Dealer Regulations Policy Summary

Posted on September 13, 2013

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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 53,500 individuals currently have “Type 1” federal firearms licenses, which allow them to act as firearms dealers, and over 7,700 individuals have “Type 2” licenses, which allow them to buy and sell guns as pawnbrokers.2 About 77,000 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.

dealerreg_FINALOversight 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 in the Mexican drug war between 2007 and 2011 and traced by ATF originated in the United States.6 According to one report, U.S. 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 U.S. 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

A 2004 report by the U.S. 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 FFL’s in 2009  and, on average, dealers are inspected only once a decade.13

Although only 62% of FFLs inspected in 2011 were found to be in compliance with federal gun laws,14 ATF rarely revokes dealers’ licenses. In 2011, ATF took administrative action against 4,056 FFLs, but only revoked or denied the renewal of 71 licenses.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.

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 purchaser.19

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.”20 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.21 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.22

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.23

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.24 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.25

Moreover, a nationwide poll conducted in March and April 2008 found that:

(1) 86% of Americans favor requiring gun retailers to inspect their inventories every year to report stolen or missing guns;

(2) 88% of Americans favor requiring gun stores to keep all guns locked securely to prevent theft; and

(3) 74% of Americans favor requiring gun retailers to videotape all gun sales.26

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.27  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.”28

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Licensing Requirements:  Federal law makes it unlawful for any person except a licensed dealer to engage in the business of dealing in firearms.29 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 with the principal objective of livelihood and 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.30

By contrast, a so-called “private seller” (one who is not “engaged in the business”) is exempt from federal licensing requirements.31 An estimated 40% of firearm sales every year are private sales.32 Additional information about unlicensed sellers is contained in our summary on Universal Background Checks & the Private Sale Loophole.

According to a 1999 report issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the current 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

The dealer population decreased substantially as a result of these reforms, and the total number of dealers has remained significantly below pre-reform levels.41  As of August 2013, over 53,000 individuals   have “Type 1” federal firearms licenses, which allow them to act as firearms dealers, and over 7,700 individuals have “Type 2” licenses, which allow them to buy and sell guns as pawnbrokers; about 77,000 individuals have other types of federal firearms licenses.42

Dealer Duties and Prohibitions:  Once licensed, federal law requires dealers to:

  • Initiate background checks on unlicensed firearm purchasers;43
  • Maintain records of the acquisition and sale of firearms;44
  • 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);45
  • 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;46 and
  • Report the theft or loss of a firearm within 48 hours after the theft or loss is discovered.47

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

Dealers must also submit to a maximum of one ATF inspection per year to ensure compliance with federal recordkeeping requirements.48  More frequent inspections are permitted if a federal magistrate has issued a search warrant or if the search is incidental to a criminal investigation.49  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.50

A licensed dealer may not sell or deliver: (1) a handgun to a resident of another state; (2) a handgun or handgun ammunition to a person the dealer knows or has reasonable cause to believe is under the age of 21; or (3) 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 18.51 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.52

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.53  Of the remaining 44%, 25% operated out of commercial premises that were gun shops or sporting goods or hardware stores.54  The remainder were located in businesses that are not usually associated with gun sales, such as funeral homes or auto parts stores.55

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.56

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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 Checks Procedure and Maintaining Records and Reporting 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 State License Required Bans Residential   Dealers Background Checks   on Employees Security Measures Warnings to   Purchasers Theft or Loss   Reporting57 Strict Liability
AL Yes58 No No Yes59 No No No
CA Yes60 No No Yes61 Yes62 Yes63 No
CT Yes64 No Yes65 Yes66 Yes67 No Yes68
DE Yes69 No Yes70 No No No No
DC Yes71 No No Yes72 No No Yes73
FL No No No No Yes74 No No
GA Yes75 No No No No No No
HI Yes76 No No No No No No
IN Yes77 No No No No No No
ME No No No No Yes78 No No
MD Yes79 No No No No No No
MA Yes80 Yes81 No Yes82 Yes83 Yes84 No
MI No No No No Yes85 No No
MN No No No Yes86 Yes87 No No
NE No No No No Yes88 No No
NH Yes89 No No No Yes90 No No
NJ Yes91 No Yes92 Yes93 Yes94 Yes95 No
NY Yes96 No No No Yes97 No No
NC No No No No Yes98 No No
OH No No No No Yes99 No No
PA Yes100 No No Yes101 No No Yes102
RI Yes103 No No Yes104 No No No
TX No No No No Yes105 No No
VA No No Yes106 No No No No
WA Yes107 No Yes108 No No No No
WV No No No Yes109 No No No
WI Yes110 No No No Yes111 No No

The other 24 states do not have any of these laws.

