Uncle Jay Posted March 1, 2015 Report Share Posted March 1, 2015 I keep hearing about this federal sportfishing tax. Some people say you need to charge and pay it in order to sell lures on line as a business. However, ebay says you can sell up to $20,000.00 worth of items before they will send you a 1099 form. Can anyone give me more info on this? Everything I find on line is either to hard to understand or not very informative. All I want to do is open an ebay store as a hobby. Does anyone have any suggestions? Thank you, Jay Quote Link to comment Share on other sites More sharing options...
Salty's Posted March 2, 2015 Report Share Posted March 2, 2015 You cannot sell a lure legally without first being registered for the sportfishing excise tax. Don't confuse a 1099 for INCOME tax purposes with EXCISE tax. It's not the same. Guy at the RI show this weekend selling $10 needlefish lures. I looked at him and said no way he's legit. I say "You got a 637 right?" DEER IN THE HEADLIGHTS. Then when I elaborated he "Oh ya I pay taxes" Sure you do selling $10 lures with laser etched holographic finishes that are only made in China...while you advertise these lures are made in the USA. I walked away laughing. I hope he gets bagged. 2 Quote Link to comment Share on other sites More sharing options...
Uncle Jay Posted March 2, 2015 Author Report Share Posted March 2, 2015 Thank you for your response. I am guessing that what I need to apply for is a 637. I am going to look into that. Quote Link to comment Share on other sites More sharing options...
uncustered Posted March 2, 2015 Report Share Posted March 2, 2015 Here's the irs take. 10% of sales price... ouch... Pay with form 720...... http://www.irs.gov/publications/p510/ch05.html#en_US_2013_publink1000117228 Quote Link to comment Share on other sites More sharing options...
Uncle Jay Posted March 3, 2015 Author Report Share Posted March 3, 2015 Thank you uncustered. I have been on the IRS site and I found the 637 and the 720. 10% wow! we really are not free anymore are we. Kind of depressing. 1 Quote Link to comment Share on other sites More sharing options...
uncustered Posted March 3, 2015 Report Share Posted March 3, 2015 I have been depressed about our federal government for many years... oh well, back to making baits. Fishing keeps my sanity..... 2 Quote Link to comment Share on other sites More sharing options...
mohawkman Posted March 3, 2015 Report Share Posted March 3, 2015 I have been depressed about our federal government for many years... oh well, back to making baits. Fishing keeps my sanity..... Life's too short to be depressed. Keep having fun making lures and fishing...and drink up! Enjoy the ride! 1 Quote Link to comment Share on other sites More sharing options...
Uncle Jay Posted March 3, 2015 Author Report Share Posted March 3, 2015 Lol!! Oh I still plan on having fun. You're right, life is too short. Thanks guys. Fish on!! 1 Quote Link to comment Share on other sites More sharing options...
dblades Posted March 4, 2015 Report Share Posted March 4, 2015 This is actually on of the few taxes I don't mind paying, most comes back to sportsmen. 2 Quote Link to comment Share on other sites More sharing options...
LBI Posted March 4, 2015 Report Share Posted March 4, 2015 Simply outrageous. More government pocket picking. So not only do I have to pay a 7% State sales Tax in NJ, but an add'l 10% - 17% just in taxes, w/o including shipping costs? R U kidding me? Absolutely criminal. Between our new "Health Ins." for everyone law, and these sundry add'l taxes, gov't is gonna kill the regular workin guy. 2 Quote Link to comment Share on other sites More sharing options...
LBI Posted March 4, 2015 Report Share Posted March 4, 2015 Simply outrageous. More government pocket picking. So not only do I have to pay a 7% State sales Tax in NJ, but an add'l 10% - 17% just in taxes, w/o including shipping costs? R U kidding me? Absolutely criminal. Between our new "Health Ins." for everyone law, and these sundry add'l taxes, gov't is gonna kill the regular workin guy. Quote Link to comment Share on other sites More sharing options...
dlaery Posted March 4, 2015 Report Share Posted March 4, 2015 FET is used by the states to promote fishing. Quote Link to comment Share on other sites More sharing options...
bobv Posted March 4, 2015 Report Share Posted March 4, 2015 Here are the rules....................... http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Field-Directive-Federal-Excise-Tax-on-the-Importation-and-Manufacture-of-Fishing-and-Archery-Products#whois Quote Link to comment Share on other sites More sharing options...
