What Obama's Executive Action on Guns Means for Gun Sellers

Gun control has been an issue of great public concern for several years now and the debate flames up each time there is a mass shooting or other crime that involves firearms violence. Recently President Obama announced that he was taking "executive action" specific in an attempt to prevent further gun violence. Regardless of what side you come down on with this very hotly contested issue, if you own firearms and engage in sales of firearms with any frequency it is very important that you understand the action President Obama proposes to take and to pay attention as the details are developed.

First of all, this article will not engage in any analysis of what should or shouldn't be done about gun control and it will not proffer any legal opinions about the constitutionality of what President Obama proposes to do. This article simply addresses what the likely impact will be of the executive action President Obama has proposed.

Second, it is important to understand what President Obama is and is not doing. President Obama did not initiate any new law or regulation regarding guns. What he did do was propose a new (and perhaps broader) interpretation of an existing law and has ordered that this existing law be enforced according to his interpretation. Federal law (18 USC Sec. 923) provides that "[n]o person shall engage in the business of importing, manufacturing, or dealing in firearms, or importing or manufacturing ammunition, until he has filed an application with and received a license to do so from the Attorney General." The term "dealer" is defined by the Code of Federal Regulations, 27 CFR Sec 478.11, as "[a]ny person engaged in the business of selling firearms at wholesale or retail; any person engaged in the business of repairing firearms or of making or fitting special barrels, stocks, or trigger mechanisms to firearms; or any person who is a pawnbroker. The term shall include any person who engages in such business or occupation on a part-time basis." The regulations further clarify the definition of a dealer with the defined term "Dealer in firearms other than a gunsmith or a pawnbroker." The regulations define that term to include a "person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such a 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." Thus, any business or individual that engages in the business of selling firearms must have a license. President Obama, through executive action, will seek to enforce this provision broadly and likely seek to classify many individuals as dealers who were not previously considered "dealers" and therefore not required to have a license. Under federal law, anyone who deals firearms without a license is guilty of a felony and may be sentenced to up to 5 years in prison.

The next piece of Obama's executive action relates to background checks. Anyone who has been paying attention to the news related to gun control has heard about the "gun show loophole." There really is no loophole or specific exception for sales at gun shows. What this really refers to is the fact that unlicensed sellers of firearms are not required under federal law to contact criminal background checks. Obama's executive action seeks to close or narrow this "loop hole" by classifying more sellers of guns as "dealers" thereby requiring them to be licensed and conduct background checks.

While it is not yet clear exactly what level of sales or commercial activity rises to the level of requiring one to obtain a Federal Firearms License, it is clear that the government will seek to classify many more sellers of firearms as "dealers." If you are a person that engages in the sale of firearms with any regularity I would pay careful attention to this issue as it develops and seriously consider applying for a FFL.


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