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Sportfishing Excise Tax
Posted by: Mike Neal (---.brd.64.71.113.73.brdadsl.sktc.net)
Date: October 27, 2005 08:11PM

What do you and do you not figure this tax on? I have read the article and maybe I missed it but I am not 100% on what is exactly included when you figure the tax.

Parts and labor only? Parts/labor and the shipping for the parts to get to me? parts/shipping to me/shipping charge of built rod? surely the state tax wouldn't need to be taxed.....

Thanks, Mike


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Re: Sportfishing Excise Tax
Posted by: Anonymous User (Moderator)
Date: October 27, 2005 09:06PM

The selling price of the rod. Forget parts, labor, shipping, etc. Whatever you sell the rod for, that is the amount that is liable for taxation.

If you sell to the end user, figure the tax at 6 percent.

If you sell to a reseller (dealer, shop owner, etc) figure the tax at 10 percent.

Do keep in mind that under the recent changes to the tax, the maximum amount is now capped at $10. So if your calculations end up showing more tax than that, you owe a flat $10.

..........

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Re: Sportfishing Excise Tax
Posted by: William Bartlett (---.proxy.aol.com)
Date: October 27, 2005 09:21PM

Tom,

Does this apply if you're not selling the rods. I have been making rods and giving them away to kids for the practice.

Bill in WV

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Re: Sportfishing Excise Tax
Posted by: Anonymous User (Moderator)
Date: October 27, 2005 09:36PM

The tax is due at the "first point of sale." if you do not sell the rod, there is no tax due.

I had one excise tax person at the IRS tell me that the tax was due at the first use, whether it was sold or not. He said even if you built yourself a rod, you had to pay the tax. Nonsense. He was wrong and still is. I asked him to find the ruling where that was spelled out. He wasn't able to do it.

The tax is due only upon the sale of the rod. The first sale of the rod.

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

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Re: Sportfishing Excise Tax
Posted by: William Bartlett (---.proxy.aol.com)
Date: October 27, 2005 09:38PM

Thanks Tom,

I don't want to be doing anything unlawful.

Bill in WV

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Re: Sportfishing Excise Tax
Posted by: James(Doc) Labanowski (---.proxy.aol.com)
Date: October 28, 2005 12:00AM

Here is a good one to ponder. If someone builds a rod and gives it to a group and gets tax write off for it would he then be responsible for the tax. I would think yes because even though there is no money change hands there is gain. Maybe someone can answer that one for all of us. I always just give it away but I know other who have done it for the tax write off.

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Re: Sportfishing Excise Tax
Posted by: Randy Parpart (Putter) (---.propel.com)
Date: October 28, 2005 12:33AM

Interesting point, Doc. I'm like you, I just give 'em away when I do this.

Putter
Williston, ND

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Re: Sportfishing Excise Tax
Posted by: Anonymous User (Moderator)
Date: October 28, 2005 07:14AM

Actually, when you give a rod away there is no gain - only a loss. Sure, you get to deduct the amount you would normally charge for the rod on your cost on Schedule C, but you stll lose money on it. The amount it adds to your "cost" column without adding anything to the sales column only factors in as a tiny savings in eventual income tax.

Again, the wording of the excise states that the tax is at the "first point of sale." If no sale takes place, you are not liable for the tax.


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

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Re: Sportfishing Excise Tax
Posted by: Robert Schuler (---.delv.east.verizon.net)
Date: October 28, 2005 09:29AM

Did commercial rod companies who sell to retailers lower their suggested retail prices to reflect the lower tax?. My guess is a$500-$800 retail rods should see a decrease of $20-40... Bob.

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Re: Sportfishing Excise Tax
Posted by: Mike Neal (---.brd.64.71.113.73.brdadsl.sktc.net)
Date: October 28, 2005 10:25AM

Thanks Tom, I think it is crazy to include the local sales tax into the amout that is figured for the SFET but taxes are crazy anyway.

Mike Neal

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Re: Sportfishing Excise Tax
Posted by: Anonymous User (Moderator)
Date: October 28, 2005 10:43AM

Robert,

They claim that they will, but....

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

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Re: Sportfishing Excise Tax
Posted by: Steve P (---.hsd1.or.comcast.net)
Date: November 15, 2005 11:16PM

I understand that some manufacturers / builders were passing on the 10% excise tax to buyers as recently as this summer.

I also understand that the tax is limited to $10 maximum as of Sept 30. Does this mean that it is illegal for builders / sellers to charge the 10% on a completed rod or blanks now?

the info below was lifted from the web:


2005 - S.A.F.E. Transportation Act of 2005 amends section 4161(a)
is amended to read as follows:
(1) IMPOSITION OF TAX- (A) IN GENERAL- There is hereby imposed on the
sale of any article of sport fishing equipment by the manufacturer,
producer, or importer a tax equal to 10 percent of the price for which
so sold. (B) LIMITATION ON TAX IMPOSED ON FISHING RODS AND POLES- The
tax imposed by subparagraph (A) on any fishing rod or pole shall not
exceed $10.
Section 4161(a)(2) is amended by striking `paragraph (1)' both places
it appears and inserting `paragraph (1)(A)'.
Effective Date- The amendments made by this section shall apply to
articles sold by the manufacturer, producer, or importer after
September 30, 2005.

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