Val Posted February 26, 2020 Report Share Posted February 26, 2020 (edited) I'm wondering if I've missed anything? My husband started making soft plastic baits last August, mostly for himself. Very quickly people were asking to buy them, so we got our EIN, DBA, logo, checking account, Quickbooks, etc... He has sold some to friends and this weekend we took an order to a local convenience store near the lake. I just heard today about the excise tax on lures. So I'm assuming we need to get registered, and complete form 720? We've had a business before, but it was not anything that required an excise tax. I thought we had done everything we were supposed to do to be able to start selling to other people. Yikes, have I missed anything else? I appreciate any and all input! Val Edited February 26, 2020 by Val spelling 1 Quote Link to comment Share on other sites More sharing options...
pengerran Posted February 26, 2020 Report Share Posted February 26, 2020 I'm assuming soft Plastic baits fall into this. "Sport fishing equipment (other than fishing rods and fishing poles) (IRS No. 41). The tax on sport fishing equipment is 10% of the sales price. The tax is paid by the manufacturer, producer, or importer. Taxable articles include reels, fly fishing lines (and other lines not over 130 pounds test), fishing spears, spear guns, spear tips, terminal tackle, fishing supplies and accessories, and any parts or accessories sold on or in connection with these articles. See Pub. 510 for a complete list of taxable articles. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 41." It is filed quarterly with 1st being Jan, Feb and March. Due by April 30. I'll attach the link. PITA but part of it. Just increase price by 10% to cover. I'm assuming soft Plastic baits fall into this. I'm a rod guy that just does baits for my personal use. I have to pay a $10 flat fee per rod. So really my customers get double charged. I pay the 10% or $10 fee so I add that back to cost then I pay IRS $10 per rod so I add that into cost. When all fees and taxes are added back in my price is increased by $30 to $40 per rod. https://www.irs.gov/forms-pubs/about-form-720 Quote Link to comment Share on other sites More sharing options...
mark poulson Posted February 26, 2020 Report Share Posted February 26, 2020 You should contact a CPA that specializes in small businesses, particularly lure making businesses. There's a lot to know, and lots of expensive ways to stub your toe, so pay the expert to help you, and you won't be missing something crucial. You'll need a CPA eventually so start out right. 1 Quote Link to comment Share on other sites More sharing options...
Driftwood Posted February 26, 2020 Report Share Posted February 26, 2020 39 minutes ago, mark poulson said: You should contact a CPA that specializes in small businesses, particularly lure making businesses. There's a lot to know, and lots of expensive ways to stub your toe, so pay the expert to help you, and you won't be missing something crucial. You'll need a CPA eventually so start out right. This is sound advice. 10% excise tax is charged for any items you manufacture. Also remember that any finished product is taxable as saleable items and inventory tax is due while raw materials are a tax write off. 1 Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted February 29, 2020 Report Share Posted February 29, 2020 (edited) Research constructive sales price as well. If you sell retail you fall into this category. 10% was designed around manufacturers at wholesale pricing. On retail you can pay on 60% of the sale price. Its a lot to keep up with tho. Edited February 29, 2020 by Baitjunkys Quote Link to comment Share on other sites More sharing options...
