The Federal Sport Fishing Excise Tax must be collected on any sale, whether it be an out of state or in-state sale. If you are manufacturing any piece of tackle used in the catching of game fish, or adding two or more components to an existing piece of tackle YOU ARE RESPONSIBLE for this tax. You need a business license from your state and a Federal Tax ID.
The IRS has been cracking down due to multiple complaints from manufacturers who do legally and rightly pay the tax. Believe me if you are making tackle and no paying the tax (and this is found out by other guys who do pay the tax) you will be turned in. Collecting the tax and filling out tax forms is not fun. Plus, if someone is not paying the tax that extra money goes to your bottom line, which it doesn't to someone paying the tax. The mantra soon becomes "If I have to pay the tax, then you are too".
American Sportfishing Association
This is why you need to contact a professional not take advice from anonymous guys on a website.
Feel free to contact me if you need anymore information or have other questions.
matt
