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I was wondering on excise tax that you are supposed to pay, do you pay 10% on the sale price of just the baits, or do you pay the 10% on sale price plus shipping and handeling. example say you sell 6 baits for $8.00 plus $2.00 shipping, would the 10% you owe be on $8.00 or $10.00. Thanks in advance I am new to the excise tax and trying to do things the right way.

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Hi David, I don't pretend to know about excise tax, but in my mind the .80 would come out of the 8.00. Therefore your total would still be 10.00. If you are going to add .80 additional for the cost of excise tax, then your sale price would be 8.80 making the excise tax .88 and your total 10.88. Am I making sense :?Pop

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Hi Pop, I think I'm going to say the same thing your said, Yes the excise is on the selling price. So if the final price to the customer is $8, then the selling price would be $7.27 and the FET would be 73 cents and the final price would be $8 w/FET and $2 shipping.

The way I come up with the example of my earilier post was,

if my bottom line price for my product is $8, then I would add 10% FET, 80 cents. Then my final price to my customer would be $8.80

I make a price list for my customers and it has the final price, FET included, but when I invoice, it is priced at my price I have to have and then the FET is added to the bottom of the invoice, just like sales tax.

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Let me make a suggestion. For example, if you purchase an item wholesale for .60 and you want a 40% mark up, most people would take 40% of .60 and charge .84 which would be wrong. Actually a 40% mark up would make your price 1.00. The way to prove this is to take 40% of 1.00 and the net would be .60 cost. Radio Shack has a small hand held calculator (under 20.00) which does this calculation very easily. If you are doing this type calculation on a regular basis I suggest purchasing one. Just ask for a calculator that does "gross mark up" . Hope that helps. Pop

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if i do not file for a 637 tax exempt status, can I deduct the excise tax I pay to places like or worth on my quarterly form 720?

Did you mean

if i do file for a 637

If you do not file for 637, you would not file a 720.

If you paid excise tax to a company and you have a 637 registration number, then when you file you 720, you can deduct any excise tax you have paid. You will need to keep good records. Have a invoice that shows you paid that excise tax.

The IRS comes to see me every 2 years to check my excise tax. They look at my excise tax quarterly reports and tour my facility. They have never audited me. They do ask lots of questions. Very easy to get along with. They want to make sure I am doing it right.

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The rules for Federal Exise Tax on Sport fishing equipment can be found the instructions for Form 720, Part II.

I'm sure that you'll find that the 10% exise tax is not added on to the selling amount, but taken from it. ie: you sell a bait for $10.00, you owe $1.00 in excise tax and have a gross profit of $9.00.

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Ok just read some of that site and some other sites. They do not charge this tax on all items (manufactured or not). This is why I have never dealt with it other then tires and gas. So here is how I will fight this extra hit to the pocket that really hurts the small business. Put on your packaging "Art Form. Not intended to be fished with" Then don't pay the tax. They will try to come around and nab you that is fine but this tax does not applied to art. They may force you to start paying it but oh well they had to take you to court and you may well win. I love fighting the IRS. I have won 2/3 law suits with them so far on other stuff I will love to make it 3/4.

Just an FIY. The law suit that I lost almost took everything I owned. This was the last suit that I had when I started telling them that they could not force me to pay income tax. I still feel I right but hey its hard to win the government a multi billion dolor company with the judges on their pay roll.

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The Federal Aid in Sport Fish Restoration Act, commonly referred to as the Dingell-Johnson act, passed on August 9, 1950, was modeled after the Pittman-Robertson Act to create a parallel program for management, conservation, and restoration of fishery resources. The Sport Fish Restoration program is funded by revenues collected from the manufacturers of fishing rods, reels, creels, lures, flies and artificial baits, who pay an excise tax on these items to the U.S. Treasury.

This is a small description of what the excise tax is for.

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The 10% excise tax is expensive but at the same time it is necessary to build and maintain boat ramps and replace fish that are either guthooked or removed from the water by our baits.

Ok just read some of that site and some other sites. They do not charge this tax on all items (manufactured or not). This is why I have never dealt with it other then tires and gas. So here is how I will fight this extra hit to the pocket that really hurts the small business. Put on your packaging "Art Form. Not intended to be fished with" Then don't pay the tax. They will try to come around and nab you that is fine but this tax does not applied to art. They may force you to start paying it but oh well they had to take you to court and you may well win. I love fighting the IRS. I have won 2/3 law suits with them so far on other stuff I will love to make it 3/4.

