cphubert

Your correct this is the IRS FY2000 ruling document for 60%, copied to my accountant, Thanks IRSCSP60%.pdf

Determination of Sale Price In General. The tax on sport fishing equipment, electric outboard motors, and bows is based on the price for which the article is sold. Constructive sale price; background. The basic sale price rules assumes that the manufacturer sells the article in an arm’s length transaction (that is, in a transaction between two unrelated parties) to a wholesale distributor that then sells it to a retailer that resells to consumers. However, if an article is sold other than to a wholesale distributor or at less than a fair market arm’s length price, the law requires that the tax calculation be made on a constructive sale price (CSP) rather than the actual sale price. Constructive sale price; general rule; § 4216(b)(1). If a manufacturer sells an article- • At retail, • On consignment, or • At less than fair market price and in other than an arm’s length transaction, then the tax is to be computed on the highest price for which the article is sold to wholesale distributors, in the ordinary course of trade, by manufacturers as determined by the IRS. For articles sold at retail, the tax is computed on the lower of CFR goes on and on other sections list (CSP) at 75% as noted the private ruling listed at 60%, keep good records and use your own judgement or as other have use the actual sales price.

Not sure if a fishing rod is a good example, as a manufacturer of a rod the max excise tax paid is $10.00 per rod (rod manufacture's probably have better lobbyist! ) Manufacturers not in a relationship with a wholesaler and selling direct retail pay the lower of -10% of wholesale constructive sales price (as determined by the IRS!) usually accepted as 60-75% of MSRP -or the actual sales price Selling retail with a relationship with a wholesaler manufactures pay 10% of the lower of -actual sales price -highest price manufacturer sells to wholesaler agree with your math

Found this site surfing for current information on the federal excise tax for manufacturing and decided to join up. Used to tie bucktails for resale for a shop a long time ago and was considering giving it a go again (I'm retired) selling direct retail, probably custom orders. At any rate I like the site, good information and like minded people. cphubert