Description of State Laws Regulating Gun Dealers

For citations, please see the chart above.

1. Dealer Licensing: Sixteen states and the District of Columbia require firearms dealers to obtain a state-issued license. The following states require licensing for the sale of all firearms: California, Hawaii, Massachusetts, New Jersey (dealer employees must also be licensed), Pennsylvania, Rhode Island,112 and Washington. The District of Columbia also requires licensing for the sale of all firearms.

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; and
• 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 licensing for the sale of handguns or other specified firearms only: Alabama, Connecticut (any person who sells ten or more handguns per year or is an FFL), Delaware (dealer sales of pistols, revolvers or “other deadly weapons made especially for the defense of one’s person”), Georgia, Indiana, Maryland (dealer sales of “regulated firearms,” defined as handguns and certain listed assault weapons), New Hampshire, and New York (dealer sales of handguns, assault weapons and large capacity ammunition feeding devices).

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.

2. Banning Residential Dealers: Massachusetts is the only state that prohibits dealers from operating in a residence or dwelling.

3. Employee Background Checks: Five states – Connecticut, Delaware, New Jersey, Virginia and Washington – require background checks on firearms dealer employees. 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, firearms dealers may require employees who handle, sell or deliver firearms at the dealers’ place of business to undergo background checks, but such background checks are not mandatory.113 California law explicitly permits local governments to require background checks of firearms dealer employees.114

4. Security Measures: Nine states — Alabama, California, Connecticut, Massachusetts, Minnesota, New Jersey, Pennsylvania, Rhode Island, and West Virginia require firearms dealers to utilize security measures to reduce the risk of theft from their premises. 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 – Alabama, California and Rhode Island (handguns, imitation handguns and handgun advertising), Massachusetts (firearms), New Jersey (firearms and imitation firearms), Pennsylvania (handguns or short-barreled rifles or shotguns), West Virginia. In California and Minnesota, dealers must store firearms in a specified manner after business hours. In Connecticut, businesses that sell firearms at retail must have burglar alarms that are connected directly to the local police department. New Jersey dealers must install a state-approved theft detection and prevention system and implement security and safe storage measures. Minnesota 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.”

5. Warnings to Purchasers: Fifteen states require dealers to post and/or deliver written warnings to purchasers regarding the risks of storing firearms in a manner accessible to children. Those states are: California, Connecticut, Florida, Maine, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Texas, and Wisconsin.

In California, dealers must post additional warnings, including those regarding the risk of lead exposure from firearms and the state’s one-handgun-a-month law.115

6. 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 & Stolen Firearms. California requires dealers to report theft or loss of any firearm to the local law enforcement agency where the dealer is located within 48 hours. 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.

7. Strict Liability:116 Two states – 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; or
• 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.117  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 in sensitive public locations such as near 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.

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, contact the Law Center.

