ATF Engaged in the Business Rollback and Online Gun Sellers

Analysis

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) wants to strip out the parts of its 2024 “engaged in the business” rule that told private gun sellers when they would be presumed to be dealing without a license. One of the presumptions slated for removal treated a seller who set up merchant services, such as card processing or a business digital wallet, to take repeated firearm payments as someone intending to profit.

The proposal, published May 6, 2026 at 91 FR 24424 under RIN 1140-AB01, would keep the dealer definition Congress wrote into the Bipartisan Safer Communities Act (BSCA) in 2022 and drop most of the regulatory text ATF built around it. Comments closed August 4. In its October 7 review of public comments on ATF’s deregulatory package, The Trace reported that the vast majority of commenters favored this change, while gun safety advocates warned it could make trafficking harder to detect. ATF had not issued a final rule as of October 22.

What the 2024 rule added on top of the statute

BSCA changed the federal test for who must hold a dealer’s license. A seller no longer needs a “principal objective of livelihood and profit.” The statute now covers anyone who “devotes time, attention, and labor to dealing in firearms as a regular course of trade or business to predominantly earn a profit through the repetitive purchase and resale of firearms,” with an exception for people who sell from a personal collection.

The Justice Department then issued the 2024 rule (89 FR 28968), effective May 20, 2024. It added a new section, 27 CFR 478.13, with fact patterns that created rebuttable presumptions. A person who repetitively resold or offered guns for resale within 30 days of buying them, or within a year if they were new in the box or the same make and model, was presumed to be engaged in the business. Seven more circumstances created a presumption of intent to profit, including securing “merchant services as a business (e.g., credit card transaction services, digital wallet for business)” for repeated firearm sales.

The 2024 rule also narrowed what counts as a personal collection, excluding guns accumulated mainly for personal protection, and limited how former licensees could sell off business inventory after closing.

What ATF would keep and what it would drop

ATF would remove and reserve section 478.13 and move three pieces into the general definitions at 478.11: the statutory dealer definition, an existing exception for estate-type auctioneers who work on commission and never take possession of the guns, and a lightly edited definition of “predominantly earn a profit.” The presumptions, the list of conduct that does not trigger them, and the rebuttal evidence list would all go.

The proposal would also limit the personal collection definition to licensees’ own collections, delete the definition of “former licensee inventory,” and strip sentences in 478.57 and 478.78 that tied a closed dealer’s resales to the presumptions.

ATF’s reasons for the rollback

ATF cites the courts first. On June 12, 2024, a federal court in the Northern District of Texas blocked enforcement against the plaintiffs in Texas v. ATF, which included Texas, Mississippi, Louisiana, and Utah, and found that several presumptions conflicted with the statute. On September 30, 2025, the Northern District of Alabama granted summary judgment in Butler v. Bondi, holding that ATF exceeded its authority.

The agency also points to its own licensing numbers. Applications for Type 01 dealer licenses fell from 7,445 in fiscal 2021 to 4,350 in fiscal 2024 and 4,160 in fiscal 2025, and the count of Type 01 licensees dropped from 52,993 to 46,072 over the same span. ATF says the rule never produced the rise in licensed dealers it was meant to create, and that an anecdotal survey of its field divisions found no civil proceeding in which the presumptions were cited.

The proposal does acknowledge a cost. ATF lists a possible “de minimis increase in risk to public safety,” because some sellers who stopped after 2024 out of caution might resume selling without a license. The preamble also says the conduct behind the presumptions remains circumstantial evidence a fact finder could weigh.

Who opposed the change

Everytown for Gun Safety Support Fund, in an August 4 comment, asked ATF to preserve the presumptions and to drop changes it said would widen the “fire-sale loophole” for closing dealers. The letter ties the 2022 law to online sales. It cites Everytown’s own 2021 study of Armslist, which found 78 percent of gun sale listings came from unlicensed sellers, and the 2019 Midland and Odessa, Texas, shooting, in which a gunman who failed a background check later bought a rifle from an unlicensed seller he found online.

The attorneys general of 21 states and the District of Columbia filed an August 4 multistate letter calling the proposal arbitrary and capricious and in conflict with BSCA. Brady and Giffords, in a joint comment, wrote that “the NPRM should be withdrawn” and urged ATF to keep the 2024 rule in full. The public docket, ATF-2026-0074, listed 718 posted comments on October 22.

What listing platforms would be working with (analysis)

Federal law puts the licensing obligation on the person doing the dealing, and marketplaces set their own rules on top of it. A final rule along these lines would change the federal reference points those rules can borrow, not the platform’s freedom to be stricter.

For platforms that already require every firearm sale to ship to a licensed dealer for the background check, the transaction path would stay the same. The effect falls on platforms and classifieds sites that allow private-party sales where state law permits. Their seller terms may cite the 2024 rule or quote its 30-day resale and new-in-box presumptions as warning signs. Those passages would describe regulations that no longer exist, and trust and safety teams would have to decide whether to keep the same signals as internal policy. ATF’s own preamble supports treating them as evidence, even without legal presumptions attached.

State law sits outside the change. States that require private sales to go through a licensed dealer or a background check apply those rules regardless of how ATF defines a federal dealer, so a platform’s state-by-state checks would carry on unchanged.

The merchant account presumption and payment providers (analysis)

The 2024 rule named a payment setup as evidence of intent to profit. Dropping it would change what ATF infers from a seller’s card account, not what payment companies require. Underwriters at firearm-friendly processors, including those reached through Blue Payment Agency, set their own licensing and documentation conditions for gun sellers, and losing a federal presumption does not loosen them. Category coding, covered in EC4IM’s report on merchant category code changes for firearm sellers, also stays under card network and acquirer control.

What the rollback would and would not change

ATF’s proposal would return the federal dealer test to the words of the 2022 statute, removing the 2024 rule’s presumptions, its narrower personal collection definition, and its limits on closing dealers’ inventory sales. ATF bases the change on court losses, falling license applications, and presumptions it says went unused in its proceedings, while Everytown, Brady, Giffords, and 22 attorneys general argue it reopens gaps that online private sales exploited. For marketplaces and the payment companies behind them, the statute, state background check laws, and their own seller policies would remain in place. What would disappear is a federal checklist, including the merchant services marker, that some seller rules may have leaned on.

ATF Would Remove the 2024 Gun Dealer Presumptions, Including One Tied to Merchant Accounts