[Ansteorra-archery] The arrow tax

[Eadric Anstapa]

The federal excise tax on archery equipment has been around for decades 
and I never had a problem with it.  It was not just for archery 
equipment but also various other  firearms and hunting and fishing 
equipment.  The tax was traditionally 12.4%.  I have never had a problem 
with it  because the funds raised from this tax  were relegated 
specifically to wildlife conservation an education efforts and therefore 
sportfishing and hunting type items is what was taxed.  For instance any 
bow over 30# had to be taxed.  Any bow under 30 pounds and any arrow 
under 18 inches did not have to be taxed (unless the short arrows were 
intended for use in a taxable bow i.e. crossbow bolts) (the tax for bows 
is 11%)

If you manufacture and sell bows or crossbows then you have to collect 
and submit the tax else you are guilty of federal tax evasion. The 
statutes defined  "manufacturer" to include any person who produces a 
taxable article from scrap, salvage, or junk material, or from new or 
raw material, by processing, manipulating, or changing the form of an 
article or by combining or assembling two or more articles.  The term 
also includes a "producer" and an "importer'.

The problem was that there were a lot of people doing lots of hinky 
things to get around collecting the excise tax.

For instance "arrows" were taxable.  Many shafts, fletches, nocks, and 
target style points were not (hunting broadheads were not).   So what 
was happening is that people would sell incomplete arrows and therefore 
they would avoid the tax.

Every wonder why if you ordered a set of arrows from some place like Red 
Feather, F/S or other supplier they would ship finished shafts, with 
nocks and fletches installed, shafts cut to your specified length and 
with point tapers on them,  but the points would not be installed but 
only included in the box?   That was so they could say that they had not 
sold completed "arrows"  and therefore would avoid the federal excise tax.

Ever see a bow marked as 30xx#  rather than 30#?  That was partially so 
they could sell it as a 30# bow (untaxed) even it it actually drew over 
30#.  The same would be true for any bow that was marked as 30-35#.

Arrows spined 30-35# people would often avoid the tax by simply saying 
that they were not necessarily intended for bows over 30#.

They then starting taxing all arrow components such as nocks, points, 
shafts, etc. at 12.4% if they were suitable to be shot from a taxable 
bow.  But there were people who had creative ways to get around that.  
the would play with the "suitable to be shot from a taxable bow" part of it.

So to get people to pat the tax back in 04 to get people to collect the 
tax for arrows they changed it to a per shaft tax.  They started off at 
39 cents and then crept up.  At the time a typical good set of wooden 
shafts cost about $2 a shaft.  So the that was a pretty high tax equal 
to about a 20% tax on traditional archers using wooden shafts.  But a 
high tech modern carbon fiber shaft might sell for $10 a shaft so a 4% 
tax was hardly noticed and even a typical good quality name brand 
aluminum shaft cost about $5 a shaft so a 8% tax didn't seem onerous.  
remember these costs are collected by the manufacturer, they are an 
excise tax and not a sales tax, and since they are a fixed cost they are 
built into the cost out of the factory and most archers and hunters were 
and still are not even aware that the excise tax was even there.

To be sure  the 39 cents per arrow shaft that crept up to 43 cents 
unfairly burdened the traditional archer While the modern compound bow 
shooter using Easton GameGetter shafts, or Gold Tip or Carbon Tech 
hunter shafts hardly noticed the increase.

Once they started taxing the shafts they dropped the tax on individual 
components like fletches, nocks, and points.   So while your shafts may 
have had a 43 cent tax on them,  you effectively should have seen  a 
12.4% reduction in price on points, nocks, fletches, etc.  But I never 
saw any reduction in price on those components and those manufacturers 
just seem to pocket that extra 12.4%.

So the low end domestic manufacturers of wooden shafts for children 
complain that they are driven out of business and that their sales have 
dropped sharply.  While they did did carry an unnecessarily high portion 
of the tax burden ins  the part of the equation here that is not 
considered is that the availability of inexpensive imported composite 
shafts for the low-end and children's market has increased.  A big part 
of the reason why the sale of wooden children's arrows has decreased so 
dramatically is that the  more people are instead buying fiberglass and 
carbon for the kids since those shafts stay straight and last forever in 
typical use.

Don't get me wrong.  I am happy the tax has been modified so that it is 
no so regressive, doesn't place as much of a burden on the low end, and 
doesn't place more of the burden on the traditional archer.  the latest 
revision of that tax code was flawed and they are trying to correct that 
but in general I support the tax because those monies were earmarked to 
go do things rather than simply going into the general fund for congress 
to waste as they see fit.

 Regards,

-EA

Ulf Gunnarsson wrote:
> As a reminder, this list is *not* for the discussion of controversial
> modern world politics.  It's about archery here in Ansteorra.
>
> So I won't go into my personal opinions of last week's economic bailout.
> Catch me sometime off-list; I'll fill your ear.
>
> The thing about it that is pertinent to us archers is: 43 cents.
>
> Tucked into the new plan was something to fix the problems that hit us
> in 2004 when a flat 43 cent tax was added to each arrow shaft.  It looks
> like that is getting lifted or set back to a percentage (I haven't found
> out which yet).
>
> http://www.oregonlive.com/money/index.ssf/2008/10/an_oregon_arrow_maker_suffers.html
>
> I didn't notice a change yet in Rose City's prices, but this could mean
> lighter weight arrows are going to be affordable again.  Rose City's
> sales have dropped to a tenth of what they were four years ago.
>
> I would be interested in hearing any details of the exact change and
> when it will take effect.  We have several archers who shoot 30# bows or
> lighter.
>
> Various organizations have dropped their archery programs due to the
> increased prices.  Namron has children shooters and I know we are not
> alone.  Now would be a good time, in my opinion, for groups to step in
> to that gap and pull in those kids that would have been shooting if
> their scout group still had archery.  This isn't about the recruiting
> potential; it's because we all know the good that learning archery does
> for children, the focus and safety they learn, the social skills they
> pick up.
>
> Master Ulf Gunnarsson
> Namron
> ... trying to set aside that 45# recurve for the 32# longbow ...
>
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