50 State Summary

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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 (California, Hawaii, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Washington, District of Columbia)
  • Dealers in residential and other sensitive neighborhoods are prohibited (Massachusetts)
  • Dealer employees are required to undergo background checks (Connecticut, Delaware, New Jersey, Virginia, Washington)
  • 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) (Alabama, California, Connecticut, Massachusetts, Minnesota, New Jersey, Pennsylvania, Rhode Island, West Virginia, District of Columbia)
  • 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 annually118
  • Dealers are required to obtain liability insurance to ensure that persons harmed by the dealers’ actions will be adequately compensated119
  • Dealers are required to post warnings to consumers regarding safe storage of firearms and the consequences of improperly storing firearms (California, Connecticut, Florida, Maine, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Texas, Wisconsin)
  • Dealers are required to report the theft or loss of any firearm to state and local authorities (Massachusetts)
  • 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 firearms120
  1. 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). []
  2. Federal firearms licensee totals as of Aug. 13, 2013 were published by ATF at http://www.atf.gov/about/foia/ffl-list.html. In addition to over 53,500 dealer licensees, and 7,700 pawnbrokers, about 64,200 individuals are licensed as firearms collectors, and 11,200 are licensed as manufacturers of firearms or ammunition.  Less than 1,000 individuals are licensed as importers of firearms. []
  3. Id. []
  4. Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Following the Gun: Enforcing Federal Laws Against Firearms Traffickers 13 (June 2000), at http://www.mayorsagainstillegalguns.org/downloads/pdf/Following_the_Gun%202000.pdf. []
  5. 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), at http://www.mayorsagainstillegalguns.org/downloads/pdf/Commerce_in_Firearms_2000.pdf. []
  6. Press Release, Bureau of Alcohol, Tobacco, Firearms & Explosives, U.S. Department of Justice, ATF Releases Government of Mexico Firearms Trace Data (April 26, 2012), at http://www.atf.gov/press/releases/2012/04/042612-atf-atf-releases-government-of-mexico-firearms-trace-data.html. []
  7. 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 192-93 (Eric L. Olson, David A. Shirk & Andrew Selee eds., 2010), at http://www.wilsoncenter.org/sites/default/files/Shared%20Responsibility%2012.22.10.pdf. []
  8. Id. at 193. []
  9. Id. a 198. []
  10. Brady Center to Prevent Gun Violence, Shady Dealings, Illegal Gun Trafficking From Licensed Gun Dealers  24-25 (Jan. 2007), at 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. []
  11. 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 i (July 2004), at http://www.justice.gov/oig/reports/ATF/e0405/final.pdf . []

