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THE LOOPHOLE:
Unlicensed Dealers.
No background check, no problem.
They call themselves private collectors to avoid conducting background checks. But they often sell more guns than licensed dealers.
The Loophole: Unlicensed private sellers illegally engaged in the business
Our investigation revealed that many private dealers are unlicensed, despite clear signs of being engaged in the business. These dealers sell firearms without conducting background checks, providing a major avenue for criminals to acquire illegal guns.
WHAT WE FOUND
- Some private sellers were selling numerous guns. For example, one seller acknowledged selling 348 assault rifles in less than one year – for revenue likely exceeding approximately $174,000. One dealer said he “keeps a nice selection,” and, when asked about .45s, another dealer said he sells “as many as he can get.”
- Some private sellers sell firearms frequently. Several sellers said they go to “all the shows” or a gun show “every two weeks.” One private dealer explained that he keeps a lot of long guns in stock because he “does a lot of shows out of state” and can’t sell hand guns out of state.
- Some private sellers had employees. Two private sellers acknowledged they were employees of other people.
THE LOOPHOLE
There are two types of gun sales in the U.S. – licensed, regulated sales, and private, unregulated sales.
A dealer engaged in the business of selling guns must be a federally licensed firearm dealer (FFL) and check their buyers through the National Instant Background Check System (NICS).
However, private individuals who make occasional sales from their personal collection can sell firearms without a license. Because private sellers are presumed to make only occasional sales, their sales are minimally regulated. Private sellers aren’t required to keep records of their sales, or conduct background checks on their buyers.
This dual system of gun sales creates the gun show loophole – facilitating the unregulated sale of firearms to virtually any interested buyer.
What determines whether a dealer is in the business of selling firearms?
There are two types of gun sales in the U.S. – licensed, regulated sales, and private, unregulated sales. A dealer engaged in the business of selling guns must be a federally licensed firearm dealer (FFL) and check their buyers through the National Instant Background Check System (NICS).
However, private individuals who make occasional sales from their personal collection can sell firearms without a license. Because private sellers are presumed to make only occasional sales, their sales are minimally regulated. Private sellers aren’t required to keep records of their sales, or conduct background checks on their buyers.
This dual system of gun sales creates the gun show loophole – facilitating the unregulated sale of firearms to virtually any interested buyer.
What determines whether a dealer is in the business of selling firearms?
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| Private sellers, who reported selling 348 assault rifles in a year, pictured at the Hara Arena in Trotwood, OH. |
Federal law lacks an explicit standard for determining exactly when a seller is “engaged in the business of selling firearms” but courts have considered a number of indicia.
A seller may need a license if he or she “devotes time, attention, and labor to dealing in firearms as a regular course of business,” makes substantial profits and sales, or shows other signs of a professional business.
