Universal Background Checks & the Private Sale Loophole Policy Summary

Posted on August 21, 2013

privatesales-cropped

background-header

The most dangerous gap in federal firearms laws today is the “private sale” loophole.  Although federal law requires licensed firearms dealers to perform background checks on prospective purchasers and maintain records of all gun sales, it does not require unlicensed “private” sellers to do so. An estimated 40% of all firearms sold in the U.S. are transferred by unlicensed sellers.1

According the U.S. Department of Justice, because federal law does not require universal background checks, “individuals prohibited by law from possessing guns can easily obtain them from private sellers and do so without any federal records of the transactions.”2  “The private-party gun market,” one study observed, “has long been recognized as a leading source of guns used in crimes.”3  Although the private sale loophole is frequently referred to as the “gun show” loophole (because of the particular problems associated with gun shows), it applies to all private firearm sales, regardless of where they occur.4

private gun sales and traffickingThe growth of the Internet has significantly increased the ability of individuals prohibited from possessing firearms to find sellers willing to transfer firearms to them without background checks.

  • As of September 2013, about 67,000 firearms were  listed for sale online from private, unlicensed sellers.5
  • 29% of ads by private sellers on Armslist.com (a popular website for firearm sales) were posted by high-volume private sellers who posted five or more ads over an eight-week period.6
  • According to an undercover investigation conducted by the City of New York, 62% of private online firearm sellers agreed to sell a firearm to a buyer even after the buyer had told the seller that he or she probably could not pass a background check.7

When private sellers don’t run background checks, people known to be dangerous can easily obtain guns, often with deadly consequences. For example, in 2012, a gunman killed three people, including his wife, and injured four others at a spa in Wisconsin, after buying a gun through a private seller he found online.  The shooter was prohibited from purchasing guns due to a restraining order his wife had acquired against him, but was able to buy the gun anyway because the seller was not required to run a background check.8

In a 2007 report, the International Association of Chiefs of Police (IACP) stated that, because individuals who fail a background check can easily access firearms through private sales, “guns are far too easily acquired by prohibited possessors, and too often end up being used in gun crime and gun violence.”9  The IACP concluded that “Congress, as well as state, local and tribal governments, should enact laws requiring that all gun sales and transfers proceed through” a federally licensed dealer.10

Private sales represent a significant conduit for illegal gun trafficking. 

  • The Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) found that during one 29-month period, unlicensed sellers were involved in about one-fifth of illegal trafficking investigations nationwide and associated with nearly 23,000 trafficked guns.11
  • A study which used crime gun trace data from 53 U.S. cities for the years 2000–2002 found that laws regulating private handgun sales are strongly associated with fewer trafficked guns.12
  • A 2009 GAO report found that “secondary firearms — firearms resold following the first retail purchase from an FFL, or ‘used guns’ — are commonly trafficked to Mexico.”13
  • Another report observed that the lack of background check and record retention requirements for private gun transfers “continue to make it much easier for prohibited persons to purchase firearms and much harder
    for U.S. authorities to successfully trace how a firearm illegally reached Mexico.”14

privatesales-1-FINALGun offenders overwhelmingly obtain their guns through private sales. A survey of state prison inmates in 13 states who were convicted of gun offenses found that only 13.4% obtained the gun from a gun store or pawnshop, where background checks are required.15 Nearly all (96.1%) of those inmates who were already prohibited from possessing a gun at the time of the crime obtained the firearm through an unlicensed private seller.16

When background checks are required, they are extremely effective at keeping guns out of the hands of prohibited persons. Since the federal background check requirement was adopted in 1994, over two million prohibited persons have been denied a firearm transfer or permit.17  In 2010 alone, more than 117,000 gun transfers were denied using the federal background check system.18

Repeated polls have shown that over 90% of the American public supports laws requiring background checks on all gun purchasers, regardless of whether they buy weapons from licensed dealers or private sellers.19 A survey conducted for the New England Journal of Medicine in January 2013 found that 84% of gun owners and 74% of NRA members also support requiring a universal background check system for all gun sales.20

As described below, the strongest laws require a background check at the point of sale for every gun transfer.  Some additional states only require a background check when a gun is sold at a gun show, or require gun purchasers to obtain a license before purchasing a gun and issue the license only after a background check.  For additional information in support of these laws, see our summaries on Gun Shows and Licensing Gun Owners & Purchasers.

federal-header

Federal law imposes various duties on federally licensed firearms dealers.  Firearms dealers must, among other things: (1) perform background checks on prospective firearm purchasers; (2) maintain records of all gun sales; (3) make those records available to law enforcement for inspection; (4) report certain multiple sales; and (5) report the theft or loss of a firearm from the licensee’s inventory.21  Federal law imposes none of these requirements on unlicensed sellers, however.

