ChadK Posted March 29, 2008 Report Share Posted March 29, 2008 Ok, this is a pretty complicated subject, but I have a question I was wondering if anyone has tackled yet. We know that when selling through our sites to the end user that the "60%" rule can apply to the federal exsise tax on fishing related products. My question is, how do you handle the exsise tax when you are selling products on consignment out of a retail outlet. Do you still use the 60% rule? Or is it just the 10%? Or is there any at all due to the retailer being responsible since it's going through his cash register. Can this be simply answered, or do I need to supply more information? Quote Link to comment Share on other sites More sharing options...
Spike-A-Pike Posted March 29, 2008 Report Share Posted March 29, 2008 Your way to close to the April 15th deadline. Contact IRS, explain your situation and take what ever action they advise. You may still need a Form 720. Quote Link to comment Share on other sites More sharing options...
JSC Posted March 29, 2008 Report Share Posted March 29, 2008 ChadK You will in this case (my Opinion) add the 10% tax to the bill that you give the dealer .... It is, in this case, what YOU sell it for. (even thou it is on consignment .. what ever kind of deal you have the bottom line is what did you charge the dealer .. that is what you will have to pay the 10% on 720 applies to ALL Fishing Tackle Sold by the MFG) Hope that helps JSC Quote Link to comment Share on other sites More sharing options...
SwampBaits Posted March 29, 2008 Report Share Posted March 29, 2008 I think the dealer would be responsible for the tax, beats me though. It'd be nice if they made tax documents that make sense to the average joe. Quote Link to comment Share on other sites More sharing options...
Smallie Posted March 29, 2008 Report Share Posted March 29, 2008 The way I understand it, the tax is added at every step of the way; unless you provide a tax ID number. So, if you buy the materials and don't give a tax ID number, you pay 10%. When you sell to the distributor, you add 10% unless they provide a tax ID number. When the distributor sells it, the 10% comes into play again. Unless everyone but the person selling to the consumer (fisherman) has a tax exempt status (tax ID number) then 20% (non-distributed) or 30% (distributed) will be paid on the bait. Quote Link to comment Share on other sites More sharing options...
james bradshaw Posted March 29, 2008 Report Share Posted March 29, 2008 Figure what a distributor price is and you pay 10% of what your distributor price is. It's that simple! James Quote Link to comment Share on other sites More sharing options...
JSC Posted March 29, 2008 Report Share Posted March 29, 2008 Smallie got part of it .. The components that are taxable (hooks, spinners & etc) a 10 % tax is levied on the MFG if you are buying to build from the component you must have a tax exzempt # to give to the supplier ... then when you build the final product to be sold to the end user be it direct, thru a retailer or distributor you must include the 10% in the cost of the sale (bottom line of invoice) The IRS check by Invoice .. The Distributor or Retailer do not pay any more on the item you have sold them unless you sold say soft plastic in bulk and they repackage it .. and they must have the tax exemp #. I hope I did not make this more complicated than it really is. My 2 cents JSC Quote Link to comment Share on other sites More sharing options...
ChadK Posted March 30, 2008 Author Report Share Posted March 30, 2008 JSC, If I understand you correctly, 10% of what I invoice the dealer for is what I pay. This would be no different than just selling it retail, regardless that its on a consignment basis correct?? I'm not one that likes to add another tax on the invoice so I'm just building it into my price so to speak. The 60% rule comes into play when I'm selling to the end user off my site correct? Quote Link to comment Share on other sites More sharing options...
JSC Posted March 30, 2008 Report Share Posted March 30, 2008 ChadK If you have the 10% included in the cost of the item .. that is sufficient. I used the add on at the balance of the invoice if it had not been included as an example. Sorry for the confusion. By the way (this was given to me by a IRS agent who was checking me & I got credit for back a few years) if price includes excise tax it would be calculated at .09091. Some actually add on the 10% at the end of the invoice which is what I would do if I had it on consignment. The 60% comes into effrect when Selling Retail. JSC Quote Link to comment Share on other sites More sharing options...
Smallie Posted March 30, 2008 Report Share Posted March 30, 2008 What is the 60% rule? Quote Link to comment Share on other sites More sharing options...
JSC Posted March 30, 2008 Report Share Posted March 30, 2008 Smallie See this thread (read it all) "Federal Excise Tax On Fishing Tackle" JSC Quote Link to comment Share on other sites More sharing options...
dlaery Posted March 30, 2008 Report Share Posted March 30, 2008 Try this link. http://www.asafishing.org/asa/govern...xcise_tax.html Then click on Field Directive Quote Link to comment Share on other sites More sharing options...
