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1 [1] (August 3, 2026)

handle is hein.crs/goveuza0001 and id is 1 raw text is: Congressional Research Se~ Informing the legislitive debate s~nee 1914 ice Updated August 3, 2026 Firearms Dealers Engaged in the Business On June 25, 2022, President Joe Biden signed into law the Bipartisan Safer Communities Act (BSCA; P.L. 117-159). Section 12002 ofP.L. 117-159 amended definitions related to firearms dealer licensure in the Gun Control Act of 1968 (GCA, 18 U.S.C. §§921 et seq.). Under the GCA, the definition of engaged in the business undergirds provisions that require persons buying and selling firearms at the wholesale or retail level to be federally licensed as firearms dealers (FFLs). Section 12002 of P.L. 117-159 amended a subparagraph of the GCA definition of engaged in the business as it pertains to federally licensed firearms dealers by striking the language with the principal objective of livelihood and profit, and replacing it with to predominantly earn a profit. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) further clarified which individuals are selling firearms to predominantly earn a profit in regulations at 27 C.F.R. §478.13, which went into effect on May 11, 2024. On May 6, 2026, ATF proposed significantly revising much of the aforementioned 2024 rule. Engaged in the Business and Licensure The GCA requires all persons engaged in the business of importing, manufacturing, and dealing firearms to be licensed as federal firearms licensees (18 U.S.C. §923). Under Section 922(a)(1)(A) of Title 18 of the U.S. Code, it is unlawful to engage in the business of importing, manufacturing, or dealing in firearms without a federal license. Offenses are punishable by up to five years of imprisonment. ATF is the federal agency that administers and administratively enforces the GCA and licenses FFLs. Section 921(a)(11) of the GCA defines the term dealer to mean (A) any person engaged in the business of selling firearms at wholesale or retail [i.e., firearms dealers], (B) any person engaged in the business of repairing firearms or of making or fitting special barrels, stocks, trigger mechanism to firearms [i.e., gunsmiths], or (C) any person who is a pawnbroker. Defining To Predominant y Earn a Profit The amendment made by P.L. 117-159 that revised the definition of engaged in business further emphasizes a profit motive as a factual circumstance requiring federal licensure as a gun dealer by defining to predominantly earn a profit to mean the intent underlying the sale or disposition of firearms is predominantly one of obtaining pecuniary gain, as opposed to other intents, such as improving or liquidating a personal firearms collection. Regarding firearms transfers related to terrorism and other criminal conduct, this definition includes the following proviso: That proof of profit shall not be required as to a person who engages in the regular and repetitive purchase and disposition of firearms for criminal purposes or terrorism. For purposes of this paragraph, the term 'terrorism' means activity, directed against United States persons, which- (A) is committed by an individual who is not a national or permanent resident alien of the United States; (B) involves violent acts or acts dangerous to human life which would be a criminal violation if committed within the jurisdiction of the United States; and (C) is intended- (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by assassination or kidnapping. This provision is designated in the GCA as Section 922(a)(22) of Title 18 of the U.S. Code, and the definition of with the principal objective of livelihood and profit as it applies to licensed manufacturers and importers is codified at Section 922(a)(23). Shift in Focus from L vel hood to Profit Amendments made by P.L. 117-159 shifted the focus of the GCA dealer licensing requirement onto an intent to seek a profit by eliminating the principal objective of livelihood as a condition for licensure. For federally licensed firearms and ammunition manufacturers and importers, the principal objective of livelihood and profit remains a central condition requiring licensure. For federally licensed gun dealers, to predominantly earn a profit is now the central condition requiring licensure. The amendments made by P.L. 117-159 are intended to require persons who buy and resell firearms for profit to be licensed federally as gun dealers, even if they do not do so with the principal objective of livelihood. The definitional changes in P.L. 117-159 make some, but not all, intrastate private firearm transfers subject to GCA recordkeeping and background check requirements if those transfers are made by profit-oriented, repetitive firearms buyers and sellers. Such transfers were not necessarily covered under previous law if they were not also made for