If you live in Iowa and own a firearm, you probably don’t need a license to sell that firearm to another Iowa resident. The law is more complicated if you are in the business of selling firearms.
A firearms dealer needs to obtain a Federal Firearms License (FFL) from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Knowing whether a seller needs to have an FFL can help sellers avoid federal prosecution for selling firearms without a license.
Who Needs an FFL?
You need an FFL to manufacture or import firearms. You also need an FFL if you sell firearms as a dealer. But what if you buy a few guns every year and eventually sell them to other people? Do those sales make you a dealer?
A dealer is someone who is in the business of selling firearms. If you regularly buy and sell guns for the purpose of making a profit, you need an FFL. If you occasionally buy and sell guns and aren’t trying to support yourself by doing so, you might not need an FFL. The risk is that your perception of your gun selling might not match the ATF’s perception.
There is an obvious gray area between “regularly” and “occasionally.” There is also a gray area between earning a living and engaging in a profitable hobby. The line between pursuing a business and pursuing a hobby isn’t always clear. The closer you get to that line — the more guns you sell and the more money you make doing it — the more likely it becomes that you should be licensed.
Collectors can sell their collections without obtaining an FFL. Claiming that you are purchasing guns for a collection and quickly selling them for a profit is the kind of questionable behavior that gets unlicensed sellers charged with federal crimes.
Eligibility for an FFL
A variety of different licenses authorize license holders to sell, import, or manufacture guns, ammunition, and destructive devices. Most applicants will want a Type 01/02 license, which authorizes the license holder to sell firearms other than destructive devices. A Type 01/02 license also authorizes certain gunsmithing activities.
Most people who have reached the age of 21 are eligible for a Type 01/02 FFL. However, you are not eligible if you:
- have a felony conviction;
- were convicted of any other crime that makes it unlawful for you to possess firearms;
- violated the federal Gun Control Act in the past; or
- made a false statement or omitted required information on your application for an FFL.
You also need a place from which to conduct your business lawfully. If you live in a place that is not zoned for commercial activity, for example, you probably cannot obtain an FFL with the intent to sell guns from your home. Some zoning laws specifically regulate the areas in which guns can be sold. You need to have a place to make sales that complies with those laws to qualify for an FFL.
Read also How Do I Register My Firearm or Remove My Name from a Firearms Registration in Iowa and 5 Things to Know About Gun Laws in Iowa blog posts.
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