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.48
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 18.49
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.50 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.51
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.52 Of the remaining 44%, 25% operated out of commercial premises that were gun shops or sporting goods or hardware stores.53 The remainder were located in businesses that are not usually associated with gun sales, such as funeral homes or auto parts stores.54
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.55
Summary of State Law
Twenty-six 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.
Sixteen states and the District of Columbia require firearms dealers to obtain a license. The regulations cited below also apply.
State Gun Dealer Regulations
|State||State License Requirement||Ban on Residential Dealers||Employee Background Checks||Security Measures||Warnings to Purchasers||Theft or Loss Reporting|
|District of Columbia||Yes69||Yes70|
|Minnesota||Yes 91||Yes 92|
|New Hampshire||Yes 94||Yes 95|
|New Jersey||Yes 96||Yes 97||Yes 98||Yes 99||Yes 100|
|New York||Yes 101||Yes102||Yes 103|
|North Carolina||Yes 104|
|Pennsylvania||Yes 107||Yes 108|
|Rhode Island||Yes 110||Yes 111|
|Washington||Yes 115||Yes 116||Yes 117|
|Wisconsin||Yes* 118||Yes 119|
* 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 23 states do not have any of these laws.
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:
- District of Columbia
- New Jersey (dealer employees must also be licensed)
- Rhode Island120
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.
The following states require dealers to obtain a state license to engage in the retail sale of handguns or other specified firearms only:
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.
Eight states require background checks on firearms dealer employees:
- New Jersey
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.
For citations, please see the chart above.
Nine states require firearms dealers to utilize security measures to reduce the risk of theft from their premises:
- New Jersey
- New York
- Rhode Island
Garen J. Wintemute, “Frequency of and Responses to Illegal Activity Related to Commerce in Firearms: findings from the Firearms Licensee Survey,” Injury Prevention 19, no. 6 (2013): 412–420; Garen J. Wintemute, “Firearms Licensee Characteristics Associated with Sales of Crime–involved Firearms and Denied Sales: Findings from the Firearms Licensee Survey,” RSF: The Russell Sage Foundation Journal of the Social Sciences 3, no. 5 (2017): 58–74
Dealers in the following states may not display firearms, ammunition and/or advertising so that they can readily be seen from the outside by the public—California, and Rhode Island (handguns, imitation handguns and handgun advertising), Massachusetts (firearms), New Jersey (firearms and imitation firearms), and Pennsylvania (handguns or short-barreled rifles or shotguns).
In California, Minnesota, and New York dealers must store firearms in a specified manner after business hours. In Connecticut and Illinois, businesses that sell firearms at retail must have burglar alarms that are connected directly to the local police department. New Jersey and New York dealers must install a state-approved theft detection and prevention system and implement security and safe storage measures. Minnesota and New York also requires all firearms dealers to install electronic security systems that meet state specifications.
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.125 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.126
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 public127 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 locations128 to videotape critical areas of the business including areas where guns are sold, handled and transferred, as well as any entrances or exits.129 These video records must be retained for at least 90 days.130 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.131 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.132
In 2022, New York also enacted video recording security requirements for gun dealer premises and areas where gun transactions are conducted.133
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:
- New Hampshire
- New Jersey
- New York
- North Carolina
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.134
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.135 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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Two states136 —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.137 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.
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 checks.
- 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.138
- Dealers are required to obtain liability insurance to ensure that persons harmed by the dealers’ actions will be adequately compensated.139
- 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.140
- As discussed in the federal law section below, private sellers are allowed to sell guns without obtaining a license or conducting background checks due to the limited definition of “engaged in the business” under federal law. See 18 U.S.C. § 921(a)(21)(C).
- Federal firearms licensee totals as of Aug. 11, 2021 were published by ATF at http://www.atf.gov/about/foia/ffl-list.html. In addition to over 52,900 dealer licensees, and over 7,000 pawnbrokers, about 53,277 individuals are licensed as firearms collectors, and 18,515 are licensed as manufacturers of firearms or ammunition. Just over 1,500 individuals are licensed as importers of firearms.
- Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Following the Gun: Enforcing Federal Laws Against Firearms Traffickers 13 (June 2000), http://everytown.org/wp-content/uploads/2014/08/Following-the-Gun_Enforcing-Federal-Laws-Against-Firearms-Traffickers.pdf.
