Last updated August 2026 · By Nick Hall, tracks federal and state firearms policy daily for USA Gun Shop readers
Quick take: A federal judge has issued what looks like the final ruling against the ATF engaged in the business rule, the 2024 regulation that redrew the line between a private seller and an unlicensed dealer. The rule has been enjoined in pieces for over a year. This one closes it out.
- Ruling: The engaged in the business rule cannot stand, ending a regulation that has been partially enjoined across multiple states since 2024.
- Court: A federal district court, in one of several parallel challenges brought by state attorneys general and gun rights organisations.
- Why it matters: The rule made a private seller a presumptive unlicensed dealer on facts as thin as selling firearms shortly after buying them.
- What’s next: The statutory definition set by the Bipartisan Safer Communities Act remains law, so the underlying question does not disappear with the rule.
This one matters less for what it changes today than for who it stops threatening. The rule never reached the man with a table at a gun show. It reached the man selling three rifles out of his safe to fund a fourth, and it told him a jury might call that a business.
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Table of Contents
What Predominantly Earn a Profit Actually Meant
The Bipartisan Safer Communities Act of 2022 changed the statutory test at 18 U.S.C. § 921(a)(21) for who needs a federal firearms licence from a person who devotes time, attention and labour to dealing as a regular course of trade with the principal objective of livelihood and profit, to a person who does so to predominantly earn a profit.
That is a real change and Congress made it. The problem was what ATF built on top of it in 2024. The rule established presumptions: sell a firearm within a year of buying it and you were presumptively in the business. Sell more than one of the same model. Maintain records that looked like inventory. Any one of those could flip a private citizen into an unlicensed dealer, which is a federal felony.
Collectors reorganising a safe do all of those things. So do people who buy a gun, shoot it, decide they dislike it and move it on, which is roughly the entire used market.
Why It Kept Losing
Courts kept finding the same two problems. The presumptions inverted the burden, requiring a citizen to disprove commercial intent from ordinary conduct. And the rule reached past the statutory text it claimed to implement, which is the recurring structural failure across every ATF rule that has fallen this month.
Multiple states obtained injunctions through 2024 and 2025, producing a map where the same private sale was presumptively criminal in one state and unremarkable across the line. That patchwork was never sustainable and the government never had a good answer for it.
The Collector Problem in Plain Numbers
Consider an ordinary collector. He buys four rifles in a year at auction, decides two of them do not suit him, and sells those two within eleven months to fund the next purchase. Under the rule, both sales landed inside the one-year presumption, both were of firearms he had bought rather than inherited, and the pattern across a decade would look to a prosecutor like inventory turnover rather than a hobby.
Nothing in that description involves a single sale to a prohibited person, a single untraceable firearm, or a single dollar of undeclared income. It describes what collecting is. The rule’s defenders never had a satisfying answer for how a presumption drawn that broadly was supposed to distinguish him from an actual unlicensed dealer, and neither did the government’s briefs.
Why the Patchwork Was Never Going to Hold
The injunction map this rule produced was genuinely strange. By late 2025 a private seller in one state faced a presumption of unlicensed dealing on conduct that was entirely unremarkable across the state line, and in several cases the distinction turned on whether the seller happened to be a member of an organisation that had won relief.
Federal criminal liability is not supposed to depend on your membership of a trade association. That the rule produced that outcome for the better part of two years is its own argument, separate from the merits, and it is one courts noticed.
What Has Not Changed
The statute is untouched. Predominantly earn a profit is still the test, and a person genuinely running an unlicensed dealing operation is still committing a federal crime. What has gone is the regulatory scaffolding that let a prosecutor build that case out of a collector’s ordinary behaviour.
And state law is entirely unaffected. Several states require every transfer to go through a licensed dealer regardless of what federal law says about who is in the business. If you live in one of those, nothing about your private sale obligations changed this week. Check your state’s rules before you rely on any of this.
The safest posture has not moved either. Running a private sale through a licensed dealer costs about the price of a box of ammunition, produces a background check and a paper trail, and removes the entire category of argument this rule was built on. It was good practice before the rule and it is good practice now.
There is a second-order effect worth watching as well. The rule pushed a measurable amount of private-party trade toward licensed dealers, because sellers who could not read the line chose the option that did not carry a felony attached to guessing wrong. Some of that volume will drift back to private sale now, and the dealers who built consignment business on the back of the rule will feel it before anybody publishes a number.
Congress wrote the test. ATF wrote the trap. The courts took the trap away and left the test standing, which is roughly what should have happened in 2024.
Frequently Asked Questions
What was the engaged in the business rule?
A 2024 ATF regulation implementing the Bipartisan Safer Communities Act's revised definition of a firearms dealer. It created presumptions under which private sellers could be treated as unlicensed dealers based on conduct such as reselling a firearm within a year of buying it.
Can I sell a gun privately now?
Federal law still prohibits dealing in firearms without a licence, and that has not changed. What has gone is the rule's presumptions. Your state may separately require every transfer to run through a licensed dealer, and many do.
Does this affect the Bipartisan Safer Communities Act?
No. The statutory definition Congress enacted in 2022 remains law. Only the ATF regulation built on top of it has been struck down.
How many firearms can I sell before I need a licence?
There is no number in the statute and never has been. The test is whether you are dealing predominantly to earn a profit, judged on all the facts. The rule's attempt to supply bright lines through presumptions is what the courts rejected.
Was the rule already blocked before this ruling?
Yes, in parts. Multiple states obtained injunctions across 2024 and 2025, producing an inconsistent map where the rule applied in some states and not others. This ruling closes it out more broadly.
Do I still need to keep records of private sales?
Federal law does not require a private seller to keep records, but keeping a bill of sale is sensible practice and some states require documentation. It is also the cleanest evidence that a transfer was what you say it was.
Is an appeal likely?
Possibly, though the Justice Department declined to appeal a separate adverse firearms ruling this month, which makes the government's posture harder to predict than usual.
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