Selling Baits

[C0MRAD]

I make my own baits mostly just for myself but I also make some for a few guys in my club.  I sell to them at cost.  More recently word has spread and others have started asking me to make them baits.  I've been making some profit on those orders but not much.  This got me thinking about what I'm allowed to sell and what I'm not.  (lets just forget the fact I don't have a business license)  I'm pretty sure I'm not allowed to sell senkos using the official senko mold from Do-it, but what about other molds?  Is everything else fair game to sell?  Some of the molds out there are obviously rip-offs of name brand baits (like the BT roboworm copy for example) and I'm curious to know if those molds are off limits for selling baits also. 

[hpssports]

Most any of the mass produced molds out there doesn't step on any patents except for some the the molds coming from the Ukraine such as the D-Bomb & Pac Chunk molds they are offering. Most of what you'll have to look for is name Trademarks. But my advise would be, if you're going to sell baits for profit you'll need a business license. All it would take is one unhappy customer to turn you in & it'll end up costing more than it's worth. 

[MT204]

And don't forget the 10% Federal tax.

[Apdriver]

Not all states or jurisdictions require a business license, per se. Here's a state by state SBA website that lists what's needed in licensing to start a business. Remember, we are all obligated to pay taxes. Sales taxes, personal income taxes, and the dreaded 10% federal excise tax. Here's the link.

https://www.sba.gov/starting-business/business-licenses-permits/state-licenses-permits

[hpssports]

You still have to file for a federal tax ID #. After federal you have to file for state tax ID for sales tax. Most wholesale companies will want a copy of your state tax ID. They usually just ask for the state ID because you can't register for state ID without a federal #. But in some cases they will accept the federal ID. But I do know a federal ID is required regardless of any state. Been filing for my company for the last 20 years.

[MT204]

Not a tax expert. Doing business as a sole proprietor doesn't require a federal tax id number,  SS number works. Not all states have sales tax so don't always need a State tax id number in every state. Some states allow registering your business name. Your City or County may require a Business license.

[bryanmc]

7 hours ago, C0MRAD said:

 I'm pretty sure I'm not allowed to sell senkos using the official senko mold from Do-it,

 

There's no reason you can't sell these.  The name "senko" is protected, the bait itself is not .

[zx250]

Unless you get really big, sell them.  I would not advertise just go word of mouth.  I don't think the IRS will come after you.

[Ezcorer]

Howdy yall!

I'm new to this forum but not selling things you make.

I make and sell a jalapeno corer called the EZ-Corer at craft shows and street festivals.

the biggest hassle i found starting out was collecting sales tax, the way around that is to add it into the price.

i sell an EZ-Corer for $6, i know in Texas .50 cents is going to sales tax. it is so much easier than having to mess with change.

if someone asks what about tax you say ITS INCLUDED, just don't say there is no tax.........(bad idea, that's another story)

 

[Baitjunkys]

The irs may not come after you for making a few bucks on baits,  What ya gotta watch for is the excise tax. When you start advertising and running websites, your on the hook.

I don't know how guys are selling 10 count bags for 2.50 and paying of .25 in excise tax myself. When you sell the baits you manufacture retail,  you get the hammer, paying it on retail pricing. You really cant even wholesale it to a retail company you own legally. 

I have heard minimum fine is 10,000.00

[mark poulson]

Once you begin to sell as a money making proposition, you're a business, and need to go totally legit.  Get an accountant, and do it right or you'll pay for it later.

It's like being a little pregnant.  No such thing.

[RTM]

Like the previous poster said, a quick call to your tax person will answer all your questions.  

Why not just come up with your own names for baits?  No need to steal others names they worked hard to bring to market.  Also decent packaging goes a long way.

[Baitjunkys]

I have found that 95% of tax professionals have zero clue that there is even an excise tax on fishing lures.

 

[smallmouthaholic]

On 4/29/2017 at 10:57 AM, zx250 said:

Unless you get really big, sell them.  I would not advertise just go word of mouth.  I don't think the IRS will come after you.

 

Incorrect! It only takes one legitimate businessman to inform the I.R.S. of your "under the table" operation and they will investigate you. The interest and penalties  may far excede what you owe.They want their 10% excise tax on gross sales.BTW- the 10% excise tax you pay is deductible from for gross income when you file year end taxes.

[Baitjunkys]

2 minutes ago, smallmouthaholic said:

 

Incorrect! It only takes one legitimate businessman to inform the I.R.S. of your "under the table" operation and they will investigate you. The interest and penalties  may far excede what you owe.They want their 10% excise tax on gross sales.BTW- the 10% excise tax you pay is deductible from for gross income when you file year end taxes.

Deductible yes, But still comes off your bottom line. It is still a expense of your gross sale number.

[mark poulson]

Just remember, lawyers and accountants are some of the smartest people around.  If you can think of a way to cheat, they've already thought if it.  Trying to hide from the IRS is like trying to hide a joint from a drug dog.

 

[Baitjunkys]

 Even the excise tax laws say you pay on baits value if you give them away for free. 

[mark poulson]

5 minutes ago, Baitjunkys said:

 Even the excise tax laws say you pay on baits value if you give them away for free. 

Is that only for people who also sell baits?

Can you deduct their value as advertising?

 

Edited May 1, 2017 by mark poulson

[RTM]

Geez is this a p*ssing  match?  Relax a bit.

 

i think 95% of people should get and fish more

[smallmouthaholic]

35 minutes ago, RTM said:

Geez is this a p*ssing  match?  Relax a bit.

 

i think 95% of people should get and fish more

Not a pissing match @ all. Simple FACTS about selling baits and operating a legitimate business.

 

[Baitjunkys]

2 minutes ago, smallmouthaholic said:

Not a pissing match @ all. Simple FACTS about selling baits and operating a legitimate business.

 

Exactly...

Simple facts... That 95% of people are unaware of. Tax man don't go by the premise,  easier to ask for forgiveness then permission. LOL

[BassHack]

On 5/1/2017 at 5:58 AM, Baitjunkys said:

 Even the excise tax laws say you pay on baits value if you give them away for free. 

Pleas explain. I am unfamiliar with this. Why is making plastic bait subject to an excise tax? If I buy liquid plastic have I already paid excise tax or am I obligated to pay it Directly to the IRS?  I have never heard of this. I thought excise tax was tax on gasoline.

[Baitjunkys]

10 hours ago, BassHack said:

Pleas explain. I am unfamiliar with this. Why is making plastic bait subject to an excise tax? If I buy liquid plastic have I already paid excise tax or am I obligated to pay it Directly to the IRS?  I have never heard of this. I thought excise tax was tax on gasoline.

https://www.irs.gov/publications/p510/ch05.html

[BassHack]

Thanks Baitjunky,

Ah. Never knew that before. I'm sure they say all the money goes to wildlife management or something.

 

Sounds like your intimately familiar with that section of code!

 

 

Edited May 8, 2017 by BassHack

[SRJ]

On another board there is a person that has you make a check out to the Reverend so and so.

Just guessing it's treated as a donation to a religious enterprise therefore not subject to taxes.