- Id. at x. According to an ATF review of guns found at crime scenes and traced to dealers in 1998, one percent of dealers were responsible for selling almost 60% of the traced firearms.Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Commerce in Firearms in the United States 23 (Feb. 2000), http://everytown.org/wp-content/uploads/2014/04/AccessDenied.pdf.
- “Mexico Trace Data”, Bureau of Alcohol, Tobacco, Firearms & Explosives, U.S. Department of Justice (2012), https://web.archive.org/web/20120510115722/https://www.atf.gov/statistics/download/trace-data/international/2007-2011-Mexico-trace-data.pdf.
- Colby Goodman & Michel Marizco, U.S. Firearms Trafficking to Mexico: New Data and Insights Illuminate Key Trends and Challenges, in Shared Responsibility: U.S.-Mexico Policy Options for Confronting Organized Crime, ed. Eric L. Olson, David A. Shirk & Andrew Selee (2010): 192-93, http://www.wilsoncenter.org/sites/default/files/Shared%20Responsibility%2012.22.10.pdf.
- Id. at 193.
- Id. a 198.
- Brady Center to Prevent Gun Violence, Shady Dealings, Illegal Gun Trafficking From Licensed Gun Dealers (Jan. 2007): 24-25, http://bradycampaign.org/sites/default/files/FINAL%20Shady%20Dealings.pdf. In August 1994, the American Bar Association enacted a resolution expressing support for legislation to increase the number of permitted yearly inspections of firearms dealers and require federally licensed dealers to: (1) maintain adequate business liability insurance; (2) pay annual fees to cover the costs of investigating license applications; and (3) require all employees to undergo background checks. American Bar Association, Item 10E, Annual Meeting 1994, http://www.americanbar.org/groups/criminal_justice/policy/index_aba_criminal_justice_policies_by_meeting.html#am9410e.
- The report continued: “Specifically, the ATF does not conduct in-person inspections on all applicants before licensing them to sell guns, and ATF compliance inspections of active dealers, including large-scale retailers, are infrequent and vary in quality. Even when numerous or serious violations were found, the ATF did not uniformly take adverse actions, refer FFLs for investigation, or conduct timely follow-up inspections.” 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. According to the 2013 report, “ATF field divisions told ATF headquarters in 2012 that they were still understaffed by 45% and that they needed 504 more investigators to conduct all inspections due that year.” Id. at 22.
- 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.
- ATF, Firearms Compliance Inspections FY 2019 (Last reviewed Dec. 1, 2020), https://www.atf.gov/firearms/compliance-inspections.
- David S. Fallis, “Virginia Gun Dealers: Small Number Supply Most Guns Tied to Crimes,” Wash. Post, October 25, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/10/24/AR2010102402221.html. One study found that between 1975 and 2005, ATF revoked, on average, fewer than 20 federal firearms licenses per year. Brady Center to Prevent Gun Violence, Shady Dealings, Illegal Gun Trafficking From Licensed Gun Dealers (January 2007), 23. The report notes that in 2006, ATF increased its total revocations to 131. Id. at 23. ATF prosecuted only 88 corrupt gun dealers between 2000 and 2002. Americans for Gun Safety Foundation, The Enforcement Gap: Federal Gun Laws Ignored (May 2003): 4, http://content.thirdway.org/publications/10/AGS_Report_-_The_Enforcement_Gap_-_Federal_Gun_Laws_Ignored.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): 31, https://oig.justice.gov/reports/2013/e1305.pdf.
- Id. at 2.
- Center for American Progress, Lost and Stolen Guns from Gun Dealers (June 2013), http://www.americanprogress.org/wp-content/uploads/2013/06/GerneyInventoryBrief-1.pdf.
- Jeremy Gorner, et al., “A gun was stolen from a small shop in Wisconsin. Officials have linked it to 27 shootings in Chicago,” Chicago Tribune, Sept. 21, 2021, https://www.chicagotribune.com/news/criminal-justice/ct-stolen-gun-multiple-crimes-chicago-20210921-aiqhedigtnhrbnikogk26vgdcu-story.html.
- Mayors Against Illegal Guns, Trace the Guns: The Link Between Gun Laws and Interstate Gun Trafficking (Sept. 2010): 26-27, http://www.tracetheguns.org/report.pdf.
