insainity Posted February 2, 2004 Report Share Posted February 2, 2004 Ive recently desided to start makeing my own spinner baits.Mainly due to not being able to find what i wanted on the market.Now after seeing how cheap i could do this and how much better the qaulity could be.I got to wondering how i could go about selling some of these to fund the ones i keep for myself if nothing else.But i would not want to be sued by Strike King or some patten holder somewhere.And sence im not verying the consept of the spinner bait very much i got to wondering.Could i sale them?Or would i have to pay some lawyer for a patten search and see who id have to pay for the orginal idea? Quote Link to comment Share on other sites More sharing options...
siebler_custom_baits Posted February 2, 2004 Report Share Posted February 2, 2004 All you have to do is be carful of the names you use. You can not patent anythibng that immitates nature so your OK with designs. Quote Link to comment Share on other sites More sharing options...
Gr8flyz Posted February 3, 2004 Report Share Posted February 3, 2004 If you're making basic spinnerbaits from stock type components that we all use, you should have no problems. If you copy a companies patented component designs, like some special blade, or as SCB has said, infringe on trademarked names, you'll certainly cause yourself legal problems. Check into information about excise taxes too. If you make & sell tackle you're supposed to pay the excise tax. Don't get in trouble with the IRS either! There has been some past discussions on similar subjects, so a search of the site might give more info. Quote Link to comment Share on other sites More sharing options...
insainity Posted February 3, 2004 Author Report Share Posted February 3, 2004 Thanks guys! Im not plaining on them be anything but a plain spinner baits.So hopefully i want run into any problems.Yea i need to check into the tax stuff also. Quote Link to comment Share on other sites More sharing options...
Wire bender Posted February 4, 2004 Report Share Posted February 4, 2004 It's close to tax time in the US. If you use an accountant talk to him when you take papers in for filing. I did this last year and had a nice surprise regarding the use of a senior's hobby store here. They collect sales tax, so no problem there, and as a senior I can place items there on consignment. There is a limit on what I can sell before needing accountant's help, but that would be a lot of lures when I'm selling them for under $2. Store marks them up 30% so customer still get a good deal. Made a few bucks last year, mainly selling inline spinners. They sold out and I'm now making new ones for them. It was enough to pay for my new supplies this year. Oh yes, I'm old. Phil Quote Link to comment Share on other sites More sharing options...
piddler Posted February 4, 2004 Report Share Posted February 4, 2004 you're still supposed to pay excise tax even if you're 104. Quote Link to comment Share on other sites More sharing options...
Wire bender Posted February 4, 2004 Report Share Posted February 4, 2004 Piddler, thanks for the laugh and the reminder. Must have had a senior moment. My Grandmother made it to 102 so I may get to 104. Here is the breakdown on my inline spinner. Hook .12, split ring .02, wire .01, French blade .05, clevis .01, body .07. Beads are not subject to the excise tax. We had a problem with the amount of squirrel tail used per each and the cost of the tail. If I kill it, it's free, same if I get one from friends. Darn things didn't have any UPC for tracking. Think the suppliers charge around $2. The amount agreed on was .01. Also a problem with the amount of thread and head cement. Was ignored. Total per lure subject to the tax was .29 or .03 in tax. Panfish lure, wire .01, Dakota blade .06 and hook .05 for a total of .12 or .01 in taxes. Wonder what they do with the kids fruit drink stand sales these days? Ain't life grand. Quote Link to comment Share on other sites More sharing options...
SeminoleFan Posted February 4, 2004 Report Share Posted February 4, 2004 I belive your supposed to pay excise tax on the retail value of the lure. So if you sell your lure at 2.99 @ 10% would be .299 cents or rounded to the penny .30 cents You need to make sure that you understand the way excise tax works before you get screwed by the IRS. Hope this helps. Rick Quote Link to comment Share on other sites More sharing options...
piddler Posted February 4, 2004 Report Share Posted February 4, 2004 Seminole is right and you have to send it in every quarter. I think it's form 720. Most outlaw manufacturers make a deal with the store to sell on consignment and deal only in cash. You have to be careful though, because the legitimate manufacturers will turn you in. The big companies are the ones that encouraged this tax to eliminate competition but now the big boys import all their baits and don't pay any manufacturer's tax. Quote Link to comment Share on other sites More sharing options...
