ATF "Engaged in the Business" Rule Vacated Nationwide in Texas v. ATF
Independently fact-checked against primary sources (last audited June 25, 2026). · Law checked current as of August 9, 2026. · 4 primary sources cited on this page. How we verify our legal content
ATF "Engaged in the Business" Rule Vacated Nationwide in Texas v. ATF
A federal judge in Amarillo, Texas vacated the ATF's 2024 "Engaged in the Business" Final Rule nationwide on June 12, 2026, finding it unlawful under the Administrative Procedure Act. The ruling came in State of Texas et al. v. ATF, No. 2:24-cv-00089-Z (N.D. Tex.).
Information last verified on June 25, 2026. This is a developing story; we update it as the record changes.
Status: Final judgment entered June 12, 2026 by U.S. District Judge Matthew Kacsmaryk, vacating the 2024 rule nationwide. The Department of Justice voluntarily dismissed its earlier Fifth Circuit appeal in April 2026 and stopped defending the rule. As of June 25, 2026, no notice of appeal from the June 12 final judgment has been confirmed.
Jurisdiction scope: Federal. The vacatur applies to the ATF's nationwide rule and does not change state-level rules. For state and federal screening duties, see our overview of federal and state background check laws.
What Happened
On June 12, 2026, U.S. District Judge Matthew Kacsmaryk entered final judgment in State of Texas et al. v. ATF, No. 2:24-cv-00089-Z, in the U.S. District Court for the Northern District of Texas, Amarillo Division. The court granted summary judgment in part to the plaintiffs, denied the government's cross-motion, and set aside the ATF's 2024 Final Rule under the Administrative Procedure Act.
The plaintiffs included the States of Texas, Louisiana, Mississippi, and Utah, along with Gun Owners of America, the Gun Owners Foundation, the Tennessee Firearms Association, the Virginia Citizens Defense League, and an individual plaintiff. They had challenged the rule as exceeding the agency's statutory authority and as conflicting with the text of the Gun Control Act and the Bipartisan Safer Communities Act.
The court invoked 5 U.S.C. 706(2), the Administrative Procedure Act provision directing a reviewing court to "hold unlawful and set aside" agency action found to be unlawful. Because APA vacatur is not limited to the named parties, the court ordered that the defendants may not apply the Final Rule to anyone, giving the ruling nationwide reach. The court also dissolved its earlier preliminary injunction, issued in May 2024, as unnecessary once the rule was vacated.
The 2024 Final Rule appeared at 89 Fed. Reg. 28,968 (April 19, 2024) and amended Title 27 of the Code of Federal Regulations, Part 478. It took effect on May 20, 2024 before being enjoined as to the plaintiffs and now vacated in full.
What the Law Actually Says
Federal law requires anyone "engaged in the business" of dealing in firearms to hold a Federal Firearms License (FFL). The licensing requirement appears in 18 U.S.C. 923. An FFL holder must run a National Instant Criminal Background Check System (NICS) check before transferring a firearm and must keep records of acquisitions and dispositions. People who are not dealers, such as private individuals selling from a personal collection, generally do not carry those federal duties when they make occasional sales.
The phrase "engaged in the business" is defined in 18 U.S.C. 921(a)(21)(C). The Bipartisan Safer Communities Act of 2022 amended that definition. Before the 2022 law, a dealer was a person whose "principal objective" was "livelihood and profit." The Bipartisan Safer Communities Act replaced that standard with a person who deals in firearms "to predominantly earn a profit." The statute defines "to predominantly earn a profit" as intending to obtain pecuniary gain, and it states that proof of actual profit is not required. The definition still excludes a person who makes "occasional" sales to enhance a personal collection.
The 2024 ATF rule was the agency's attempt to implement that statutory change through regulation. Critics argued the rule swept far past the statute by treating many private and hobbyist sellers as presumptive dealers, which would have pulled them into the FFL, NICS, and recordkeeping system. The June 12 ruling does not erase the statute. It removes the agency's 2024 rule while the underlying "predominantly earn a profit" standard in 18 U.S.C. 921(a)(21)(C) remains the law.