  12. Office of the Inspector General, Evaluation and Inspections Division, U.S. Department of Justice, Review of ATF’s Federal Firearms Licensee Inspection Program ii (Apr. 2013), at 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 percent and that they needed 504 more investigators to conduct all inspections due that year.” Id. at 22. []
  13. Sari Horwitz and James V. Grimaldi, ATF’s Oversight Limited in Face of Gun Lobby, Wash. Post, Oct. 26, 2010, at http://www.washingtonpost.com/wp-dyn/content/article/2010/10/25/AR2010102505823.html?sub=AR. []
  14. Office of the Inspector General, Evaluation and Inspections Division, U.S. Department of Justice, Review of ATF’s Federal Firearms Licensee Inspection Program 1 (Apr. 2013), at http://www.justice.gov/oig/reports/2013/e1305.pdf. []
  15. Id. at 28. []
  16. David S. Fallis, Virginia Gun Dealers: Small Number Supply Most Guns Tied to Crimes, Wash. Post, Oct. 25, 2010, at 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 23 (January 2007).  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 4 (May 2003), at http://content.thirdway.org/publications/10/AGS_Report_-_The_Enforcement_Gap_-_Federal_Gun_Laws_Ignored.pdf. []
  17. Office of the Inspector General, Evaluation and Inspections Division, U.S. Department of Justice, Review of ATF’s Federal Firearms Licensee Inspection Program 31 (Apr. 2013), at http://www.justice.gov/oig/reports/2013/e1305.pdf. []
  18. Id. at  2. []
  19. Center for American Progress, Lost and Stolen Guns from Gun Dealers (June 2013), at http://www.americanprogress.org/wp-content/uploads/2013/06/GerneyInventoryBrief-1.pdf. []
  20. Mayors Against Illegal Guns, Trace the Guns: The Link Between Gun Laws and Interstate Gun Trafficking 26-27 (Sept. 2010), at http://www.tracetheguns.org/report.pdf. []
  21. Daniel W. Webster et al., Effects of State-Level Firearm Seller Accountability Policies on Firearms Trafficking, 86 J. Urban Health 525 (July 2009).  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 199 (June 23, 2009), at http://www.biomedcentral.com/content/pdf/1471-2458-9-199.pdf. []
  22. Int’l Ass’n of Chiefs of Police (IACP), Taking a Stand: Reducing Gun Violence in Our Communities 14 (2007), at http://www.theiacp.org/LinkClick.aspx?fileticket=%2Fs0LiOkJK5Q%3D&tabid=87. []
  23. Colleen L. Barry et al., After Newtown — Public Opinion on Gun Policy and Mental Illness, 368 New Eng. J. Med. 1077, 1079 (Mar. 21, 2013), at http://www.nejm.org/doi/pdf/10.1056/NEJMp1300512. []
  24. Id. []
  25. Id. []
  26. Greenberg Quinlan Rosner Research & The Tarrance Group for Mayors Against Illegal Guns, Americans Support Common Sense Measures to Cut Down on Illegal Guns 3, 6 (Apr. 10, 2008), at http://www.mayorsagainstillegalguns.org/downloads/pdf/polling_memo.pdf. []
  27. 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), at http://mayorsagainstillegalguns.org/html/media-center/pr006-12.shtml. []
  28. Dr. Frank Luntz/Word Doctors for Mayors Against Illegal Guns, America’s Gun Owners Support Common Sense Gun Laws 9 (Dec. 2009), at 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. []
  29. 18 U.S.C. § 922(a)(1)(A). []
  30. 18 U.S.C. § 921(a)(21)(C). []
  31. Id. []
  32. Philip J. Cook & Jens Ludwig, Guns in America: National Survey on Private Ownership and Use of Firearms, U.S. Department of Justice, National Institute of Justice Research in Brief 6-7 (May 1997), at https://www.ncjrs.gov/pdffiles/165476.pdf. []
  33. 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 13-14 (Jan. 1999), at http://www.atf.gov/files/publications/download/treas/treas-gun-shows-brady-checks-and-crime-gun-traces.pdf. []
  34. 18 U.S.C. § 922. []
  35. 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 11 (Feb. 2000). []
  36. Id. []
  37. Id. at 13. []
  38. 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. []
  39. 18 U.S.C. § 923(d)(1)(F)(iii). []
  40. 27 C.F.R. § 478.44(a)(1)(ii); 18 U.S.C. § 923(d)(1)(F)(i), (ii). []
  41. By 1997, after the first three-year cycle of relicensing under the new laws had been complete, the number of FFLs had dropped by 49% nationwide, to 107,554.  Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Commerce in Firearms in the United States 14 (Feb. 2000).  []
