The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) continuously revises its regulations to address the evolving landscape of firearm sales in the United States. One of the most significant recent changes is the revision of what it means to be “engaged in the business” of dealing in firearms, as outlined by the ATF. This amendment, influenced by the Bipartisan Safer Communities Act (BSCA), broadens the definition significantly, potentially impacting many Federal Firearms License (FFL) dealers and unlicensed individuals involved in firearm sales. This blog explores these changes, discusses their implications, and suggests how Coreware’s coreSTORE can help dealers stay compliant and efficient.

Understanding the ATF's New Rule Changes

Historically, the term “engaged in the business” referred primarily to individuals who earn their livelihood wholly or partly by buying and selling firearms. The ATF’s recent regulatory changes, proposed in response to the BSCA, aim to close loopholes that allowed many to sell firearms without proper licensing or background checks. Specifically, the rule change extends the definition to include anyone 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.”

This expansion means that many activities previously considered hobbyist or occasional transactions might now require an FFL, depending on their frequency, intent, and scale. The rule change aims to enhance public safety by ensuring that all individuals regularly buying and selling firearms are licensed and therefore subject to regular inspections and compliance checks by the ATF.

Detailed Implications for FFL Dealers

The implications of these regulatory adjustments are broad and multifaceted. For current FFL dealers, the rule change will likely necessitate more rigorous compliance measures to ensure that all transactions meet the updated requirements. Dealers will need to scrutinize their sales practices and consider the frequency and nature of their firearm transactions to determine if they fall within the newly expanded definition of being “engaged in the business.”

For individuals previously operating without an FFL, such as those selling firearms at gun shows, online, or from personal collections, the new rule could mean that obtaining an FFL is now necessary. This shift not only impacts the legality of their operations but also subjects them to the compliance and recordkeeping standards that current FFL holders already meet.

Additionally, the rule change might affect the broader firearms market by potentially reducing the number of unlicensed transactions, thus funneling more sales through licensed dealers. This could increase competition among licensed entities and possibly impact firearm prices and availability.

Compliance Challenges and Strategic Opportunities

With the expansion of the definition of “engaged in the business,” many dealers will face significant compliance challenges. These include maintaining meticulous records, conducting mandatory background checks on all sales, and managing more detailed inventory controls. Failure to comply with these stringent requirements can result in severe penalties, including fines and revocation of the FFL.

However, these challenges also present strategic opportunities for FFL dealers. For instance, by enhancing their compliance frameworks, dealers can build stronger relationships with customers and law enforcement, highlighting their commitment to safety and legal operations. This trust can be a powerful differentiator in the marketplace, potentially attracting more customers who value transparency and legality.

Furthermore, the increased need for compliance supports a market environment that favors established, well-organized businesses over informal or part-time dealers. This shift could lead to market consolidation and potentially more stable business operations for full-time, compliant dealers.

Coreware’s coreSTORE: Enhancing Compliance and Efficiency

As the regulatory environment becomes more complex, having robust tools to manage compliance effectively becomes crucial. Coreware’s coreSTORE offers a comprehensive solution specifically designed to meet the needs of firearms dealers navigating these new ATF regulations.

Features of coreSTORE:

• Automated ATF Compliance: coreSTORE automates essential compliance tasks such as the creation and management of ATF Form 4473 and maintains a digital, easily auditable bound book that helps dealers ensure they meet all record-keeping requirements.

• Advanced Inventory Management: The system provides realtime tracking of inventory levels, sales, and purchases. It alerts dealers to stock shortages or discrepancies, ensuring that inventory records are accurate and up-to-date, which is critical for ATF compliance.

• Integrated Background Checks: coreSTORE integrates directly with the National Instant Criminal Background Check System (NICS), simplifying the process of performing background checks required for firearm sales, reducing errors, and saving time.

Conclusion

The ATF’s recent regulatory changes mark a significant shift in how firearm sales are managed and regulated across the United States. These changes highlight the need for rigorous compliance systems and underscore the importance of professionalizing firearm sales to enhance public safety.

Coreware’s coreSTORE is ideally positioned to help dealers adapt to these changes, ensuring they can meet new compliance demands efficiently and effectively. By leveraging technology to streamline operations and maintain compliance, Coreware helps dealers focus more on growing their business and less on managing regulatory challenges.

For more information on how coreSTORE can help you navigate these new regulations, visit our website or contact our support team for a personalized consultation. As the landscape evolves, Coreware remains committed to providing solutions that support our clients' success and compliance.