Michigan is very similar. I had to collect State Sales tax, and remit to the state, pay the federal excise tax, income tax etc...

I did sit down and talk to someone once in regards to the 720 excise tax. My specific question was: If I buy hooks (and pay a tax on it) and I buy paint (and pay a tax on it) and then I make a jig, have I not already paid the tax. The answer was actually right in the 720 information. Once you alter an existing product in any way shape or form, the tax get applied again!

At least with custom rods they did away with the 10% and went to a flat rate simply because guys were getting around it by having customers purchase all the materials and then simply charging for labor to put them together.

I once did a break down of exactly what I made per jig compared to some of the competition in my area. Someone was complaining online about how expensive the prices had risen to (my prices were the lowest). After that, my orders skyrocketed but I had to choke back tears. For about a week after that, I would finish a jig sold for 50 cents and say, "well, I just made 10 more cents"!!!