For how screening duties differ by jurisdiction, see our guides to Texas background check laws and Virginia background check laws. If you are documenting a lawful private transfer, our guide explains how a private gun sale bill of sale works.
Analysis: Why This Matters
The following is analysis from the Recording Law Editorial Team.
The procedural backdrop shapes this outcome. After the 2024 rule was challenged, the Department of Justice under a new administration voluntarily dismissed its Fifth Circuit appeal in April 2026 and announced a broader package of firearms regulatory rollbacks. That meant the rule arrived at final judgment without an agency defending it on the merits. A vacatur entered against a government that has stopped contesting the case is far less likely to be appealed than one entered over the government's objection.
The decision also reflects a recurring tension in administrative law: how far an agency may go when Congress hands it a broadened statutory term. The court's reasoning, as reported, is that the rule strayed from the statutory text by recasting occasional, non-commercial sellers as dealers. That is a statutory-authority problem, not a Second Amendment holding, and it travels through the same APA channel that has reshaped other recent ATF rules.
For readers, the practical takeaway is narrower than the headline. The 2024 rule is gone, but the Bipartisan Safer Communities Act standard is not. Whether a particular seller is "engaged in the business" still turns on the statute and on how a future agency or court reads it. We covered a separate firearms-law development in our report on the Supreme Court and the marijuana-user gun ban.
How This Affects You
This section is general legal information, not advice about your situation.
For licensed dealers, the immediate change is that the 2024 rule's expanded definitions and presumptions no longer apply. Dealers remain subject to the FFL, NICS, and recordkeeping duties that existed under the Gun Control Act and the Bipartisan Safer Communities Act statute itself.
For private sellers and hobbyists, the rule that would have pushed more occasional sellers toward dealer status has been vacated. The governing question reverts to the statutory text: whether a person deals in firearms as a regular course of trade or business to predominantly earn a profit. Someone selling from a personal collection on an occasional basis was not automatically a dealer under the statute, and the vacated rule no longer changes that analysis.
State law is a separate layer. A nationwide vacatur of a federal rule does not alter a state's own background-check, waiting-period, or private-transfer requirements. Sellers and buyers should confirm their own state's rules before any transfer.
What Happens Next
The most consequential variable is whether the government appeals the June 12 final judgment. As of June 25, 2026, no notice of appeal from that judgment has been confirmed. Given that the Department of Justice voluntarily dismissed its earlier appeal and stopped defending the rule, a fresh appeal would be unusual, though the docket can change.
A future administration could attempt to reinstate a similar rule, but it would have to start a new rulemaking and survive the same APA scrutiny that defeated the 2024 version. Congress could also amend the statute, which would change the analysis directly rather than through agency rulemaking.
For now, the operative authority is the Bipartisan Safer Communities Act text in 18 U.S.C. 921(a)(21)(C) and the licensing framework in 18 U.S.C. 923, without the 2024 implementing rule.
This article is legal information, not legal advice. It does not create an attorney-client relationship. Laws change and apply differently to individual facts. Consult a licensed attorney in your jurisdiction before acting on anything here.
Sources
- Court order PDF, State of Texas et al. v. ATF, No. 2:24-cv-00089-Z (N.D. Tex.), ATF-hosted: https://www.atf.gov/media/25401/download
- ATF, Final Rule: Definition of "Engaged in the Business" as a Dealer in Firearms: https://www.atf.gov/rules-and-regulations/final-rule-definition-engaged-business-a-dealer-firearms
- 18 U.S.C. 921 (Definitions), Cornell Legal Information Institute: https://www.law.cornell.edu/uscode/text/18/921
- 18 U.S.C. 923 (Licensing), Cornell Legal Information Institute: https://www.law.cornell.edu/uscode/text/18/923
- Bipartisan Safer Communities Act, S.2938, 117th Congress, Congress.gov: https://www.congress.gov/bill/117th-congress/senate-bill/2938
- DOJ and ATF, Regulatory Reforms press release, justice.gov: https://www.justice.gov/opa/pr/doj-and-atf-announce-regulatory-reforms-reduce-burdens-law-abiding-gun-owners-and-businesses
Related articles
- Federal and state background check laws
- Texas background check laws
- Virginia background check laws
- How a private gun sale bill of sale works
- The Supreme Court and the marijuana-user gun ban
Last updated: 2026-06-25. This is a developing story; details verified as of 2026-06-25.
