Excise

went over to the worth corp in stevens point, wis the other day to get some materials to make jigs. the lady asked me if i had some special number, which i dont.

she says "i'll have to charge you the 10% then"...

i says back to her "10% for WHAT?"

she replies "Excise"

i said "hey hold on there now, im catholic...i was excised a couple months after i was born, and you gotta be out of your friggin mind if you think im takin THAT layin down again"

she laughed and laughed, all the people laughed and laughed. then they nailed me the 10% anyway.

Good beer though.

Everyone who sell fishing tackle is required to pay an additional 10% on top of all other taxes for the fishing tackle you sell

Got to love that

Ridiculous.

That's funny! People need to read the 720 form and regulations regarding it. You charge 10% of your cheapest wholesale prices. Your not to show that tax on receipts. Of any finished product. A lot of companies just charge the 10% on components just to be safe. So getting a excise number saves you when you order your components. That money that is collected, is sent back to the states to increase and improve hunting and fishing. Oh yeah, whatever you do don't over pay them for a quarter and readjust the next quarter, they had papers at my door within a week, wanting to know why I deducted xx amount from the next period.

Ha ha ha

Riddle me this then. If I sell jigs, but don't buy my supplies wholesale. I still have to pay the 10%, even tho I paid a 10% tax when I bought the items.

Quote:

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Originally Posted by Brimfisher

Riddle me this then. If I sell jigs, but don't buy my supplies wholesale. I still have to pay the 10%, even tho I paid a 10% tax when I bought the items.

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Here is my understanding, if you buy wholesale and build jigs then sell me those jigs you are supposed to pay them the excise tax and charge me even though you don't show it on the receipt. If we buy hooks from CaptinHooks you are paying the excise tax when you buy them ( not wholesale) so then you don't have to charge the tax or report it. You have to have a Tax ID number to get an account to buy whole sale and on the excise tax you have to get set up and report quarterly. Fatman, Timmy Tom and others can probably explain it better than I can.

Thanks Cray. That's what I understood also.

Ok guys not trying to start no trouble so bear with me and try to explain it a little better. Ok if someone want to engage in the selling of jigs or tackle in general they need the following to engage in a leagal bussiness.It doesnt matter the amount of tackle you make so keep that in mind or money you make. You will need the following:
Federal EIN number
637 Fed Excise tax permit
State sales Tax permit
Ok if your set with these your ready to go ha ha.
The 637 allows you to buy at wholesale prices and be exempt from the 10 percent tax at time of purchase.If you ellect to pay it like buying from Shortys then each quarter you can take a credit from what your due to pay.Example
I buy a box of hooks for say 15.00 if I pay the tax now it is 1.50 added to them.Now if I pour lead on them and charge .10 each them for a total of 100.00 then my tax will be 10.00 less the 1.50 I paid to shortys so I owe 8.50 to Uncle same.
Now the person that bought them decides they want to paint and tye them to sell,well youve changed my finished product so there is tax due and it works like this you sell the 1000 jigs for say .50 cents each you now owe the goverment 50.00 less the 10.00 or 10 percent you paid for them, that has already been paid so you owe 40.00.Easy huh LOL.As long as no further changes are mad to the product then no more excise taxes will be due by anyone else.
If anyone has any question I will be more than glad to try and answer them.Im not a tax expert but will try and help or refer you to the answers.
One last thing if a person were to get caught making or sell tackle without charging the excise tax then there is a heavy I mean real heavy fine plus you will have to pay taxes due plus intrest on it.Now It doesnt make me any differance Im just trying to inlighten anyone that maybe considering doing it for sale.Good luck to anyone starting.

Ooof, That kinda made my head hurt.....:bash.......Uh Oh!

Thanks for the info. I got some back peddling to do.

Yes this forsaken excise tax! It's really putting the squeeze on my business. When I started my business I thought I knew what I was getting into... set my prices and went to pouring. THEN!! Excise happened. I was told it's 10% of final sale price. A $3.00 bag of lures now has a sales tax plus shipping. Then you pay your 10%. With the governments hands in it, materials, packaging and labor there is no longer profit on a $3.00 bag and with a price increase its really hard to compete. Had I known this before I jumped way out and took this hobby to the next level I would have pulled the plug. I'm really struggling with this as my CPA is educating himself to try to make this work for me I'm having a hard time keeping this going because of the government. So if you have more tips to help survive the government please share. I had a good thing going on until this came about.

To put this onto perspective I sold a $92.00 plastic worm and craw order the other day... that is $9.20 in just excise tax I am going to have to give to the government! There has to be something I'm doing wrong because I had a great business plan and it worked until I found out about excise tax.. while it still works it's almost not worth it now. As a newer guy in the business I know I'm going to have struggles but between this and packaging I see profit being pennies on the dollar.