Hi Gang,

I found some interesting info on another rod building site pertaining to a proposal in congress that if I'm reading this right may reduce the amount of excise tax we pay in rod building. This link will take you to the proposed article [www.house.gov]
Check Part II, B, 3 page 12. Check it out. We (when I say we I mean as individuals) might want to contact your Congressmen/women to show support for the proposal (or not).

Hank
On The Rocks Fishing
Wells, ME.

You may want to look at this a little deeper. Keep in mind that custom rod builders do not pay excise tax on custom rods - your customers pay the tax which you collect and then send to the IRS.

There are sweeping changes being proposed for various excise taxes under the bill. The Sportsfishing Excise Tax on rods is one of those. It is possible that the tax will be reduced on rods whose constructive sales price is greater than $100. The maximum tax would be 10% or $10, whichever is the lesser of the two.

This could put the Game & Fish Departments of many states in a terrible bind. In many instances, over half of their entire budget is comprised of funds received from the Sport Fish Restoration Fund which itself is funded by receiving roughly 90% of the Sportfishing Excise Tax monies on fishing equipment. (The FET on fishing equipment does not go into any general tax fund, it is returned in full to the Game and Fish Departments of our 50 States.) Depending on how the numbers crunch, this reduction could cripple many of the projects of your local Game & Fish Department.

I hope many custom rod builders will write their Congressmen and Senators to voice their opposition to this reduction. As one of a few true "user taxes," fishermen can be proud of the fact that they pay their own way and contribute to the health and well being of our Nation's fisheries.

.............

This is why you make a good magazine publisher. I'm sitting here just looking at the money I think it might save me and you're looking at the ramifications of the bigger picture. Thanks. I hadn't considered any of what you pointed out.

Oh where to start??

First off this information was posted 2 days ago on another rod building web site and seeing as it had not been mentioned on this phorum I thought I would post this info for all that wanted to read it could. This Phorum is by far the most read of all the rod building sites on the web. Most everyone reading this phorum are old enough to makeup their own mind on this matter. I was in no way trying to sway anybody one way or the other as I posted it as “We (when I say we I mean as individuals) might want to contact your Congressmen/women to show support for the proposal (or not).” Whether someone supports this matter or does not support it is up to them I was only bring the matter to the good people of the phorum.

As for who pays the excise tax technically you are correct, IMHO you’re not. That $400.00 rod I just priced out is worth $400.00 with the material and labor I will put into that rod. Seeing as it’s worth $400.00 I can’t add another $40.00 excise tax and then another $20.00 state sales tax on that rod so I have to figure these taxes into the quote or loose the sale. I usually try for a 50/50 split a my quote. So for that reason I put less money in my pocket so I figure I’m also paying a chunk of the taxes. There are only a few rod builders out there that can have someone come into their shop, lay a credit card down and say build me a rod. Most of us have to work the figures to make to make that sale.

I know you’re going to say that this is not a political phorum and I agree but if this is/was such an important issue why was this not posted for all to read so they could make their voices heard in Congress?


Hank
On The Rocks Fishing
Wells, ME.

Hank,
I appreciate your views as well as the information Tom brings to the table. I hope you'll agree that it is helpful to see the full ramifications of a decision before making a choice. This is not a perfect world. I was pleased to learn the facts of how the excise tax has a vital impact on all the States' budgets for sport fishing. Armed with that knowledge I can fully support it until a better source of funding is created. As for having to absorb the cost of this tax as builders it may help if we educate our customers so they too will be pleased to know that those few extra dollars are actually helping secure them a continued source of fishing enjoyment. It may be that you are underestimating the good sense of your clients. The younger generation is well schooled in environmental issues. We have the responsibility to share this knowledge with those who are yet to see the light. Left alone, we will lose our fishing resources faster than any of us are going to like. Another solution might be to adjust your product to meet the price point of your clients without you having to lose any profit. The art of flexibility is going to become ever more important in this craft. I think that skill is one vital key to survival in this and any other business.
Dave

IF THE MONEY WENT INTO THE AREA IT WAS COLLECTED FOR IT WOULD BE OKAY. BUT WE ALL
KNOW THAT ONLY A FRACTION OF IT GOES WHERE IT IS SUPPOSE TO. I HAVE A LIFETIME HUNTING LICENSE WHICH IS SUPPOSE TO COVER ALL TAGS AND NOW THEY COME UP WITH ANOTHER TAG I HAVE TO BUY FOR 5.00 SAME WAY ON FISHING LICENSE. GRANTED ITS ONLY 5.00
BUT IT COST ME AND THE WIFE 50.00 FOR FISING LICENSE. IF THEY REDUCE THE AMOUNT OF TAXES IT WILL PASS ON TO ALL OF US . IT IS GETTING TO THE POINT THAT YOU CANT AFFORD TO DO THE THINGS YOU ENJOY WITHOUT HAVING TO TAKE OUT A MORTGAGE ON YOUR HOME . WHERE WILL IT END.
JUST MY THOUGHTS ON IT

"IT IS GETTING TO THE POINT THAT YOU CANT AFFORD TO DO THE THINGS YOU ENJOY WITHOUT HAVING TO TAKE OUT A MORTGAGE ON YOUR HOME . WHERE WILL IT END".

