The Federal excise tax (FET) on firearms and ammunition was first introduced in the Wildlife Restoration Act in 1937, while archery equipment was added to the legislation in 1972. FET dollars on archery equipment applies to bows, arrows, and any equipment that attaches to a bow, such as arrow rests, bow sights, strings, etc. That money cycles directly back into state fish and wildlife agency conservation efforts in the form of wildlife restoration, community archery ranges and more.
Manufacturers pay the FET when they first sell their manufactured archery and bowhunting products in the U.S. Taxes are paid quarterly, following a sale to a wholesaler, distributor, or directly to a consumer or retail shop.
Retailers DO NOT need to pay FET on taxable products they have purchased from other manufacturers since it is the manufacturer’s responsibility to remit payment, not the retailer’s. However, a retail shop is required to pay FET if they manufacture a taxable product within their store or if they are importing products from outside of the U.S. and are the first point of sale on the product in the U.S. For example: if you’re a retail shop and you make your own bowstrings, you would need to pay FET on those custom strings. If you buy your products from an overseas manufacturer and those products aren’t being sold until they hit your shop’s shelves, then you are effectively serving as an “importer” and would need to pay FET on those products.
As a retailer that is not required to pay the FET dollars, you’re still contributing to the federal excise tax cycle by selling the products. Even if you don’t pay the tax yourself, the U.S. manufacturer you bought them from is. So, every taxable product you sell in your shop contributes to conservation.
The ATA has created a free, comprehensive guide to federal excise taxes for its members. The document summarizes IRS rules and regulations and shows you how to calculate the FET. Members can download the ATA’s Federal Excise Tax Guidelines document to check whether you’re obligated to pay. Members can also download our Archery Federal Excise Tax Collections document that breaks down the amount of taxes collected on archery and bowhunting products from 2010 to the present, updated quarterly.
Whether you’re a manufacturer or a retailer, we encourage your customers to buy from you rather than through non-U.S. online retailers. Currently, some direct-to-consumer purchases coming from outside of the U.S. are slipping through an FET tax loophole referred to as “FET Slippage.” These purchases are most often facilitated by an online marketplace rather than an importer, so the FET responsibility is transferred to the purchaser and is not being collected. However, your ATA is working hard in Congress to eliminate this unfortunate and unfair practice. The next time a customer tells you that they found the same item for a lower price online, please encourage them to research the product manufacturer to guard against purchases made from foreign manufacturers whose products may not be contributing to conservation. Encourage them to buy directly from your shop, which will help fund hunter education programs, ranges, and many other important conservation efforts across the U.S.
Education is one of the best tools at our disposal. Become informed about the tax, pay it if you discover that you should, and let your customers know that their hard-earned money is going toward promoting archery and bowhunting opportunities for all.
WE ARE HERE TO HELP THE INDUSTRY, TO HELP INDIVIDUAL BUSINESSES GET THE MOST OUT OF THE INDUSTRY, AND TO HELP YOU.