- Daniel W. Webster et al., “Effects of State-Level Firearm Seller Accountability Policies on Firearms Trafficking,” 86 J. Urban Health (July 2009): 525. Another study found that in major cities, “gun homicide rates were higher where FFLs were more prevalent,” concluding that “[m]odification of FFLs through federal, state, and local regulation may be a feasible intervention to reduce gun homicide in major cities.” Douglas J. Wiebe et al., “Homicide and Geographic Access to Gun Dealers in the United States,” 9 BMC Public Health (June 23, 2009): 199, http://www.biomedcentral.com/content/pdf/1471-2458-9-199.pdf.
- Int’l Ass’n of Chiefs of Police (IACP), Taking a Stand: Reducing Gun Violence in Our Communities (2007): 14, https://www.theiacp.org/resources/taking-a-stand-reducing-gun-violence-in-our-communities.
- Colleen L. Barry et al., “After Newtown —Public Opinion on Gun Policy and Mental Illness,” 368 New Eng. J. Med. (Mar. 21, 2013): 1077, 1079, http://www.nejm.org/doi/pdf/10.1056/NEJMp1300512.
- Greenberg Quinlan Rosner Research & The Tarrance Group for Mayors Against Illegal Guns, Americans Support Common Sense Measures to Cut Down on Illegal Guns (Apr. 10, 2008): 3-6, http://www.mayorsagainstillegalguns.org/downloads/pdf/polling_memo.pdf.
- Press Release, Mayors Against Illegal Guns, New Poll of NRA Members by Frank Luntz Shows Strong Support for Common-Sense Gun Laws, Exposing Significant Divide Between Rank-and-File Members and NRA Leadership (July 24, 2012), http://mayorsagainstillegalguns.org/html/media-center/pr006-12.shtml.
- Dr. Frank Luntz/Word Doctors for Mayors Against Illegal Guns, America’s Gun Owners Support Common Sense Gun Laws (Dec. 2009), 9, http://www.mayorsagainstillegalguns.org/downloads/pdf/luntz_poll_slides.pdf. Seventy-two percent of NRA members and 79% of non-NRA member gun owners polled strongly agree with this concept. Eighty-two percent of NRA members and 85% of non-NRA member gun owners in this survey would support a requirement that gun retailers perform background checks on their employees to ensure they are not felons. Id. at 14.
- 18 U.S.C. § 922(a)(1)(A).
- 18 U.S.C. § 921(a)(21)(C).
- 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.
- 18 U.S.C. § 922.
- 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.
- Id. at 13.
- 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.
- 18 U.S.C. § 923(d)(1)(F)(iii).
- 27 C.F.R. § 478.44(a)(1)(ii); 18 U.S.C. § 923(d)(1)(F)(i), (ii).
- 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).
- 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).
- 18 U.S.C. § 923(g)(3)(A).
- 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.
- The report must be made to the Attorney General and to the “appropriate local authorities.” 18 U.S.C. § 923(g)(6).
- 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.
- 18 U.S.C. § 923(g)(1)(A), (B).
- 18 U.S.C. § 923(g)(7).
- 18 U.S.C. § 922(b)(1), (3).
- 18 U.S.C. § 922(b)(3).
- 18 USCS § 1715.
- Commerce in Firearms in the United States, supra note 4, at 16.
- 18 U.S.C. § 923(j).
- Ala. Code §§ 13A-11-78, 13A-11-79, 13A-11-83.
- Cal. Penal Code §§ 26500, 26700-26710.
- Cal. Penal Code § 26915.
- Cal. Penal Code § 26820, 26890(a).
- Cal. Penal Code §§ 26835, 23640.
- Cal. Penal Code § 26885.
- Conn. Gen. Stat. § 29-28.
- Conn. Gen. Stat. § 29-37f.
- Conn. Gen. Stat. § 29-37d.
- Conn. Gen. Stat. § 29-37b.
- Conn. Gen. Stat. §§ 52-571f, 53a-8(b).
- Del. Code Ann. tit. 24, §§ 901-902.
- Del. Code Ann. tit. 24, § 904(b).
- D.C. Code Ann. § 7-2504.01(b); D.C. Mun. Regs. tit. 24, § 2321.
- D.C. Code Ann. § 7-2504.07.
- D.C. Code Ann. §§ 7-2531.02, 7-2531.03, 7-2551.02, 7-2551.03.
- Fla. Stat. Ann. § 790.175.
