top of page
  • Writer's pictureMike Brandly, Auctioneer

The ATF Rul. 96-2 Confusion


In the United States, the Federal agency known as the ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) within the United States Department of Justice regulates the sale of firearms.

Auctioneers sell firearms in a variety of circumstances. The laws in this country say that if an auctioneer is “engaging in the business” of selling firearms, a license is needed.

In contrast, if the auctioneer is not engaged in the business of selling firearms, no license is required.

How does an auctioneer know if he is engaged in the business of selling firearms? The criteria the ATF uses includes an affirmative answer to any of these questions: Does the auctioneer …

  1. Possess firearms belonging to others?

  2. Buy and sell firearms, as a business?

  3. Hold oneself out as a dealer in guns?

  4. Make a living in dealing in guns?

  5. Repeatedly assist the same seller with the sale of their guns?

  6. Conduct a gun consignment auction, or take gun consignments?

Further, we’re written extensively about auctioneers selling firearms (guns) at auction. Our most cited source is:

This is the law in the United States; it would seem to me this is fairly clear. Yet, auctioneers asked the ATF for clarification and now it isn’t as clear. Why is that? We didn’t ask the right questions.

Here is the first three paragraphs of ATF Rul 96-2 which indicates that we suggested there were basically two types of auctions in the United States: estate-type and consignment-type.

ATF Rul. 96-2 An association of auctioneers has asked the Bureau of Alcohol, Tobacco and Firearms (ATF) for a ruling concerning the auctions conducted by their members and whether the sale of firearms at such auctions requires a Federal firearms license as a dealer in firearms. The auctioneers’ association stated that their members generally conduct two types of auctions: estate-type auctions and consignment auctions. In estate-type auctions, articles to be auctioned, including firearms, are sold by the executor of the estate of an individual. In these cases the firearms belong to and are possessed by the executor. The auctioneer acts as an agent of the executor and assists the executor in finding buyers for the firearms. The firearms are possessed by the estate and their sale to third parties is controlled by the estate. The auctioneer is paid a commission on the sale of each firearm by the estate at the conclusion of the auction. The association states that, in consignment-type auctions, an auctioneer may take possession of firearms in advance of the auction. The firearms are inventoried, evaluated, and tagged for identification. The firearms belong to individuals or businesses who have entered into a consignment agreement with the auctioneer giving the auctioneer authority to sell the firearms. The agreement states that the auctioneer has the exclusive right to sell the items listed on the contract at a location, time, and date to be selected by the auctioneer. The consignment-type auctions generally involve accepting firearms for auction from more than one owner. Also, these auctions are held on a regular basis, for example, every 1-2 months.

In this regard, I can tell you with certainly that auctioneers indeed believe there are generally two types of auctions they conduct. Basically either the auction is at the owner’s location (where the single owner maintains possession) or the auction is at the auctioneer’s [or other] location (where there are sometimes multiple sellers and the auctioneer takes possession.) The line in reality is not an “estate-type auction versus a consignment-type auction.”

If we would have asked the right questions maybe we would have received the right answers? I suspect the ATF would have told us that indeed an onsite auction where the seller maintains possession does not require a license, and consignment-type auctions where the auctioneer takes possession and/or there are multiple sellers does require a license. Maybe they would have said it this way:Held: Persons who conduct on-site auctions at which the auctioneer assists a single owner in selling the owner’s firearms, and the firearms are possessed and transferred by the owner, do not require a Federal firearms license.Held further: Persons who conduct auctions away from the owner’s property, for example, at a gallery or auction house — or conduct auctions for multiple sellers — where the auctioneer takes possession of the firearms pursuant to a consignment contract, are required to obtain a license as a dealer in firearms.

Of course, if the auctioneer satisfied any of the six aforementioned licensing criteria, then a license would be required regardless.

Why do I think the ATF would answer these (better) questions in this fashion? Because they already have at numerous auctioneer seminars and conventions around the United States. The people the ATF designate to talk with auctioneers almost always have these same views of the current law, and express them remarkably the same as I have here.

Do regulatory agencies interpret laws differently than they were possibly meant? Do courts often rule that a law seemingly clear has indeed another meaning? It seems the 2nd Amendment teeters between individual right theory and collective right theory each time the Supreme Court changes majorities. Differing opinion about the exact meaning of many laws is common.

Legal interpretation is more an art than a science. Many factors go into analyzing and interpreting the current gun laws including the actual text (textual analysis) as well as historical context, related legal precedent, social context and intention of the law’s drafters.

It seems most ATF representatives addressing auctioneers interpret ATF Rul. 96-2 to suggest an “estate-type” auction is one that is onsite, and the word, “executor” is either misplaced or more so a person who is carrying out or giving directions.

If you are an auctioneer without an FFL, next time you are posed with selling firearms at auction, act in accordance with the letter of the law, but maybe more importantly the common interpretation of the law.

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, Keller Williams Auctions and Goodwill Columbus Car Auction. He serves as Adjunct Faculty at Columbus State Community College, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.

0 views0 comments

Recent Posts

See All


bottom of page