Auctioneers seem to always be looking for a “work-around” in regard to federal and other laws regulating the sale of firearms at auction.
Let me begin with this: generally this type of thought process is not a bad thing — “Is there a better way to do this?” “Wonder if I can find a way to …?” Except, in this case, the rules are fairly clear and the downside is significant.
Our topic today is one of many such proposed work-arounds where a site away from a Federal Firearms Licensee’s premises is used as a “qualified event” to allow both the sale and transfer of firearms at that [alternate] location.
Therefore, the two questions become: Does federal law define what a qualified event is?” and “Can an auction be considered a qualified event?” The answers to those two questions are: “Yes, federal law does define a qualified event, and it seems highly doubtful an auction can be considered one.” Specifically, federal law 27 CFR 478.100 – Conduct of business away from licensed premises — dictates what a “qualified event” for firearm sales is:
A gun show or an event is a function sponsored by any national, State, or local organization, devoted to the collection, competitive use, or other sporting use of firearms, or an organization or association that sponsors functions devoted to the collection, competitive use, or other sporting use of firearms in the community (provided, that such business shall not be conducted from any motorized or towed vehicle.)
Certainly it appears an event already deemed as qualified could include an auction, but that isn’t our question today. Can an auction itself be considered a qualified event? Despite a few ATF agents apparently confirming this is possible, it defies the definition in federal law which clearly denotes the opposite view.
Auctioneers might think they can be involved with the “collection, competitive use, and or other sporting use of firearms” but the federal law says “devoted to” in two distinct places. In other words, as an auctioneer, are you devoted to such? Is your time and attention given over to such collection, competitive use … without regard to other activities or business ventures?
We have written several times about auctioneers selling firearms at auction; most notably:
15 things: https://mikebrandlyauctioneer.wordpress.com/2016/01/11/15-things-about-auctioneers-and-guns/
A guide: https://mikebrandlyauctioneer.wordpress.com/2010/01/17/a-guide-for-auctioneers-selling-guns/
With FFL help: https://mikebrandlyauctioneer.wordpress.com/2015/08/17/auctioneer-with-the-help-of-an-ffl/
Acting as: https://mikebrandlyauctioneer.wordpress.com/2014/09/29/we-are-and-we-arent-acting-as-an-ffl/
How it works: https://mikebrandlyauctioneer.wordpress.com/2016/08/27/how-does-auctioneer-ffl-licensing-work/
As well, we’ve previously noted that the penalties for “engaging” without a license (or conducting business away from a licensed location) can include prison time and/or fines. On the other hand, a three-year Dealer (01) license is only $200 and then $90 to renew it every three years thereafter — and after that it is as simple as conducting business at that licensed location.
Finally, it is often suggested that local or state laws apply here and that’s generally not correct. States and other non-federal political subdivisions can make requirements more restrictive (although not unduly burdensome) but per the Supremacy Clause cannot invalidate federal law.
A general rule I suggest for auctioneers considering any number of “work-arounds” in regard to selling firearms at auction is to spend more time focusing on complying with the law, rather than spending time trying to defy it. The licensing requirements are indeed fairly straightforward and the exemption for non-licensees to sell firearms is reasonably succinct.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and Faculty at the Certified Auctioneers Institute held at Indiana University.
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