The Gun Control Act of 1968 provides that persons “engaged in the business” of dealing in firearms must be licensed.22  Although Congress did not originally define the term “engaged in the business,” it did so in 1986 as part of the McClure-Volkmer Act (also known as the “Firearms Owners’ Protection Act”).  That Act defined the term “engaged in the business,” as applied to a firearms dealer, 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.”23

Significantly, however, the term was defined to exclude 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.”24 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.”25

state-header

Seventeen states and D.C. have extended the background check requirement beyond federal law to at least some private sales. Six states (California, Colorado, Connecticut, Delaware, New York, Rhode Island) and D.C. require universal background checks at the point of sale for all transfers of all classes of firearms, including purchases from unlicensed sellers; Maryland and Pennsylvania laws do the same, but are limited to handguns. Two states (Illinois and Oregon) require a background check whenever a firearm in sold at a gun show.  Finally, four states (Hawaii, Illinois, Massachusetts and New Jersey) require any firearm purchaser, including a purchaser from an unlicensed seller, to obtain a permit issued after a background check, and four more states (Iowa, Michigan, Nebraska and North Carolina) do the same only for handguns.26

Nevada and Oregon have laws allowing voluntary background checks by unlicensed sellers.

Most of these jurisdictions also require unlicensed sellers to keep records of firearm sales or report such sales to law enforcement, as detailed in our summary on Maintaining Records & Reporting Gun Sales.

Description of State Laws Closing the Private Sale Loophole

1.         Background Checks at the Point of Transfer:  The most comprehensive approach to ensuring that guns are not sold to prohibited persons is through a requirement for a background check at the point of transfer of any firearm.  Processing transfers by private sellers through licensed dealers or a law enforcement agency helps to ensure that a background check will be conducted prior to any transfer.

States that Require a Background Check at the Point of Transfer
California
Colorado
Connecticut
Delaware
District of Columbia
Maryland (handguns only)
New York
Pennsylvania (handguns only)
Rhode Island

In California,27 Colorado,28 Delaware,29 and New York30 all firearm transfers must be processed through licensed dealers, who must conduct background checks on prospective firearm purchasers.  Rhode Island requires all sellers to obtain a completed application form from the prospective purchaser, and to submit the form to law enforcement for purposes of conducting a background check.31 Concealed handgun permit holders in Delaware and Rhode Island are exempt.  Connecticut requires any person transferring a firearm to either submit a form to law enforcement or conduct the transfer through a licensed dealer, so that a background check is conducted for every sale or transfer.32 In the District of Columbia, firearms may be transferred only by or to a licensed dealer.33

Maryland34 and Pennsylvania35 require a background check on every prospective transferee of a handgun, which may be conducted by a licensed dealer or a designated law enforcement agency.

2.         Gun Show Background Checks:  Illinois36 and Oregon37 require a background check before the sale or transfer of a firearm at a gun show.  For more information about the regulation of gun shows, see our summary on Gun Shows.

3.         State Permit Requirements for Private Purchasers:  Eight states regulate private sales primarily by prohibiting private sellers from transferring certain firearms to purchasers who do not have the requisite state license or permit, and requiring a background check before issuing the license or permit.

States that Require Permits for Private Purchasers After a Background Check38
Hawaii
Illinois
Iowa (handguns only)
Massachusetts
Michigan (handguns only)
Nebraska (handguns only)
New Jersey
North Carolina (handguns only)

More specifically, Hawaii,39 Illinois,40 Massachusetts41 and New Jersey42 require a person to obtain a license or permit before purchasing any firearm from any seller, and such license or permit cannot be obtained without a background check. Iowa,43 Michigan,44 Nebraska,45 and North Carolina46 require a person to obtain a license or permit before purchasing a handgun (but not a rifle or a shotgun) and require a background check before issuing the license or permit.  These permits and licenses vary greatly in duration; as a result, there is a risk in some of these states that a person will become prohibited from purchasing a firearm after obtaining the license or permit but before purchasing a firearm.  Illinois, on the other hand, now requires a seller to contact law enforcement and verify the validity of the purchaser’s permit (called a FOID Card) at the time of the sale, effective January 1, 2014. State licensing requirements are discussed in detail in our summary on Licensing Gun Owners & Purchasers.47

4.         Voluntary Background Checks by Private Sellers:  In Nevada48 and Oregon,49 private sellers are not required to conduct background checks on purchasers (except, in Oregon, at gun shows), but they may request a background check of the purchaser.  In Oregon and Nevada, the seller makes the request to the relevant state agency, which must process the request.  In Oregon, subject to certain exceptions, a transferor who receives notification that the transferee is eligible to complete the transfer is immune from civil liability for any use of the firearm after the time of transfer.\

50 State Summary

comprehensive-law-header

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.