Frequently Asked Questions
What did the court decide on June 12, 2026?
The U.S. District Court for the Northern District of Texas entered final judgment vacating the ATF's 2024 'Engaged in the Business' Final Rule, holding it unlawful under the Administrative Procedure Act and ordering that ATF may not apply it to anyone.
Is the vacatur nationwide?
Yes. The court held that vacatur under the Administrative Procedure Act is not limited to the named parties and ordered that the defendants may not apply the Final Rule to anyone, which gives the ruling nationwide effect.
What was the 2024 ATF rule?
It was a Final Rule, published at 89 Fed. Reg. 28,968 on April 19, 2024, that redefined who is 'engaged in the business' as a firearms dealer. It expanded who must hold a Federal Firearms License, run NICS background checks, and keep dealer records.
What statute is at the center of the case?
The definition of 'engaged in the business' in 18 U.S.C. 921(a)(21)(C), the dealer licensing requirement in 18 U.S.C. 923, and the Bipartisan Safer Communities Act of 2022, which broadened the dealer definition to a 'predominantly earn a profit' standard.
Does this ruling end background checks for gun sales?
No. Licensed dealers must still run NICS checks and keep records under existing law. The ruling removes the 2024 rule that would have expanded who counts as a dealer; it does not repeal the dealer system or state background-check laws.
Did the Department of Justice appeal?
The Department of Justice voluntarily dismissed its Fifth Circuit appeal in April 2026 and stopped defending the rule. As of June 25, 2026, no notice of appeal from the June 12, 2026 final judgment has been confirmed.
Does this change private gun sales?
The vacated rule would have treated more occasional and hobbyist sellers as presumptive dealers. With the rule gone, the analysis returns to the statutory text. State private-transfer and background-check laws are unaffected by this federal ruling.
Is this a Second Amendment ruling?
No. As reported, the decision rests on the Administrative Procedure Act and on the rule exceeding the statutory text, not on a Second Amendment holding.
Updates
Governing law re-checked for recent changes
Independently fact-checked against the cited primary sources
The Law Behind This Article
This article rests on the statutory provisions below, held in our own legal record and retrieved from the official source. Tap a section to read the operative text.
