Bethany Beach officials cannot keep Bethany Cycle and Fitness from selling and transferring firearms.
Local resident Carol Brigleb voiced concerns more than a year ago about the practice and the council began examining the law after the bike shop was in the process of changing ownership.
However, Delaware state law prohibits municipalities from restricting ownership, transfer or possession of firearms.
Mayor Tony McClenny told the Wilmington News Journal that the town will not be pursuing any change.
Alton Jones who owns the bike shop acquired a federal firearms license for the store on eight years ago.
But local resident Brigleb told the paper that there were more appropriate places to sell guns in Sussex County and that it did not fit the image of Bethany Beach as a family town with retirees.