In an outrageous affront to U.S. labor laws, a California company plans to anchor a 600-cabin cruise ship just beyond the three-mile limit off the coast of El Segundo, near Los Angeles, and stock it with foreign software programmers.

The company, SeaCode, will seek to classify the workers as "seamen," avoiding U.S. payroll taxes and the need for immigration visas.

Programmers from places like India and Russia would work 8-hour or 10-hour shifts, either day or night. Take-home pay: About $21,500 a year.

Compare that to the salary of an American programmer - median salary for programmers is around $60,000, and those with extensive experience can make $125,000 or more - and U.S. companies like SeaCode could reap a windfall.

SeaCode says it will charge clients the same rate as firms in developing countries. The company says the significant benefit of having the low-cost programmers near the U.S. is that clients will be spared from long flights to India and other far-off destinations to check on projects.

By using foreigners working on boats, SeaCode also believes projects will get done more quickly as their programmers toil both day and night. "Try to get American software engineers to work at night," SeaCode co-founder David Cook told Forbes magazine, explaining his delight in the outsourcing scheme.

But Jack Martin, special projects director for the Federation for American Immigration Reform, complained: "All it would do is be a further contribution to eroding the job opportunities for skilled American workers."

SeaCode is close to making an offer for the Carousel, a ship now sailing around the Canary Islands. The vessel would dock in Long Beach once a month to take on supplies and dispose of waste - isn't that nice? But legally speaking, the SeaCode scheme could face stormy seas


Wait until all the jobs are gone and instead of taking out a mortage on your home you lose it... That's where it will end my friend.

No one was giving you a hard time for your post nor did I or anyone else suggest that you were trying to sway anyone's opinion. I only mentioned that it might be prudent if builders looked at little bit beyond the surface where they might only see a reduction in the tax to a place where they could see the ramifications of such a proposal becoming law.

No, you do not pay the tax. The customer is still paying it whether you say you're adding it on or including it in the retail price. Where is that $400 coming from to begin with? It comes from the customer - he pays the tax, regardless of how you want to figure it.

Why was it not brought up here earlier? Perhaps because it is still just a proposal. To my knowledge, this is the only rod building site that has a full article and information on the tax as it now stands. When or if the new proposal gets a little futher down the line and into a form that will be voted, this site will have ironclad information on it. RodMaker will have coverage of the proposal along with some information from the people who initiated it. There is a bit more to it than anyone is going to cover in a message board post.

I don't like paying taxes any better than anyone else. But the fact is, many of things we enjoy in this country are made possible by the taxes we pay. The Sportsfishing Excise Tax is what I personally consider a good tax, because it is returned in full for the benefit of those who paid it. You may feel differently.

You are correct that this isn't a political board, and if the topic were to stray too far off the information you presented (thank you) and into waters other than the actual proposal and its possible ramifications to custom rod builders and their craft/sport, they would be appropriately removed.

....................



Edited 1 time(s). Last edit at 05/05/2005 09:15AM by Tom Kirkman.

By the way, on a $400 rod, the excise tax would be only $24, not $40 as you suggest. You may find it helpful to read the article in the library here on how to figure the tax. You may be overpaying.


..............

Just for easy math, I believe It works out (no matter how its worded) to be 6% of the total sale.

As far as the proposal goes (no matter your view) you still have the right to contact your representive(s) and express your concerns, wishes and views of how you think they should vote on the issue.

Regards......Doug@
TCRds

6% of retail sales, 10% on the resell level. The actual wording is "10% of the Constructive Sales Price" (which is 60% of the retail price).

.............

Tom,

Again I was only trying to bring forward information I thought that the people on this site should know about. People can make up their own minds from here. One thing I wanted to avoid was misinformation like was posted on the other site. Guys before you jump up and down, scream yell and holler the next piece of info is INCORRECT from what I read in the proposal. One of the first post on that thread stated that it was proposed that the Excise tax would be increased from 10% to 21%. That's what really caught my eye. I was had hook, line and sinker. Then someone came on a posted the corect info.

Dave you may have had better luck educating your customers than I have because when I tell them what this tax is used for I usually get a response a little stronger than cow biscuits.

