The gun show loophole refers to the sale of firearms by private owners, specifically at gun shows, who sell their own – typically used – guns. It is something like the “used car market” for guns.
Gun sales by private owners are not regulated in the same way that sales by dealers are.
In 32 states, the sale of used guns by private owners are not subject to a background check. In other words, the person buying the used gun does not have to go through a background check – nor does he or she have to show ID, and nor does the sale have to be recorded.
Does this seem problematic?
This is a loophole. If a person buys a gun at a licensed dealer, they have to go through a background check. A 1997 study claims that up to 40% of all gun sales are made without a background check, through the gun show loophole.
According to the ATF, the law states: “[a]ny person may sell a firearm to an unlicensed resident of the State where he resides as long as he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms”.
As of September 2015, 18 states and Washington, D.C. require background checks for some or all private firearm sales, writes Wikipedia.
Federal law prohibits private individuals from selling a firearm to a resident of another state, or anyone they have reason to believe is prohibited from owning a firearm, states Wikipedia.
Gun stores and other Federal Firearms License (FFL) holders are required to record all sales and perform background checks on almost all buyers, regardless of whether the venue is their business location or a gun show. Access to the NICS background check system is limited to FFL holders and FFL’s are not issued to persons that only sell firearms at gun shows.
CBS states that the Obama administration announced Monday that it will unilaterally attempt to close the so-called gun show loophole. This includes note only those conducting business at gun shows, but also companies online.
According to CBS, existing law exempts gun collectors and hobbyists from conducting a background check before selling a firearm. However, Attorney General Loretta Lynch said to reporters Monday, “There’s been an expansion of people claiming the exemption… when they really don’t qualify for it.”
New guidance from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced Monday “puts in one place clear guidance… on who actually qualifies as a dealer,” Lynch said. “It will help individuals who do want to comply and really do want to know the standards, and it will also put everyone else on notice that if they don’t comply, there will be consequences.”
The new ATF guidance and stepped up enforcement efforts were announced with a series of other steps the administration is taking as part of an ongoing effort to reduce gun violence. Mr. Obama stressed earlier in the day after meeting with Lynch that the new actions are “well within my legal authority.”
A late 20th century report by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) commissioned by then-president Bill Clinton stated that transactions and sales of firearms by private U.S. citizens contribute to illegal activities. Since the mid-1990s, gun control advocates have expressed concern over the loophole, and campaigned to require background checks and recordkeeping for all gun sales. On the other side, gun rights advocates have denied that such a loophole exists. They claim that background checks and recordkeeping for private gun sales go against Second Amendment rights.