United States Code Title 18
§ 921DefinitionsIn forcecited in 4 of our articles
As used in this chapter— The term “person” and the term “whoever” include any individual, corporation, company, association, firm, partnership, society, or joint stock company. The term “interstate or foreign commerce” includes commerce between any place in a State and any place outside of that State, or within any possession of the United States (not including the Canal Zone) or the District of Columbia, but such term does not include commerce between places within the same State but through any place outside of that State. The term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, and the possessions of the United States (not including the Canal Zone). The term “firearm” means (A) any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive; (B) the frame or receiver of any such weapon; (C) any firearm muffler or firearm silencer; or (D) any destructive device. Such term does not include an antique firearm.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 3,010 court opinions in our collectionLatest citing opinion in our collection: 2026
Opinions citing this section in our collection:
- Rehaif v. United States (Supreme Court of the United States 2019, 588 U.S. 225)“…arms Owners’ Protection Act, 100 Stat. 449, note following 18 U. S. C. §921, which reorganized the prohibition on f…”
- United States v. Biswell (Supreme Court of the United States 1972, 406 U.S. 311)“…the Court. The Gun Control Act of 1968, 82 Stat. 1213 , 18 U. S. C. § 921 et seq., authorizes official entry d…”
- Muscarello v. United States (Supreme Court of the United States 1998, 524 U.S. 125)“…e is “explosive,” “incendiary,” or delivers ‘‘poison gas.” 18 U. S. C. § 921 (a)(4)(A). On petitioners’ reading, the…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Can You Become an ICE Agent with a Criminal Record? (2026 Guide), How Long Does a Felony Stay on Your Record? (2026), 18 U.S.C. § 922 Explained: Prohibited Persons, Penalties
§ 923LicensingIn force
No person shall engage in the business of importing, manufacturing, or dealing in firearms, or importing or manufacturing ammunition, until he has filed an application with and received a license to do so from the Attorney General. The application shall be in such form and contain only that information necessary to determine eligibility for licensing as the Attorney General shall by regulation prescribe and shall include a photograph and fingerprints of the applicant. Each applicant shall pay a fee for obtaining such a license, a separate fee being required for each place in which the applicant is to do business, as follows: If the applicant is a manufacturer— of destructive devices, ammunition for destructive devices or armor piercing ammunition, a fee of $1,000 per year; of firearms other than destructive devices, a fee of $50 per year; or of ammunition for firearms, other than ammunition for destructive devices or armor piercing ammunition, a fee of $10 per year.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 452 court opinions in our collectionLatest citing opinion in our collection: 2025
Opinions citing this section in our collection:
- United States v. Biswell (Supreme Court of the United States 1972, 406 U.S. 311)“…by such . . . dealer . . . at *312 such premises." [1] 18 U. S. C. § 923 (g). Respondent, a pawn shop operator…”
- G. M. Leasing Corp. v. United States (Supreme Court of the United States 1977, 429 U.S. 338)“…ction procedure authorized by the Gun Control Act of 1968, 18 U. S. C. § 923 (g), was upheld: "When a dealer choo…”
- United States v. Bailey (Court of Appeals for the Eleventh Circuit 1997, 123 F.3d 1381)“…st comply with ATF regulations governing their conduct. See 18 U.S.C. § 923(a)(3); 27 C.F.R. §§ 178.1-178.171. For…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
United States Code Title 5
§ 706Scope of reviewIn force
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall— compel agency action unlawfully withheld or unreasonably delayed; and hold unlawful and set aside agency action, findings, and conclusions found to be— arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; contrary to constitutional right, power, privilege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; without observance of procedure required by law; unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.
Official text (excerpt) · last checked 2026-07-28 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 21,683 court opinions in our collectionLatest citing opinion in our collection: 2026
Opinions citing this section in our collection:
- Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co. (Supreme Court of the United States 1983, 463 U.S. 29)“…the provisions of the Administrative Procedure Act (APA), 5 U. S. C. §706 , of all “orders establishing, amending…”
- Citizens to Preserve Overton Park, Inc. v. Volpe (Supreme Court of the United States 1971, 401 U.S. 402)“…we must look to § 706 of the Administrative Procedure Act, 5 U. S. C. § 706 (1964 ed., Supp. V), which provides th…”
- Lujan v. National Wildlife Federation (Supreme Court of the United States 1990, 497 U.S. 871)“…and § 10(e) of the Administrative Procedure Act (APA), 5 U. S. C. § 706 , in the course of administering what t…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Search our full record of US law — 2.1 million sections, every state + federal →
Sources and References
- Court order, State of Texas et al. v. ATF, No. 2:24-cv-00089-Z (N.D. Tex.)(atf.gov).gov
- ATF Final Rule: Definition of Engaged in the Business as a Dealer in Firearms(atf.gov).gov
- 18 U.S.C. 921 Definitions(law.cornell.edu)
- 18 U.S.C. 923 Licensing(law.cornell.edu)
- Bipartisan Safer Communities Act, S.2938, 117th Congress(congress.gov).gov
- DOJ and ATF Regulatory Reforms press release(justice.gov).gov