Federal law requires firearms dealers to obtain a license from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), although resource limitations prevent the ATF from properly overseeing all its licensees.

Beginning July 1, 2025, Colorado will require any federal firearm licensee (FFL) who sells firearms at retail to the public to obtain a permit from the state’s Department of Revenue in order to engage in the business of dealing in firearms in the state.¹

In order to be issued a state permit to sell firearms, a dealer must:

• Have a federal firearms license;
• Not have had any license or permit to sell, lease, transfer, possess or purchase firearms or ammunition for good cause for three years;
• Not have been convicted of violating any federal or state gun law for three years;
• Not make any false statements on the application.²

A state permit to sell firearms is valid for three years unless revoked or suspended.³

Subject to appropriations, DOR must inspect ten percent of permit holders, randomly selected, every year, and may conduct additional unannounced inspections to ensure compliance with the law.⁴  

DOR must submit an annual report containing specified information about state permits to sell firearms to the state budget committee.⁵

Dealers and dealer employees who have access to firearms must complete a yearly online training course covering:

• Federal and state gun laws regarding the sale and transfer of firearms and ammunition;
• Recognizing straw purchasers and fraudulent activity;
• Indicators the a person is trying to purchase a firearm illegally;
• Recognizing that a person intends to use a firearm unlawfully or for self-harm;
• Preventing theft or burglary of firearms or ammunition; 
• Responding to and reporting these situations;
• Teaching consumers rules of firearm safety, including safe handling and storage; and
• Other reasonable business practices that DOR determines will deter firearms trafficking and unlawful use of firearms.⁶ 

A dealer may not conduct business or store firearms at the place of business unless the dealer secures each firearm. Except when a firearm is being shown to a customer, repaired or otherwise worked on in a manner that prevents unauthorized use of the firearm, securing a firearm may include keeping the firearm in a locked container, including a locked display case, properly installing a locking device on the firearm, or, if the firearm is a personalized firearm, activating the safety characteristics of the firearm.⁷ A dealer may not sell firearms: outside of posted business hours, except at a gun show, or to a person the dealer knows or suspects is intoxicated.⁸

 Before having access to firearms, and once every three years, dealer employees must pass a fingerprint-based background check .⁹ 

For laws:

• Requiring firearm dealers to conduct a background check on purchasers, see the Colorado Background Checks section;
• Setting the procedure for firearm dealers to conduct background checks on behalf of unlicensed firearm sellers, please see the Colorado Universal Background Checks section;
• Requiring firearm dealers to keep records of, or report firearm sales, see the Colorado Retention of Sales & Background Checks Records section; and
• Requiring firearm dealers to ensure that purchasers possess a locking device, see the Colorado Locking Devices section.

Colorado also requires gun dealers to post a sign that states Colorado’s prohibition on knowingly purchasing or obtaining a firearm on behalf of, or for transfer to, another person the purchaser knows or reasonably should know is ineligible to possess a firearm.¹⁰ The dealer must post the sign in an easily readable manner, in an area that is visible to the public at each location from which the dealer sells firearms.¹¹ A dealer who reasonably believes, knows, or should know, or becomes aware after a transfer, that a person, including an employee, purchased or attempted to purchase a firearm in on behalf of someone ineligible to possess firearms, the dealer must report that information to a law enforcement agency with jurisdiction over the dealer’s place of business.¹²

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1. Colo. Rev. Stat. § 18-12,401, 18-12-401.5.[↩]
2. Colo. Rev. Stat. § 18-12-401.5.[↩]
3. Id.[↩]
4. Id.[↩]
5. Id.[↩]
6. Colo. Rev. Stat. § 18-12-406.[↩]
7. Id.[↩]
8. Id.[↩]
9. Colo. Rev. Stat. § 18-12-407.[↩]
10. Colo. Rev. Stat. § 18-12-111.[↩]
11. Id.[↩]
12. Id.[↩]