Gr8flyz Posted February 4, 2004 Report Share Posted February 4, 2004 The way it was explained to me by an IRS excise tax auditor, the excise tax is 10% of the selling price. If you sell wholesale, you pay the tax based on the wholesale price, and if you sell retail you pay the tax on the retail price. However, if you primarily sell retail, and only occasionally sell wholesale you may be required to pay the tax on the retail price anyway. You have to establish that you sell wholesale on a regular basis in order to pay the tax based on a wholesale price. Excise tax is not determined based on the cost, but you can get credit for any excise tax you pay when you buy components. You cannot get credit for sales tax, as far as the excise tax is concerned, but you can when you file your income taxes. You can include the excise tax in your total price for retail sales, provided you establish that fact. For example if you sell a lure for $1.00 each retail, with the excise tax included, then the tax is based on 90% of the actual selling price. Basically you are selling for 90 cents each plus 10 cents excise tax, but by doing this you end up paying more tax, which they don't argue with. If you sell large volumes this could add up, but for most of us it's not a big concern. You should let people know in writing that the excise tax is included, on your invoices, which is what will establish that you do it that way. The excise tax is a manufacturers tax, but if you sell fishing tackle made by another manufacturer, you can still be responsible for the excise tax if they don't pay it. So make sure you get it in writing that they're paying the tax, or that it's included in the wholesale price you pay. Of coarse every auditor that I've talked to has varying opinions on how things should be done. Squirrel tails are not taxable, neither are feathers or fur items. Quote Link to comment Share on other sites More sharing options...
Wire bender Posted February 4, 2004 Report Share Posted February 4, 2004 insainity - hope you're learning from all of this. I am, but now I have a question. Gr8flyz wrote: "Excise tax is not determined based on the cost, but you can get credit for any excise tax you pay when you buy components." I had read before about beads, etc. not subject to the tax and there was something in that thread that must have confused me. (And I confuse easily.) I am now assuming that the beads, however, become subject to the excise tax if used in a finished fishing lure as they are included in setting the price. Correct? So the cost of the components I had listed for the inline lure was .29. Therefore, .03, the amount of excise tax already paid by a supplier, can be subtracted from my wholesale figure. The same for the .01 for the panfish lure. If I wholesale the panfish lure for .50 the excise tax I should pay is .05 minus .01. The inline for $1.50 so the tax is .15 minus .03. Are we all on the same track now? Hope so. When we finish this we may start with another math problem about trains moving at 100 miles an hour. Quote Link to comment Share on other sites More sharing options...
SeminoleFan Posted February 5, 2004 Report Share Posted February 5, 2004 Trains at 100 mph ?? Can I bring my accountant? LOL Quote Link to comment Share on other sites More sharing options...
topher Posted February 6, 2004 Report Share Posted February 6, 2004 I was told that the stainless wire is tax exempt too. I see that in Lakeland's catalog that they do not charge excise tax on their wire, but Battlefield wire does. Does anyone know who is right on this matter, or is there a special rule about it? Thanks! Chris Quote Link to comment Share on other sites More sharing options...
larrybass Posted February 14, 2004 Report Share Posted February 14, 2004 Hey there boys, I'm new in here but I couldn't resist putting in my 2 cents worth. Fishing lures and the tax man and the interpretation of ALL his rules, which of course, are designed to snuff out the little guys like us, is mostly why I have never done a lot of commercial selling of tackle. I got a large charge outta Wire benders post! It was very near my own experience, back in the past when I did make an attempt to please the tax collectors with my budding "jig business". A decade later my next peek at the tackle marketing world, was at a small local flea market, where I charged no taxes what so ever and like at least 70% of the other dealers there, we didn't even report the little bit of income we came away with by the end of the day. I can only say that from that additional experience, I figure Canadians must be a little more inclined to moonlight, owlhoot, sell without permits, etc. I know a bunch of good folks who run a yard or garage sale a couple of times during the summer and NONE of them declare any of the little bit of earnings made. If this offends any of you, I'm sorry. Contrary to what you may think, we are not crooks, trying to rip off the poor government! We are simply the little people, who are attempting to ply our small trade in our small circles, hurting nobody in the process and helping many. The dorky tax collectors should not even begin to question you on ittsy bittsy little one man operations where it's impossible to figure costs accurately for threads, hairs, feathers or whatever the little man needs to operate his little passion. Being Canadian may not be as warm as most of you folks are there in the USA but I like the fact that we still do have a bit of a free rein left in the "Little Guy Tackle Manufacturing/Marketing" field in this vast country, and it helps that we are a little bit ballsy too, as they say. There are many wealthy folks out there that will tell you that life in general is based on risks. We Canuks generally, like to live a little. Even if it means having to side-step the BRILLIANT and totally unfair and demanding rulers, of our fine country, once in awhile, in our own unobtrusive and beneficial to all concerned, little ways... P.S. Man, I love this board... lb http://larrybass.bravepages.com/Fishing.htm Quote Link to comment Share on other sites More sharing options...