Lastnight after I cooled down I shortned my reply but let me add a little of it here:

Let me suggest this to the builders reading this post, contact your congressmen/women and find out how much money was collected from the state you’re in and paid to the IRS. Then find out how much of that money was returned back to your state. Then contact your Fish and Game department and request the amount of this money they received from the state. Now request from your Fish & Game department details on what this money was used for. This is what I’m going to do tomorrow and if I ever get this info I will post it. Lets see if the debit and credit lines agree.

Hank
On The Rocks Fishing
Wells, ME.

They will agree. The money is appropriated back to the states according to the number of licensees and ratio of land to water in each state. There is a list that shows the actual dollar figures that each state gets. ( Typiclally, if you have more license holders in a state, that means you have more fishermen, thus you have more people buying fishing equipment.) I'll try to get that list up for you sometime later today. It should already have been formulated for the 2004 fiscal year.

The U.S. Game and Fish Department oversees the fund. They are allowed to retain just 6% of it for administrative purposes. The rest goes into the Sport Fish Restoration Fund.

.........................

This excise tax is fairly unique as the funds actually do make it back to support the resource that was taxed to begin with. A state hunting/fishing licence doesn't come close to compairing with the excise tax as the state money usually goes in the general fund. For fiscal year 2005 there will be more than $530 million returned to the states from this excise tax. This is after all appointments for sportfish restoration, hunter education, etc. have been taken off the top. I have a list of all states and what portion they will be receiving this year (North Carolina will get right at $5.5 million). The excise tax goes right back to the resource.

It is hard sometimes, as business owners, to differentiate the taxes our customers pay from the taxes we pay. I collect sales tax every day and when that money goes into my bank account it feels like MY money. Then the end of the month comes and I owe the state of North Carolina several thousand dollars in sales & use tax. I have to write a check from my checking account & again it feels like MY money going out the door, but it's not. Every customer I have paid that tax...I only got to hold on to it a little while before handing it over to the state. The sportfish excise tax is the same way. As rodbuilders we only collect this money from our customers and then turn it over to the state.

The tax should be included in the cost when pricing out a rod. It doesn't have to be presented to a customer as "and the excise tax amount will be...". They don't even need to be aware of the tax. When is the last time you went to a sporting goods store to buy a reel, lures, bait, hunting clothes, ammunition, etc. and you saw on the price tag (or your receipt) a line that said 'excise tax amount'? The taxes have to be paid and are paid. We the customers of those sporting goods stores are the ones paying them...we just don't see them as they are already added into the price. This is what you should be doing as a rodbuilder.

All in all, I also believe the excise tax is a good thing. When was the last time anyone of us purchased some fishing related sporting goods and really wondered what the excise tax amount would be? I for one have never even thought about it even though I pay it every single time. The tax is good in my opinion. My state is getting back several million dollars this year because of it...I like that.

Jay

Here is the U.S. Fish and Wildlife Service site where you can learn more about the fund: [www.fws.gov]


U.S. FISH AND WILDLIFE SERVICE FINAL APPORTIONMENT OF DINGELL-JOHNSON SPORT FISH RESTORATION FUNDS FOR FISCAL YEAR 2005 SPORT FISH STATE RESTORATION

ALABAMA $4,422,820
ALASKA 14,734,564
ARIZONA 5,922,343
ARKANSAS 5,642,674
CALIFORNIA 14,734,564
COLORADO 7,008,028
CONNECTICUT 2,946,913
DELAWARE 2,946,913
DISTRICT OF COLUMBIA 982,304
FLORIDA 7,914,307
GEORGIA 5,633,286
HAWAII 2,946,913
IDAHO 5,001,608
ILLINOIS 5,892,633
INDIANA 4,043,934
IOWA 4,232,551
KANSAS 4,262,230
KENTUCKY 4,629,054
LOUISIANA 5,200,984
MAINE 2,946,913
MARYLAND 2,946,913
MASSACHUSETTS 2,946,913
MICHIGAN 9,945,909
MINNESOTA 11,165,735
MISSISSIPPI 3,650,051
MISSOURI 7,134,020
MONTANA 7,019,722
NEBRASKA 3,630,946
NEVADA 4,414,267
NEW HAMPSHIRE 2,946,913
NEW JERSEY 2,946,913
NEW MEXICO 5,132,285
NEW YORK 7,396,138
NORTH CAROLINA 5,494,411
NORTH DAKOTA 3,278,612
OHIO 6,878,971
OKLAHOMA 5,623,487
OREGON 7,087,755
PENNSYLVANIA 7,489,335
RHODE ISLAND 2,946,913
SOUTH CAROLINA 3,702,853
SOUTH DAKOTA 3,699,812
TENNESSEE 7,029,132
TEXAS 14,734,564
UTAH 4,899,623
VERMONT 2,946,913
VIRGINIA 4,731,149
WASHINGTON 6,124,056
WEST VIRGINIA 2,946,913
WISCONSIN 10,191,022
WYOMING 4,687,372
AMERICAN SAMOA 982,304
GUAM 982,304 N.
MARIANA ISLANDS 982,304
PUERTO RICO 2,946,912
VIRGIN ISLANDS 982,304

TOTAL $294,691,282


.............

