Thread: Excise tax

Originally Posted by snake River

you guys that may be interested in getting into selling jigs and plastics believe me it's not worth it right now . There are too many people selling illegally is that you're not paying excise or anything else and so is guys that are going by the law or suffering not because of that only because of the economy is terrible right now.

That's why I started making handline reels. I'd rather sell one reel for $100 to $340 than hundreds of dozens of jigs. If you can make your baseline sale $100, it's much easier to amass a little cash.

Originally Posted by funbun

That's why I started making handline reels. I'd rather sell one reel for $100 to $340 than hundreds of dozens of jigs. If you can make your baseline sale $100, it's much easier to amass a little cash.

But you still have to pay the tax!

Yes, I never said I didn't.

$389 in sales would include the 10% FET. you don't pay tax on tax. The FET on $389 sales is 35.3 rounded to the nearest dollar. According to my CPA

Right. Thanks for the correction. To be precise it's based on the sales price. IRS form 720 part II states: https://www.irs.gov/pub/irs-pdf/f720.pdf

41 | Sport fishing equipment (other than fishing rods and fishing poles) | 10% of sales price
110 | Fishing rods and fishing poles (limits apply, see instructions) | 10% of sales price
42 | Electric outboard motors | 3% of sales price
114 Fishing tackle boxes | 3% of sales price
44 | Bows, quivers, broadheads, and points | 11% of sales price
106 | Arrow shafts | $.63 per shaft
140 | Indoor tanning services | 10% of amount paid

https://www.irs.gov/pub/irs-pdf/f720.pdf

Therefore, if the sales price of one of my reels is $100, then I have to pay $10 in FET on each reel.

Honestly, this kind of thing needs to be discussed with a tax professional instead of an open forum. Don't take any of this as legal advice. See the IRS instructions for part II of form 720: Instructions for Form 720 (12/2025) | Internal Revenue Service

Not 100% true. Once you add in material cost, shipping costs, labor costs, energy costs, advertisement, material consumption and testing loss (have to test each jig style in the "lab"), and storage fees you'll not show a profit for at least 3 - 5 years so you're tax exempt at this point.

Originally Posted by Kevind62

Not 100% true. Once you add in material cost, shipping costs, labor costs, energy costs, advertisement, material consumption and testing loss (have to test each jig style in the "lab"), and storage fees you'll not show a profit for at least 3 - 5 years so you're tax exempt at this point.

Well the 720 form says 10% of sales.....not profit so I think I'll pay it.

Originally Posted by Kevind62

Not 100% true. Once you add in material cost, shipping costs, labor costs, energy costs, advertisement, material consumption and testing loss (have to test each jig style in the "lab"), and storage fees you'll not show a profit for at least 3 - 5 years so you're tax exempt at this point.

Theres no writeoffs for 720, and its on sales