  • For all firearm transfers, private sellers are subject to similar requirements as licensed dealers, including background checks and recordkeeping requirements:
  • The most comprehensive option requires all firearm transfers to be conducted through licensed dealers, so that background checks will be completed on all purchasers (including purchases from unlicensed sellers), and sales records will be maintained (California, Colorado, Delaware, District of Columbia, New York)
  • If the jurisdiction does not require that all firearm transfers be conducted through licensed dealers, private sellers are required to:
    • conduct background checks through a central law enforcement agency that has access to federal and state databases of prohibited purchasers (Rhode Island requires private sellers to conduct background checks directly through law enforcement; Connecticut require private sellers to conduct background checks through licensed dealers or law enforcement);
    • maintain records of all firearm transfers for a lengthy period (Illinois requires all sellers to retain sales records for 10 years); and
    • report all transfers to state and local law enforcement (Connecticut, Hawaii, Massachusetts)
  1. 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 . []
  2. U.S. Dep’t of Justice, Office of the Inspector General, Review of ATF’s Project Gunrunner 10 (Nov. 2010), at http://www.justice.gov/oig/reports/ATF/e1101.pdf.  In addition, because federal law does not require private sellers to inspect a buyer’s driver’s license or any other identification, there is no obligation for such sellers to confirm that a buyer is of legal age to purchase a firearm. []
  3. Garen J. Wintemute et al., Private-Party Gun Sales, Regulation, and Public Safety, 363 New Eng. J. Med. 508, 509 (Aug. 5, 2010), at http://www.nejm.org/doi/pdf/10.1056/NEJMp1006326. []
  4. Issues specific to gun shows are discussed in our summary on Gun Shows. []
  5. Third Way and Americans for Responsible Solutions, What a Difference a Law Makes: Online Gun Sales in States With and Without Background Checks (Sept. 2013), at: http://www.thirdway.org/subjects/15/publications/744. []
  6. Mayors Against Illegal Guns, In the Business, Outside the Law:  How Unlicensed Sellers Are Flooding the Internet with Guns (Dec. 2013), at https://s3.amazonaws.com/s3.mayorsagainstillegalguns.org/images/InTheBusiness.pdf. []
  7. City of New York, Point, Click, Fire: An Investigation of Illegal, Online Gun Sales (Dec. 2011), at http://www.nyc.gov/html/cjc/downloads/pdf/nyc_pointclickfire.pdf. []
  8. Michael Cooper, Michael S. Schmidt & Michael Luo, Loopholes in Gun Laws Allow Buyers to Skirt Checks, N.Y. Times (Apr. 10, 2013), at http://www.nytimes.com/2013/04/11/us/gun-law-loopholes-let-buyers-skirt-background-checks.html. []
  9. 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. []
  10. Id. []
  11. Bureau of Alcohol, Tobacco and Firearms, U.S. Dep’t of the Treasury, Following the Gun: Enforcing Federal Laws Against Firearms Traffickers,xi (June 2000), at http://www.mayorsagainstillegalguns.org/downloads/pdf/Following_the_Gun%202000.pdf. []
  12. Daniel W. Webster et al., Effects of State-Level Firearm Seller Accountability Policies on Firearms Trafficking, Journal of Urban Health 86: 525–537 (2009). []
  13. U.S. Gov’t Accountability Office, Firearms Trafficking: U.S. Efforts to Combat Arms Trafficking to Mexico Face Planning and Coordination Challenges 26 (June 2009), at http://www.gao.gov/new.items/d09709.pdf. []
  14. 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 198 (Eric L. Olson, David A. Shirk & Andrew Selee eds., 2010), at http://www.wilsoncenter.org/sites/default/files/Shared%20Responsibility%2012.22.10.pdf. See also Statement Before the United States House of Representatives Committee on Foreign Affairs, Subcommittee on the Western Hemisphere by William Hoover, Assistant Dir. for Field Operations of the Bureau of Alcohol, Tobacco, Firearms and Explosives, ¶ 8 (Feb. 7, 2008), at http://www.atf.gov/press/releases/2008/02/020708-testimony-atf-ad-hoover-sw-border.html. []
  15. Katherine Vittes et al., Legal status and source of offenders’ firearms in states with the least stringent criteria for gun ownership 19 Injury Prev. 26-31 (2013). []
  16. Id. []
