Information used in this study includes documents obtained from ATF under the Freedom of Information Act and through direct inquiries, as well as interviews with State and local governments and industry members. The study first provides a brief introduction to America's firearms industry and its distribution network, including an outline of the privileges offered by the various types of FFL's. Section two of the report focuses on the Type 1 FFL, the standard Federal license required to sell guns in America. State-by- State information on FFL's is provided. The contentious relationship between kitchen-table and stocking gun dealers is explored. A discussion of Class III dealers examines the ability of Type 1 FFL's to become Class III machine-gun dealers by paying an annual $500 "Special Occupancy Tax" and details how this tax is used to circumvent licensing and tax requirements for weapons regulated under the National Firearms Act of 1934. Another section addresses the regulatory activities of the ATF, including standards for approval, denial, and revocation of FFL's as well as the agency's compliance activities. ATF's role in the politics of gun control is also considered. A section on Federal, State, and local dealer regulation analyzes the three levels at which dealers can be regulated. The problems posed to cities and States by the easy availability of FFL's and the lack of communication between ATF and non-Federal licensing authorities are explored. Other topics discussed are the ways in which FFL's can be exploited by criminals to obtain weapons and legislative and policy proposals based on the study findings. Appended information on the civil liability of firearms dealers, the firearms regulations of the 50 States and the District of Columbia, the number of FFL's, and the number of firearms dealers known to State or District of Columbia authorities