Just an FIY. The law suit that I lost almost took everything I owned. This was the last suit that I had when I started telling them that they could not force me to pay income tax. I still feel I right but hey its hard to win the government a multi billion dolor company with the judges on their pay roll.

I think this is the first time on the forums where someone has actually posted advice suggesting how to beat taxes. You can also see what happens when this someone tries to do that...they almost lose everything they own.

The best policy is to always be straight with the tax people. We are all human and prone to making mistakes. When we make an honest attempt to do whats right and we mess up there is always a chance the tax people will work with us to get it right. If we are trying every which way to "beat them at their own game" and we do mess up there is nothing written in stone commanding them to be nice to us.

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Were do you file for the permit to be a manufactor ?

I read some of those links but did not see ( file here )

What about when you buy products to use to make the bait, hooks, do-it molds ect. we do not pay tax to get the items, do we also have to pay tax to someone when this all comes down ?

Do you get to deduct the cost of material on what it cost to make the bait before you get the total selling profit ?

say you sell a bait for $10, it cost $7 for material, profit $3 ?

Does Uncle sam gets $1 or gets $.30 ?

Or is that when you file taxes at the end of the year that you get to claim cost ?

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Were do you file for the permit to be a manufactor ?

I read some of those links but did not see ( file here )

What about when you buy products to use to make the bait, hooks, do-it molds ect. we do not pay tax to get the items, do we also have to pay tax to someone when this all comes down ?

Do you get to deduct the cost of material on what it cost to make the bait before you get the total selling profit ?

say you sell a bait for $10, it cost $7 for material, profit $3 ?

Does Uncle sam gets $1 or gets $.30 ?

Or is that when you file taxes at the end of the year that you get to claim cost ?

First you have to get a Federal ID number. Call the IRS and they will help you with this.

http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

After you have been issused a Federal ID number, then fill out an Application for Registration, Form 637.

http://www.irs.gov/pub/irs-pdf/f637.pdf

After you get you Form 637 approved. Then you furnish this to compainies that also have this same Form 637 registration,(when I say "same" I don't mean that there are different forms, either you have one or you don't)

and at your request you can purchase products without excise tax.

Some compaines that sell lure making supplies may not have this form 637 and have paid the exceis tax form their supplier.

You only pay tax on things used to catch fish. A Do-It mold does not catch fish. The jigs you make do.

say you sell a bait for $10, it cost $7 for material, profit $3 ?

Does Uncle sam gets $1 or gets $.30 ?

Or is that when you file taxes at the end of the year that you get to claim cost ?

You owe Uncle Sam $1.

It is 10% of the sale price. No tax on the shipping unless it is included in the sale price. If you sell you product for $100 you owe $10 excise tax.

If you sell the same product for $90 plus $10 for shipping, you owe $9 excise tax.

This is a sales tax not income tax. You file a 720 form and pay excise tax quarterly. 10% of total sales.

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http://mdc.mo.gov/areas/hatchery/lostvalley/

This is a link to a fish hatchery that I live about 5 miles from.

If you read this it tells how much of the money spent to build the hatchery came from excise tax.

The fish they raise is used to stock lakes in the

midwest.

This is a quote from the Warsaw web site:

The Lost Valley and Visitor Center opened in October of 2000. The hatchery now occupies 971 acres of land and will be producing nearly 15 million fish per year.

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You only pay tax on things used to catch fish. A Do-It mold does not catch fish. The jigs you make do.

Just want to make sure I am on the right track here. This must be the reason I pay excise tax on the hooks I buy from shorty's but not on the blades from worth on the skirt tabs from my distributor. Am I correct on this? Another question. When you buy a jig at walmart, does walmart pay the excise tax or does the jig maker?

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If you have a manufacturer make some jigs for you and they are ready to sell when you receive them, then this manufacturer will collect the excise tax. If you furnish him everything that is needed to make the jigs, hooks, lead, etc.. and say it is your private design and you own the molds to make this jig, then I think this is saying that you are the manufacturer and you will collect the excise tax on the sale of your product

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