The addition of the Pittman/Robertson excise tax on hunting gear adds roughly another $160,000,000 to the total amount returned to the state game and fish departments.

...........



Edited 1 time(s). Last edit at 05/05/2005 10:57AM by Tom Kirkman.

I would like to thank Hank for bringing the topic up here. I didn't see where anybody challenged Hank or accused him of anything so I hope he doesn't see any need to cool down. I don't think there was any reason for him to have heated up in the first place! But really Hank, thanks for posting this topic here. I wasn't aware of any of this before you posted. I knew about the tax but not any proposed changes.

The thing I like about this site is the deeper information you get on a topic. Like Hank I saw the thing posted elsewhere and all the posts seemed to be pretty superficial and only about how the custom builders might be able to save some money. Nobody said anything about the flip side of the coin and how the reduction in funds might affect our fishing resources. You have to come here to rodbuilding.org to get that kind of well rounded info. This is a great topic and something I hope we'll be kept abreast of. Thanks.

It's a bit too early to tell if such a reduction in the actual tax would, in fact, reduce the overall funding for the SportFish Restoration Fund. It may be made up in other areas (the changes in the boating end of the tax) or could result in more fishing equipment being sold. Or, it could certainly reduce the fund and result in a terrible shortfall for the state departments. As I said earlier, the number crunchers aren't finished yet. I'll have this information in the issue of RodMaker that comes out in late-summer.

..........

I'll be happy to get all the facts and predictions when they are available. Much better than getting it from political rhetoric or bumper stickers which are hardly ever informative. And let's all keep in mind the differences between proposals and actual changes and predictions of effects versus actual effects. The best predictions aren't always born out by reality. As Tom says, certain feedback relationships between prices and sales might come into play.

I keep hearing how this will save custom rod builders money. It won't. We don't pay the tax...the end user does. If the state of North Carolina did away with the state sales tax it would not save me, a business owner, a dime. Same should be true for the excise tax.

Jay

Ok - This will be my last post on this issue. I'm going to post then back away from this site for awhile until I can get a better mind set.

First off let me begin by apologizing to the good people of this phorm. I mispoke when I used 10% instead of 6%. In my frame of mind lastnight I should have just gone to bed and forgot about it. I made two mistakes lastnight. First bring up this issue. The second and biggest was not waiting to cool down and make my post in a better frame of mind.

Yes Tom, I do know how to figure the correct percent of tax on my sales, I mispoke lastnight and I apologize for that. The very last thing I want to do is give incorrect information.

Danny thank you for your reply. My only reason for posting this was to shed light on this issue. For me it go deeper than just this thread, that is why I'm backing away for awhile so when I do come back I can view this site as what it was ment for and that is rod building.

I made a post a little over a year ago stating that someday someboby is going to sit down and write the history of rod building and Tom Kirkman's name will be a very big part of that book. I ment it then and I mean it now.

Steve, I would really apprecate any figures you might be able to come up with. I realize that this is only a proposal and this is the time to let your congressmen/women know your feeling on the issue. It's easier to change things now than when it's a bill waiting to be voted on.

Tom, It amazes me how fast you can find info when needed. Yes Danny this go a lot deeped than just this thread.

In the year 2004 I purchased all the back isssues,and some of the back issues more than once, a 1yrs subscription then a two year renewal. In the amount of somewhere over $250.00. When it was posted that possibly in the near future RodMaker Magazine would no longer accept new subscribers or renewals I like others sent for that 2 year renewal so would be able to get the magazine. Every penny I spent for the magazine was some of the best money I laid out last year and would do it again in a second. But being the sap that I am when I purchased the bulk of these magazines ($187.65) I said to myself go get a USPS money order and save the magazine the Visa processing fees, what a sap I am. So when I ask for a receipt for my purchases I was told that he does not give receipts but would try to make time on Sunday and get me that info. Well that Sunday has come and gone and so has tax time. So Danny yes it does go deeper than just this thread.

For the good people of the phorum I apologize to you for airing my dirty laundry. I had no intentions of doing this. I only wanted to help others like so many of you have help me along the way. To those people thank you from the bottom of my heart. I think rod builders are the greatest group of people out there. You share your tip and tricks and sometime your trade secrets. I wish all good health and hope to chat with you sometime in the future when I can view this site and again have the good feelings and thoughts I had when I first came here.

Good Bye for now




Hank
On The Rocks Fishing
Wells, ME.