Editor’s Note: In addition to his work at The Dispatch, Kevin D. Williamson is a writer in residence at the Competitive Enterprise Institute, in which capacity he has written about a number of subjects, including climate policy and regulation, for a number of publications. This series on the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and firearms regulation is part of that work. In today’s installment, Kevin meets with a firearms dealer to discuss the regulatory challenges that gun shops have to contend with.
Part 2: The ATF Is a Tax Collector
“There’s so much gray,” says J.D. “I want black and white.” J.D. is irritated enough by the ATF to talk to the press about it and worried enough to request anonymity. Guns are not his entire business, but they are about 40 percent of it, and the economy is not going gangbusters in his particular corner of these fruited plains. COVID lockdowns wiped out the business he owned before his current one, and gun sales are not great for him right now, either. If you want a leading economic indicator for life in rural or small-town America, ask a gun dealer how many new firearms he’s selling—or a pawnbroker how many used ones he is buying.
J.D. cannot afford uncertainty. It is a tax that takes food off his table.
“Take the braces—so much gray,” he tells me. “Is it legal? Is it not? If I receive a transfer from GunBroker [a popular online gun shop], do I need to yank that brace off there immediately? Once that started getting wrapped up in litigation, that’s where I was left as a dealer going ‘No! No! No!’ I don’t even want it in here, even though it may have been legally perfectly fine at the time. It was gray.”
For J.D., regulatory uncertainty means passing up sales—not only of firearms but also of services. Here is a thing you may not know: Anything that goes into a federally licensed firearms dealer (FFL) for repairs becomes, as a legal matter, the FFL’s responsibility if it stays in the business’s custody for 24 hours. If that happens, then the shop has to do a background check and a legal transfer before returning the repaired firearm to the customer, as though it were selling it for the first time. J.D. does some basic repairs and work, and he could do a lot more, but he doesn’t want the risk—and he doesn’t want to charge his customers what amounts to a penalty to cover his regulatory hassles. “We charge $25 for a transfer,” he says. “What am I going to do? Charge $30 for a $5 part that takes five minutes to put in? I’d like to do more of that kind of work, but it feels wrong, and, if I start screwing people, they’re not going to come in here.”
Another stymied part of J.D.’s business is transfers. As mentioned earlier in the series, you can buy a firearm online, but it will go to an FFL, who will put you through the background check and paperwork as though he were selling you the firearm himself—which, in effect, he is. Many small businesses such as J.D.’s supplement their incomes that way, and a few businesses are really just transfer agents, receiving shipments and running background checks, performing transfers for a fee with no inventory of their own.
But there are risks.
As also mentioned earlier, an FFL can get into trouble if he transfers a firearm that is perfectly legal in his state to a resident of another state in which the item is prohibited. A lot of dealers in places with transient populations—college towns, towns near military bases, etc.—make a lot of sales to people with out-of-state IDs, but it is a risk. J.D. won’t do it at all. If somebody shows up to pick up a transfer with an out-of-state ID, he gives them six months to become a resident of his state and pick up the firearm, after which he charges them “rent” on the item, in the form of a percentage of its value, until that rent reaches the firearm’s value, at which point J.D. sells it. There isn’t much he can do: He isn’t going to risk the out-of-state sale and generally can’t send it back to the original vendor under the terms of the sale. At any given time, his little shop is home to some amount of effectively unsellable inventory.
“That’s how they got rid of 80-percent receivers, too,” he says. He is talking about the partially finished receivers—the main body of the firearm to which most of the other components are attached—that are purchased by hobbyists building their own firearms, which is a perfectly legal thing to do. There are people who do not want that to be a perfectly legal thing to do, but those people have not yet succeeded in passing a law against it. They can still make it difficult and risky to engage in the business, though. “They [the ATF] put that on the dealer. I can sell you an 80-percent gun, but then I have 30 days to report to the ATF what serial number you put on [the finished firearm]. That’s on me, not on you. It’s pretty smart on their side. Sneaky.”
J.D. would also like to get into the business of selling suppressors, which are another “National Firearms Act item” under U.S. law. Because so many people think that suppressors in the real world perform like they do in James Bond movies—a discreet “pew! pew!”—Americans have to jump through bureaucratic hoops to buy safety gear that is sold over the counter in many European countries and required at some European gun ranges. In reality, suppressed firearms are often still so loud that you cannot fire them safely without hearing protection—the suppressors do reduce the sound, but they do not eliminate it or, in most cases, even reduce it as much as inexperienced people would expect. Suppressors are a pretty good business, but dealing in them would require J.D. to get a different kind of license than the one he already has and, so far, he hasn’t judged it worth the hassle.
Think about that for a second: This is a small-business owner who has gone through a thorough federal background check selling common sporting goods to people who go through federal background checks, customers who have clean criminal and mental-health records, and he is passing up business—both in merchandise and in services—purely for regulatory reasons. And, in some cases, he is responding to legal burdens that nobody ever voted for and that Congress never passed—purely administrative creations like the pistol-brace rule.
If J.D. were a baker selling organic croissants in downtown Washington, D.C., and having to tell his customers that he would like to sell them coffee and muffins but can’t because of some legal ambiguity in the high-carbohydrate assault-pastry industry, people would get why that’s a problem. They might not necessarily take the next step and support the kind of reform agenda that is top of mind for libertarian critics of the administrative state, but they would understand the economic problem with that kind of uncertainty and regulatory ad-hocracy. But even though there are good-faith actors on the prohibitionist side, in the most fundamental sense gun regulation isn’t about crime or public safety—it is almost purely a culture-war industry, and the partisans on the other side despise people such as J.D. and his customers. Every time one of them goes out of business, they do a little happy dance.
Hence the Biden administration’s “zero tolerance” policy at the ATF.
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