- Haw. Rev. Stat. Ann. § 134-31.
- 430 Ill. Comp. Stat. Ann. 68/5-15.
- 430 Ill. Comp. Stat. Ann. 68/5-40.
- 430 Ill. Comp. Stat. Ann. 68/5-50, 68/5-55.
- 430 Ill. Comp. Stat. Ann. 68/5-20.
- 720 Ill. Comp. Stat. 5/24-4.1(a).
- Ind. Code Ann. §§ 35-47-2-14 – 35-47-2-16.
- Me. Rev. Stat. Ann tit. 15, § 455-A.
- Md. Code Ann., Pub. Safety §§ 5-101, 5-106.
- Md. Code Ann., Pub. Safety § 5-110(a)(4).
- Md. Code Ann., Pub. Safety § 5-145.1.
- Mass. Gen. Laws ch. 140, §§ 122, 122B, 123, 128.
- Mass. Gen. Laws ch. 140, § 123.
- Mass. Gen. Laws ch. 6, § 172M.
- Mass. Gen. Laws ch. 140, § 123.
- Mass. Gen. Laws ch. 140, § 123.
- Mass. Gen. Laws ch. 140 §§ 123, 129C.
- Mich. Comp. Laws § 28.435(6).
- Minn. Stat. § 624.7161; Minn. Admin. Rules Ch. 7504.
- Minn. Stat. § 624.7162.
- Neb. Rev. Stat. Ann. § 69-2426.
- N.H. Rev. Stat. Ann. §§ 159:8, 159:10.
- N.H. Rev. Stat. Ann. § 650-C:1(VII).
- N.J. Stat. Ann. § 2C:58-2(a); N.J. Admin. Code § 13:54-3.2.
- N.J. Stat. Ann. § 2C:58-2(a).
- N.J. Stat. Ann. § 2C:58-2(a), N.J. Admin. Code §§ 13:54-3.11, 13:54-6.1-13:54-6.5.
- N.J. Stat. Ann. §§ 2C:58-16, 2C:58-17.
- N.J. Admin. Code § 13:54-6.6.
- N.Y. Penal Law §§ 265.00(9), 400.00.
- N.Y. Gen. Bus. Law § 875-b.
- N.Y. Gen. Bus. Law § 396-ee.
- N.C. Gen. Stat. §§ 14-315.1, 14-315.2.
- Ohio Rev. Code Ann. §§ 2923.25, 5502.63(A).
- 2021 SB 554.
- 18 Pa. Cons. Stat. § 6112.
- 18 Pa. Cons. Stat. Ann. § 6113.
- 18 Pa. Cons. Stat. §§ 6111(g)(5), (6).
- R.I. Gen. Laws §§ 11-47-38, 11-47-39.
- R.I. Gen. Laws § 11-47-40(b).
- Tex. Penal Code Ann. § 46.13(g).
- Vt. Stat. Ann. tit. 13, § 4024(b).
- Va. Code Ann. § 18.2-308.2:3.
- Wash. Rev. Code Ann. § 9.41.110.
- Wash. Rev. Code Ann. § 9.41.110(5)(b).
- Rev. Code Wash. (ARCW) § 9.41.090(6)(b).
- Wis. Admin. Code Jus § 10.04.
- Wis. Stat. § 175.37.
- 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.
- A license is required for a dealer sales of pistols, revolvers or “other deadly weapons made especially for the defense of one’s person”.
- A license is required for dealer sales of “regulated firearms,” defined as handguns and certain listed assault weapons.
- A license is required for dealer sales of handguns, assault weapons and large capacity ammunition feeding devices.
- 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).
- 430 Ill. Comp. Stat. Ann. 68/5-55.
- 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.
- 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.
- 430 Ill. Comp. Stat. Ann. 68/5-50.
- 430 Ill. Comp. Stat. Ann. 68/5-80.
- See 2022 CA SB 1384 (adding Cal. Penal Code §§ 26806).
- N.Y. Gen. Bus. Law § 875-b.
- Rev. Code Wash. (ARCW) § 9.41.090(6)(b).
- Cal. Penal Code §§ 26885, 30363.
- 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.
- San Francisco Police Code §§ 613-619.
- Certain local jurisdictions, such as New York City and San Francisco, impose this requirement.
- Certain local jurisdictions, such as Los Angeles and San Francisco, impose this requirement.
- 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).