Hi,
I have a question on the FET that someone might be able to clarify. When I purchase components from a supplier, I pay for the FET at that moment because I do not have the exemption. When I build a rod for a customer, I need to charge and pay the FET again on the same parts because the rod is a new item that did not previously exist. This part I understand. However, if a client wants to purchase components from me, do I need to collect FET again? I also plan on calling the IRS, but any info would be greatly appreciated.

Thanks,
Andres Perez
Miami, Fl

The FET is always added and collected at the first point of sale.

If you are simply selling the components which you previously bought, then the FET has already been paid at the first point of sale and does not need to be charged or collected again.

When you build a custom rod, and sell it, you become the first point of sale for that item and the tax must be added and collected.

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

There is a rod builders hand book decribing all the FET regs but I cant comprehend it. I believe it states that the end product gets taxed 10% or $10.00 which ever is LESS but there are no provisions for that on the 720 form. It would cost me more for an accountant to prepare all the forms than I make on sales. Here's a couple numbers for you. Jack Brown 231-932-2057 or Freda George 636-255-1320. These contacts are on the front page of my Rod Builders Handbook. Good luck!!

Tom and Jim,

Thank you for the info. I’ll make some calls to verify, but I think Tom hit the nail on the head.