  17. Bureau of Justice Statistics, U.S. Dep’t of Justice, Background Checks for Firearm Transfers, 2010 – Statistical Tables, at http://bjs.gov/content/pub/pdf/bcft10st.pdf. These statistics cover the period March 1, 1994 – Dec. 31, 2010. []
  18. States may choose to have the FBI conduct background checks for guns sold in their state directly or to have a state agency process the background checks and contact the FBI on behalf of the seller. According to a report from the Bureau of Justice Statistics, the FBI denied 72,659 gun transfers in 2010 after conducting the background check directly, and state agencies denied an additional 44,589 transfers after the state contacted the FBI to conduct the background check. These statistics do not include background checks conducted for firearm licenses or permits. Id. []
  19. CNN/ORC International poll (Aug. 9, 2012), at http://i2.cdn.turner.com/cnn/2012/images/08/09/rel7a.pdf (finding that 96% of respondents supported universal background checks); Sarah Dutton et al., 9 in 10 Back Universal Gun Background Checks, CBSNews.com (Jan. 17, 2013), at http://www.cbsnews.com/8301-34222_162-57564386-10391739/9-in-10-back-universal-gun-background-checks/; Dana Blanton, Fox News poll: Twice as Many Favor More Guns over Banning Guns to Reduce Crime, FoxNews.com (Jan. 18, 2013), at http://www.foxnews.com/politics/2013/01/18/fox-news-poll-twice-as-many-favor-more-guns-over-banning-guns-to-reduce-violent/ []
  20. Colleen L. Barry et al., Perspective:  After Newtown — Public Opinion on Gun Policy and Mental Illness, 368 New Eng. J. Med. 1077-1081 (March 21, 2013) at http://www.nejm.org/doi/full/10.1056/NEJMp1300512?query=featured_home&&. []
  21. 18 U.S.C. §§ 922(t), 923(g). []
  22. 18 U.S.C § 921(a)(21)(C). []
  23. Id. []
  24. Id. []
  25. 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). []
  26. Note that Illinois requires a background check whenever a firearm is sold at a gun show, and requires any person purchasing a firearm anywhere to first obtain a permit, known as a Firearm Owner’s Identification Card, after a background check.  Under a new law, a seller who is not a dealer and not at a gun show must contact the State Police and verify the validity of the Card at the time of the sale. 2013 Ill. H.B. 1189. []
  27. Cal. Penal Code §§ 27545, 27850-28070. []
  28. Colo. Rev. Stat. § 18-12-112. 2013 Colo. H.B. 1229. See also Colo. Rev. Stat. §§ 12-26.1-101 – 12-26.1-108 (pre-existing law requiring a background check before a firearm is sold at a gun show). []
  29. Del. Code tit. 11, § 1448B, tit. 24, § 904A. []
  30. N.Y. Gen. Bus. Law § 898. 2013 NY ALS 1. See also N.Y. Gen. Bus. Law §§ 895-897; N.Y. Penal Law § 400.00 (pre-existing law requiring a background check before sale of a firearm at a gun show). []
  31. R.I. Gen. Laws §§ 11-47-35 – 11-47-35.2. []
  32. Conn. Gen. Stat. §§ 29-33(c), 29-36l(f), 29-37a(e)-(j). 2013 Ct. ALS 3. See also Conn. Gen. Stat. § 29-37g (pre-existing law requiring a background check before a firearm is sold at a gun show). []
  33. D.C. Code Ann. § 7-2505.02. []
  34. Md. Code Ann., Pub. Safety §§ 5-101(t), 5-124. Maryland’s requirement applies to “regulated firearms,” which is defined to include handguns and assault weapons.  However, assault weapons are now generally banned in Maryland. []
  35. 18 Pa. Cons. Stat. § 6111(b), (c), (f)(2). []
  36. 430 Ill. Comp. Stat. 65/3, 65/3.1. []
  37. Or. Rev. Stat. §§ 166.432 – 166.441. []
  38. This list excludes those states, like Connecticut and New York, which require a background check at the point of sale in addition to a license or permit. []
  39. Haw. Rev. Stat. Ann. §§ 134-2, 134-13. []
  40. 430 Ill. Comp. Stat. 65/1 – 65/15a, 720 Ill. Comp. Stat. 5/24-3(k). []
  41. Mass. Gen. Laws ch. 140, §§ 121, 129B, 129C, 131, 131A, 131E, 131P. []
  42. N.J. Stat. Ann. § 2C:58-3. []
  43. Iowa Code §§ 724.15 – 724.20. []
  44. Mich. Comp. Laws §§ 28.422, 28.422a. []
  45. Neb. Rev. Stat. Ann. §§ 69-2404, 69-2407, 69-2409. []
  46. N.C. Gen. Stat. §§ 14-402 – 14-404. []
  47. While these requirements ensure that a background check has been conducted at some point, a person may fall within a prohibited category after the license or permit is issued but before the time the person attempts to purchase a firearm. As a result, licensing laws do not necessarily prevent these individuals from accessing firearms as effectively as background checks at the time of transfer. []
  48. Nev. Rev. Stat. Ann. § 202.254. []
  49. Or. Rev. Stat. § 166.436. []