  42. Federal firearms licensee totals as of Aug. 13, 2013 were published by ATF at http://www.atf.gov/about/foia/ffl-list.html. In addition to about 53,000 dealer licensees, about 7,700 individuals are licensed as pawnbrokers, 64,200 are licensed as firearms collectors, and 11,200 are licensed as manufacturers of firearms or ammunition.  Less than 1,000 individuals are licensed as importers of firearms. []
  43. 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 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.  18 U.S.C. § 922(t)(1). []
  44. 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). []
  45. 18 U.S.C. § 923(g)(3)(A). []
  46. 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, at 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, at http://www.atf.gov/files/firearms/industry/080911-qa-multiple-rifles.pdf. []
  47. The report must be made to the Attorney General and to the “appropriate local authorities.” 18 U.S.C. § 923(g)(6).  []
  48. 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 FFL’s 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, at http://www.washingtonpost.com/wp-dyn/content/article/2010/10/25/AR2010102505823.html?sub=AR. []
  49. 18 U.S.C. § 923(g)(1)(A), (B). []
  50. 18 U.S.C. § 923(g)(7). []
  51. 18 U.S.C. § 922(b)(1), (3). []
  52. 18 U.S.C. § 922(b)(3). []
  53. Commerce in Firearms in the United States, supra note 4, at 16. []
  54. Id. []
  55. Id. []
  56. 18 U.S.C. § 923(j). []
  57. See our summary on Reporting Lost & Stolen Firearms for laws generally requiring the reporting of lost or stolen firearms. []
  58. Ala. Code §§ 13A-11-78, 13A-11-79, 13A-11-83. []
  59. Ala. Code § 13A-11-79. []
  60. Cal. Penal Code §§ 26500, 26700-26710. []
  61. Cal. Penal Code § 26820, 26890(a). []
  62. Cal. Penal Code §§ 26835, 23635(e), 23640. []
  63. Cal. Penal Code § 26885. []
  64. Conn. Gen. Stat. § 29-28. []
  65. Conn. Gen. Stat. § 29-37f. []
  66. Conn. Gen. Stat. § 29-37d. []
  67. Conn. Gen. Stat. § 29-37b. []
  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. Ga. Code Ann. § 43-16-2. []
  76. Haw. Rev. Stat. Ann. § 134-31. []
  77. Ind. Code Ann. §§ 35-47-2-14 – 35-47-2-16. []
  78. Me. Rev. Stat. Ann tit. 15, § 455-A. []
  79. Md. Code Ann., Pub. Safety §§ 5-101, 5-106. []
  80. Mass. Gen. Laws ch. 140, §§ 122, 122B, 123, 128. []
  81. Mass. Gen. Laws ch. 140, § 123. []
  82. Mass. Gen. Laws ch. 140, § 123. []
  83. Mass. Gen. Laws ch. 140, § 123. []
  84. Mass. Gen. Laws ch. 140 §§ 123, 129C. []
  85. Mich. Comp. Laws § 28.435(6). []
  86. Minn. Stat. § 624.7161; Minn. Admin. Rules Ch. 7504. []
  87. Minn. Stat. § 624.7162. []
  88. Neb. Rev. Stat. Ann. § 69-2426. []
  89. N.H. Rev. Stat. Ann. §§ 159:8, 159:10. []
  90. N.H. Rev. Stat. Ann. § 650-C:1(VII). []
  91. N.J. Stat. Ann. § 2C:58-2(a); N.J. Admin. Code § 13:54-3.2. []
  92. N.J. Stat. Ann. § 2C:58-2(a). []
  93. N.J. Stat. Ann. § 2C:58-2(a), N.J. Admin. Code §§   13:54-3.11, 13:54-6.1-13:54-6.5. []
  94. N.J. Stat. Ann. §§ 2C:58-16, 2C:58-17. []
  95. N.J. Admin. Code § 13:54-6.6. []
  96. N.Y. Penal Law §§ 265.00(9), 400.00. []
  97. N.Y. Gen. Bus. Law § 396-ee. []
  98. N.C. Gen. Stat. §§ 14-315.1, 14-315.2. []
  99. Ohio Rev. Code Ann. §§ 2923.25, 5502.63(A). []
  100. 18 Pa. Cons. Stat. § 6112. []
  101. 18 Pa. Cons. Stat. Ann. § 6113. []
  102. 18 Pa. Cons. Stat. §§ 6111(g)(5), (6). []
  103. R.I. Gen. Laws §§ 11-47-38, 11-47-39. []
  104. R.I. Gen. Laws § 11-47-40(b). []
  105. Tex. Penal Code Ann. § 46.13(g). []
  106. Va. Code Ann. § 18.2-308.2:3. []
  107. Wash. Rev. Code Ann. § 9.41.110. []
  108. Wash. Rev. Code Ann. § 9.41.110(5)(b). []
  109. W. Va. Code § 61-7-10(a)(1). []
  110. Wis. Admin. Code Jus § 10.04. []
  111. Wis. Stat. § 175.37. []
  112. 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. []
  113. Cal. Penal Code § 26915(a), (b). []
  114. Cal. Penal Code § 26915(c), (d). []
  115. In addition, Colorado requires FFLs to post a sign describing the state’s prohibition on straw purchasers. Colo. Rev. Stat. § 18-12-111. []
  116. In 2005, Congress passed and the President signed into law the Protection of Lawful Commerce in Arms Act (PLCAA). The PLCAA 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. []
  117. San Francisco Police Code §§ 613-619. []
  118. Certain local jurisdictions, such as New York City and San Francisco, impose this requirement. []
  119. Certain local jurisdictions, such as Los Angeles and San Francisco, impose this requirement. []
  120. 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). []