Uncle Jay Posted March 5, 2015 Author Report Share Posted March 5, 2015 Thank you to all who have responded to my original post. I knew I could count on you guys to point me in the right direction. I have to say that I am not looking to start a lure making business as my only source of income. I just want to sell some here and there to cover part of my costs. Its not like I have a cnc machine and I am banging out hundreds of poppers and plugs everyday. Yes, that would be a business and if that was my only source of income that would be great and I wouldn't mind paying the taxes. That would just be a cost of doing business. That part I get. What I don't get is why I can't legally sell 15 or 20 lures a year without worrying about the IRS knocking at my door. There should be some limit or something for people that make lures as a hobby or just for fun like a lot of us do. I can't be the only one who feels this way. Its not fair to the guys that build lures in their free time and want to sell some of them to justify the costs involved with building them in the first place. So with that being said, I am going to continue to carve my lures with the same passion I have always had for this craft. They can't tax me for that...yet. Quote Link to comment Share on other sites More sharing options...
ravenlures Posted March 5, 2015 Report Share Posted March 5, 2015 When one sells a sportsfishing item why not just include a 1% or 2% on to the sales tax and get it over with.Then it gets rid of all that paper work. My Quote Link to comment Share on other sites More sharing options...
dlaery Posted March 5, 2015 Report Share Posted March 5, 2015 When one sells a sportsfishing item why not just include a 1% or 2% on to the sales tax and get it over with.Then it gets rid of all that paper work. My that makes the most sense to me. Retail businesses are already set up to collect sales tax. I think it would generate a lot more revenue for the cause. So who is going to get it changed? Maybe that is a job for the American Sport Fishing Association Quote Link to comment Share on other sites More sharing options...
Salty's Posted March 5, 2015 Report Share Posted March 5, 2015 ASA is a JOKE. They get paid by members for ONE thing. To LOBBY Washington. They don't have your interests at heart, they care more about the money than anything else. Any group that takes dues based on the income of your company is a sham. I refuse to join them or attend any shows that they profit off of. Quote Link to comment Share on other sites More sharing options...
smallmouthaholic Posted March 5, 2015 Report Share Posted March 5, 2015 Gentlemen- The 10% excise tax is part of doing business.The paperwork takes a whole 10 minutes to file and mail. Do I like paying it ?- But I do every quarter for the past 9 years. Penalties and interest can exceed the actual tax if you get caught. The excise tax is deductible from your gross profits. Do it right and sleep @ night-! 1 Quote Link to comment Share on other sites More sharing options...
Nathan Posted March 5, 2015 Report Share Posted March 5, 2015 Gentlemen- The 10% excise tax is part of doing business.The paperwork takes a whole 10 minutes to file and mail. Do I like paying it ?- But I do every quarter for the past 9 years. Penalties and interest can exceed the actual tax if you get caught. The excise tax is deductible from your gross profits. Do it right and sleep @ night-! Well said..I hate writing that check four times a year.. but it beats the heck out of looking over your shoulder all the time!!..Nathan Quote Link to comment Share on other sites More sharing options...
imagine_studios Posted March 6, 2015 Report Share Posted March 6, 2015 It's an ironic twist, make lures more expensive so you can promote fishing. If no one can afford the lures, there is no fishing! Quote Link to comment Share on other sites More sharing options...
LBI Posted March 7, 2015 Report Share Posted March 7, 2015 Make your own lures and tell the gov't to go pound. 1 Quote Link to comment Share on other sites More sharing options...
Travis Posted March 7, 2015 Report Share Posted March 7, 2015 I never understood the big deal, charge more for the lure. Taxes on the typical lure prices guys are selling at is chump change. 1 Quote Link to comment Share on other sites More sharing options...
bladesandbaits Posted March 8, 2015 Report Share Posted March 8, 2015 Don't know about you guys but its a "wash" for me. I get a 10% brake on components. Either way there gonna get the 10% from you or the components supplier. Quote Link to comment Share on other sites More sharing options...
llokkii Posted March 8, 2015 Report Share Posted March 8, 2015 I would rather pay the tax than the penalties. I haven't started selling any lures yet, but I had planned on selling them pretty cheaply. I am not a fan of expensive fishing lures and this was a major factor in my decision to start making my own and eventually selling them locally. I have no allusions or plans on selling them in larger volumes as it is just me doing it and I still want to make sure I have plenty of fishing time. Even at 10%, the lures will still be affordable so I don't see the big deal in tacking that onto the end price to make sure I have my butt covered and can still make enough profit to fund my luremaking hobby. The way I see it, CYA and your won't be sorry later if the IRS comes knocking. Quote Link to comment Share on other sites More sharing options...
Jdeee Posted March 8, 2015 Report Share Posted March 8, 2015 Just curious Do you have to pay it in tax free states like New Hampshire ? I understand it's a Fed tax but these states claim to be tax free? Quote Link to comment Share on other sites More sharing options...
