I have a customer that needs a rod rebuilt. Basically they broke the rod and can't get in touch with the origonal builder. Loomis is warrantying the blank and I am basically just rebuilding this for him. So, my question is, do I need to collect and pay the Fed. Excise tax on this rod, or is it considered a repair?

Scott Sheets
www.smsrods.com

If you're repairing (splicing) the old rod, it's a repair.

If you're building a new rod, which it will be if you use a new blank, it's a new rod.

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That at times is a gray line. If you modify or change the rod you charge a Exise tax. If you just fix a broken part it is a repaire. Make notes and have all your paper work avalible just incase you are audited, pictures well also help, (before and after). Pictures saved my back side 10 years ago.
Good Wraps Bob

I think I'll just pay the tax. Since I didn't build it the first time I am basically just assembling parts from a new customer...

Scott Sheets
www.smsrods.com

You're building a new rod, the tax is indeed due. Charge him.

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so how much is this tax please?

Ron B

It sounds like you are building on a new blank, with new gripes. Are using his old guides and possible the reel seat. The feds. well consider this a new custom rod. so charge your customar the excise tax, business and state tax. Claiming that you just assembled the parts well not fly with the tax guys.
Good Wraps Bob

Ron,

They are talking about the Federal Excise Tax on sport fishing equipment at point of manufacture or import. There is an article on it in the library at the top of the page

Mike (Southgate, MI)
If I don't want to, I don't have to and nobody can make me (except my wife) cuz I'm RETIRED!!

Mike it sounds like he is manufacturing a new rod using some old parts. I was audited about 10 to 12 years ago. An this qusestion came up. The question was replacing old guides with a differnt style along with a differnt reel seat. They came back as saying it was a remanufactured and was taxable
Good Wraps Bob

Thanks for the info guys. I was kind of thinking the same thing, just wasnt sure.

Scott Sheets
www.smsrods.com

10% or $10, whichever is less.

In the case of a direct sale to the customer, the constructive sale price upon which the tax is liable would be 60% of the total. On that amount, 10% or $10, whichever is less.

I think I figured this up and on any rod that you sell for more than about $170 the tax is a flat $10.


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