It isn’t the gun people’s loophole

The “gun show loophole.” You’ve heard about it over and over and over and…

If you’re a gun guy, you get annoyed and explain that there is no such thing as a “gun show loophole” that lets unlicensed dealers sell guns at shows without background checks. After all, 18 U.S.C. § 922(a)(1)(A) says that anyone engaged in the business of selling guns must be licensed (and thus must run background checks). It doesn’t matter whether that FFL sold the gun in his store, at a gun show, online, or in a back alley at midnight.

So… No loophole, right? The victim disarmers are simply lying to confuse the ignorant about occasional private sellers and dealers. Yes, but…

There is a loophole. But it’s the government’s loophole. 18 U.S.C. § 921(a)(21) defines “engaged in the business”: 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;

If you’re making repetitive sales to make money, you’re a dealer and must get a license no matter where you conduct your business. Occasional sales, liquidation of a personal collection, maintaing and tuning a hobbyist’s collection… none of that requires an FFL because you clearly aren’t a dealer.

Where’s the “loophole” that lets a dealer skip background checks?

In the 1990s Prez Billy Jeff Clinton decided there were too many Federal Firearms Licensees. In short, a bunch of folks who would normally be considered hobbyists or collectors had gotten FFLs so that if the occasion arose, they could make a little profit, and because it made interstate shipping easier. Note that they still had to do all the record-keeping, reporting, and checking as any FFL with a store on main street.

But Cigar-Boy and the ATF didn’t like that situation: 250,000 FFLs meant it was convenient (and competitive) for honest people to lawfully purchase arms. So they changed the definition of “engaged in the business” to “engaged in enough business, and in the right places.”

Worked out of your home? Scratch that FFL. The ATF began coordinating with local zoning authorities and you had to prove your home was zoned (or a variance granted) for a business, even if you only did business at gun shows.

Didn’t sell enough guns in a year to make a profit? You’re just a lowly collector, not really in the business. There’s goes another FFL.

And that’s when the ATF started with the insane form 4473 enforcement: wrong color pen used to fill it out? Lose your license. Customer wrote “Y” instead of “Yes”? Lose your license. Bound book got updated the next morning rather than at closing in the evening? Yep, another FFL bites the dust.

We went from roughly 250,000 FFLs in the 1990s to approximately 50,000 today.

FFL-chart

But let’s say you got a zoning variance for your home business. You do a lot of business; in fact, you make a decent fortune every year selling guns at shows across the midwest. Your paperwork is perfect. You won’t even release a firearm after the three-day background check hold if you don’t hear back positively. Sure was a good thing you got that FFL, eh?

Nope. Because you got trapped by the ATF’s loophole.

ATFform7-Gun-Show-Loophole

Yes, take a look at item 18a on the ATF form 7. Despite doing business, the ATF will not issue you a license. They pulled out of their asses invented a new condition not in law: a physical store front.

Gun shows don’t count. Except when they do, when people whom the ATF told weren’t really dealers got busted anyway. For doing what the ATF said was okay.

The Gun Show Loophole: ATF: “You’re a dealer any time we need some publicity and arrests for promotion points.”
Now, after decades of the Clinton rules on dealers, President TelePrompter says he’s going to make those terrible “gun show dealers” get FFLs so they have to run background checks. I hope he remembers to tell the ATF to take that restriction off of 18a, and start accepting those applications.

If so, I’ll think about getting a license myself. I’ve run across some particularly good deals on guns that I could have turned around for a profit. It might be nice to be able to take advantage of that without the ATF busting me. History suggests that 200,000 other people would also consider it.

Somehow, when if the number of FFLs increases five-fold, I don’t think the extra 230 NICS workers are going to be sufficient.

FBI background checks Dec 2015_0

A five-fold FFL increase probably won’t translate into a five-fold NICS traffic increase, but somehow I don’t think they be able to keep up. (Something to bear in mind when you hear about bills to increase the NICS-delay time to 25 days and beyond.)

In fact, I don’t think the ATF will issue those licenses. Instead of letting people operate legally as they wished to do, it’s far more likely that they’ll crack down further on the honest folks they’ve been denying FFLs. That’s why Barrycade is authorizing an additional 200 ATF goons, instead of clerks to process applications.

Obama’s self-admitted goal is not to get more dealers licensed and into compliance. Clerks would do that. He’s just looking to crack down on honest sales.

“It’s a little bit harder to get a gun.”
[…]
“It may be a little more diffult and a little more expensive. And the laws of supply and demand mean that if something’s harder to get and a little more expensive to get then fewer people get them.”

Barry, allowing me to introduce you to another little economic tidbit:

The black market
When he makes transactions difficult and expensive, he makes the black market cost effective. It worked for the War On (Some) Drugs. Fortunately for honest people who want defensive tools, the black market for firearms is already well established.

Now there’s a loophole.

“Smitty,what do you think of these trick rules the new Head has thought up? Should we knuckle under, or make a squawk”?

“Squawk? What for?” Smythe gathered up his tools. “There’s a brand-new business opportunity in each one, if you only had the wit to see it. When in doubt, come see Smythe — special services at all hours.”
Robert A. Heinlein, Red Planet

If he’s crazy enough to reverse the Clinton rules, we can make him look darned silly. Not just salesman of the year, but FFL recruiter of the century.

Sadly, he won’t. That’s talk. The real clue is: 200 new agents, not 200 clerks.

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2 thoughts on “It isn’t the gun people’s loophole”

  1. Thank you, Carl for tackling this disgusting history. Although I, by being utterly anal in my operations, dodged several of their carefully constructed traps, and continued for about a dozen years, what you’ve described is EXACTLY what I lived through as a Federal Firearms Licensee. At every renewal I would ask myself one question; “Does my being a “Licensee”, on balance, advance human liberty, or harm it?” One day the answer was the latter.

  2. ill be ok with background checks on guns when they start doing background checks for abortions seeing as the body count for abortion compared to guns in america is like 100:1

    (shhh…a little secret: abortion isnt in the 14th amendment…it took 7 idiots in black robes 100 years to find it there…dont tell anybody…its a secret…)

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