Everything You Need to Know About the Archery Excise Tax
The Archery Excise Tax is an important tax levied on specific archery products. This tax is vital for the funding of conservation programs that support wildlife and habitat restoration efforts. Businesses that manufacture or import archery products need to comply with this tax and its associated regulations. Below, we’ll break down the details of the Archery Excise Tax, who pays it, the tax rates, and how it’s paid.
What is Archery Excise Tax?
The Archery Excise Tax is a federal tax imposed on certain archery-related products like bows, arrow shafts, and related accessories. This tax applies to manufacturers, producers, and importers involved in the creation or sale of these products. It is primarily designed to fund conservation programs dedicated to wildlife restoration and the sustainability of natural resources, just like similar taxes for hunting and fishing.
While the excise tax rates vary depending on the type of product, the goal is the same: to support outdoor recreation and promote conservation efforts.
Purpose of the Archery Excise Tax
The purpose of the Archery Excise Tax is to generate funds for wildlife conservation programs. A portion of the revenue generated from this tax goes toward initiatives that protect wildlife habitats, ensure sustainable outdoor activities, and support the growth of conservation-related programs.
By levying this tax on archery products, the government ensures that those benefiting from the sale and use of these goods contribute to maintaining the natural environments in which outdoor activities, including archery, take place.
Who Pays Archery Excise Tax?
The Archery Excise Tax is paid by manufacturers, producers, or importers of taxable archery products. These businesses are responsible for reporting and remitting the tax on items such as bows, arrow shafts, and related accessories.
It is important to note that this tax is not paid by the end consumer directly. Instead, the tax is built into the price of the products sold by the manufacturer or importer. These businesses need to ensure that they follow proper filing procedures, including using IRS Form 720, to remit the tax to the IRS on a quarterly basis.
Tax Rates for Archery Excise Tax
The tax rates for archery-related products are categorized by specific IRS numbers. Below are the two main categories subject to the tax:
IRS Number 44 – Bows, Quivers, Broadheads, and Points
The tax on bows is 11% of the sales price. This applies to bows with a peak draw weight of 30 pounds or more. Additionally, any part or accessory suitable for inclusion in or attachment to a taxable bow, as well as any quiver, broadhead, or point suitable for use with arrows, is also subject to this tax. The tax is paid by the manufacturer, producer, or importer of these products.IRS Number 106 – Arrow Shafts
The tax on arrow shafts applies to manufacturers, producers, or importers of any arrow shaft. The tax applies if the arrow shaft meets one of the following criteria:It measures 18 inches or more in overall length.
It measures less than 18 inches but is suitable for use with a taxable bow.
The tax rate for arrow shafts increases annually based on inflation adjustments. Refer to the latest tax rate in Form 720.
https://www.irs.gov/pub/irs-pdf/f720.pdf
Archery Items Subject to Tax
The IRS lists various items in the archery industry that are subject to excise tax. The items covered by this tax include:
Bows: Any bow with a peak draw weight of 30 pounds or more is subject to the excise tax. The tax also applies to various bow accessories such as stabilizers, sights, and string silencers that can be attached to the bow.
Arrow Shafts: This includes any shaft used to manufacture arrows that either measures 18 inches or more in length or is suitable for use with a taxable bow. This tax applies regardless of whether the arrow shaft is sold separately or as part of a finished product.
Quivers: A quiver that is designed to hold arrows is subject to tax, as long as it is suitable for use with taxable bows.
Broadheads and Points: Any broadhead or point that is designed for use with arrows and can be used with taxable bows is also subject to the excise tax. This includes broadheads intended for hunting or target use.
Parts and Accessories: Other parts or accessories that can be used with taxable bows, such as bow limbs, risers, and other components, are subject to the excise tax.
Exemptions for Archery Items
While many archery products are subject to the excise tax, some items are exempt. The primary exemptions relate to specific types of wooden arrow shafts and other specialized archery goods.
Wooden Arrows: Arrow shafts made entirely of natural wood, measuring 5/16 inch or less in diameter, and unsuitable for use with taxable bows, are exempt.
Certain Accessories: Items like bow strings, stabilizers, and sights are generally taxable, but specific configurations or uses may qualify for exemptions.
Imported Goods: Individuals importing archery equipment for personal use may be exempt from the excise tax, depending on the circumstances.
For a comprehensive and detailed list of archery items that are subject to excise tax, as well as those that are exempt, please refer to the official IRS guidelines on Archery Items Subject to Tax and Exemptions for Archery Items
How is Archery Excise Tax Paid?
The Archery Excise Tax is paid through Form 720. This form is used to report and remit excise taxes on various goods, including archery products. The tax is generally filed on a quarterly basis, with the due dates for these filings being the last day of the month following the end of each quarter (e.g., April 30 for Q1, July 31 for Q2, October 31 for Q3, and January 31 for Q4).
There are two methods available for paying the Archery Excise Tax:
Manual Method: This is the traditional paper-and-pen method. In this method, businesses must fill out and submit Form 720 on paper and mail it to the IRS. This method is more time-consuming and is typically used by businesses that prefer handling tax reporting manually.
Online Method: The more efficient and preferred method is to file electronically using an IRS-authorized online portal, such as Simple720. This allows businesses to easily submit Form 720 online and pay the archery excise tax.
The online method is faster, reduces the chance of errors, and provides immediate confirmation of submission. The IRS requires businesses to file Form 720 online.
Conclusion
In conclusion, the Archery Excise Tax is an essential part of the archery industry, supporting wildlife conservation efforts and ensuring that businesses in the industry contribute to these vital programs.
Manufacturers, producers, and importers of taxable archery products are responsible for paying the tax, which is calculated based on the product type. Compliance with the IRS regulations and timely payments through Form 720 are crucial to avoid penalties and ensure smooth business operations.
File your Archery Excise Tax Online with Simple720 now!