May 12, 2021
Ghost Guns are a Gun Control Boogeyman
Americans have always had the ability to legally make firearms on their own and some choose to do so as a hobby. It has not created a wave of “ghost guns.” It has allowed individuals who are passionate about building their own firearms to assemble them in their homes. This is the exception, not the rule. The overwhelming majority of firearms are bought through commercial sales, produced by manufacturers and sold by retailers that are federally licensed and regulated.
What is not legal is manufacturing firearms without a federal license. As established by the Gun Control Act of 1968, federal law requires a license to engage in the business of dealing firearms.1 The phrase at stake is “engaged in the business,” which is defined in current Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) regulations. The phrase “engaged in the business,” as applicable to a firearms retailer, 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.2
In order to comply with the law, a new retailer would need to apply for and obtain a license, including paying the required fees and submitting to a background check and fingerprinting, comply with state and local laws (including state licensing in the 15 states where required), local business laws, and zoning laws which may or may not allow the individual to operate what would likely be a home-based firearms business. The “licensed premises,” likely the gun owner’s private home, would have to be open to ATF inspection once a year.
ATF policy for many years has been that the licensed premises must be open to the public. Indeed, item 11 of ATF Form 7, Application for License, requires applicants to list hours of operation for all seven days. Applicants would have to get ATF approval to operate by appointment only.
Among myriad other requirements, the new licensee must keep and maintain for life federally mandated records on the acquisition and disposition of firearms and must keep any Form 4473 for at least 20 years.3 All firearms in their collection which are for sale would have to be entered into the acquisition and disposition record. In addition, they would have to register with the Federal Bureau of Investigation’s background check system, the National Instant Criminal Background Check System (NICS), request the FBI or Point of Contact (POC) state to run the background check for each transfer, report to ATF and their local chief law enforcement officer on the multiple sale of handguns to the same person within a 5 day period, report lost or stolen firearms to the ATF and to local authorities within 48 hours, and provide Youth Handgun Safety Act notices and a gun safety device with each handgun sold. When a licensee goes out of business, which might include any year that they would dispose of fewer firearms than the number established by regulation, it must send its required records to the ATF Out of Business Records Repository.
Firearms are not the only area where such a distinction exists between a hobby and a business. Consider the fact that it is perfectly legal to prepare dinner for one’s family and friends in one’s home without a federal license. Yet, if the same person decides to open a restaurant and prepare the same food for others as a business, that business is subject to a set of laws and regulations designed to keep the restaurant industry safe. Federally licensed firearms retailers are committed to following the laws and regulations that apply to their businesses.