Although selling scrap metal may be a legitimate occupation, thieves often damage abandoned property while illegally removing metal. This illegal practice lowers the value of the property and makes it harder to resell. Thus, states enact laws regarding scrap metal dealing to try to deter thieves from stealing metal.
Although not all states require scrap metal dealers to have licenses, many states require dealers to keep accurate records of from whom they purchased scrap metal and how much they paid for it. Some states, such as Indiana, require scrap metal dealers to photograph the seller and record his name, while other states just require the dealer to keep a log of purchases and sales. State laws vary as to whether dealers must present identification when re-selling scrap metal.
Some states regulate turning vehicles or other property into scrap metal. These regulations help discourage thieves from stealing items, processing them into scrap metal and re-selling the metal. Illinois, for example, requires dealers to get a special license before they can purchase vehicles for the purpose of turning them into scrap metal. Several states, such as Kansas, New Jersey and Rhode Island, require metal recyclers to have licenses or otherwise proof that they are authorized to recycle metals.
Most states that require licenses do not give them to individuals -- they give scrap metal licenses to businesses, which can then employ and authorize people to purchase items and process them into scrap metal. Thus, if your state requires you to get a scrap metal license, you must first get a business certificate, which grants you the right to do business in your state.
If your state requires you to have a scrap metal license, processing or selling scrap metal without one can land you in jail. Many states consider illicit selling of scrap metal to be a crime; for example, in Georgia metal theft comes with a sentence of up to five years in jail or a fine of $5,000. Taking metal from property without proper authorization can also leave you liable for any damage to the property.