The "engaged in the business" rule: vacated in Texas, with a narrower proposal pending

ATF’s 2024 rule on when someone is "engaged in the business" of dealing in firearms, and so needs a license, is no longer in force. On June 12, 2026, the U.S. District Court for the Northern District of Texas vacated it in Texas v. ATF, and on August 13 the court refused the Justice Department’s request to keep parts of it alive. Separately, ATF has proposed a narrower version of its own.

What the 2024 rule did

The Bipartisan Safer Communities Act of 2022 changed the statutory test from selling "with the principal objective of livelihood and profit" to selling "to predominantly earn a profit." ATF’s 2024 rule added definitions and a set of rebuttable presumptions: situations in which a seller was presumed to be engaged in the business unless they could show otherwise.

What ATF has proposed

On May 6, 2026, ATF published a proposed rule (docket ATF-2026-0074) that would remove the 2024 presumptions and several added definitions while keeping the statutory definition Congress wrote in 2022. ATF said the 2024 changes had not had the expected effect on license applications, enforcement actions or forfeitures. Comments closed August 4, 2026. It is a proposal, not a final rule.

What it means for a licensed dealer

• The people this rule is about are your customers who sell a few guns a year. Expect questions, and send them to the statute and a lawyer rather than giving advice at the counter.
• Your own obligations do not change: you are licensed, and your records and background check requirements apply as before.
• Some frequent sellers will decide to get licensed. A home-based FFL is a common path, and here is what it takes beyond the license.
• State law is separate, and some states define dealing more broadly than federal law does.

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