The United States Gun Control Act of 1968 mandates that persons who wish to become a firearm or ammunition dealer must obtain a Federal Firearms License (FFL) from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE). According to the National Rifle Association's (NRA) website, a dealer is defined as any person who is engaged in the business of selling firearms or ammunition at wholesale or retail, performs firearm repairs, makes special fittings or mechanisms for firearms or is a pawnbroker. Anyone who makes occasional sales, exchanges or purchases of firearms for a personal collection or a hobby, however, is not required to become federally licensed.
To be able to obtain a FFL, a candidate must be at least 21 years old and never have violated a firearms law or regulation. Additional background requirements for potential firearms dealers include never being convicted of a crime that carries a prison term exceeding one year, not being a fugitive or illegal alien, not being a user of illegal drugs, never being diagnosed with mental illness or been in a mental institution, never been dishonorably discharged from the military or have a court restraining order regarding an intimate partner or child of such a partner. The federal firearms license candidate will also have to certify that he has a premises with an enduring structure where he will be conducting business, and that the business will be conducted in accordance with all local and state laws. Notification of intent to become a firearms dealer must be sent to the local chief law enforcement officer and all requirements are to be met within 30 days of application approval.
Applicants must submit ATF Form 7 (5310.12), which can only be obtained from the ATF Distribution Center or a local ATF office. This form, along with any applicable fees, a photograph and fingerprints obtained from a law enforcement agency, must be submitted to the BATFE regional office. The BATFE will then have 60 days to approve or reject to license application.
FFL's are good for three years at the specific location listed on the application and at certain gun shows. Therefore, if you wish to sell guns at multiple locations, you must obtain a separate license for each location. Records and inventory are subject to annual inspections by the BATFE, or at any time in connection with a criminal investigation. Licensees are to report any firearm thefts or losses within 48 hours and are required to keep business inventory separate from personal collections.