Author Topic: Selling Soft Plastics  (Read 1495 times)

Offline Levithefisherman

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Selling Soft Plastics
« on: 12/21/17 19:15 UTC »
Hi i have been making soft plastics for quite some time now using a majority of Do-It Molds and all my fishing buddies and some family have been asking if i sell them. I was wondering if it is legal to sell lures made from Do-It Molds? i have looked into getting some of my own designs ive made out of VAC-50 and getting them machined but hadnt gotten around to it.

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Offline interceptorbaitco

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Re: Selling Soft Plastics
« Reply #1 on: 12/21/17 20:24 UTC »
Yes it's legal to sell baits from Do-It molds. However, it is illegal to sell baits without a federal ein & paying the required excise tax. Not trying to scare you off, just making sure you take the right steps before making a costly mistake.

Offline Lamar

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Re: Selling Soft Plastics
« Reply #2 on: 12/22/17 06:38 UTC »
  If you're just making some baits for family and a few buddies just do it for cash. You're not making enough money to declare it. It's just a hobby. You're just looking to cover the cost of your hobby. No different then having a yard sale. No one declares that it's only a few hundred bucks. Now you go out and mass produce and sell them in stores then yes you need to do all the tax stuff. And Do-it doesn't care what you do with the baits you make from their molds you just can't copy their molds.
I like the person I have become. I am not going to live forever, but while I am still here, I will not waste time lamenting what could have been, or worrying about what will be.

Offline interceptorbaitco

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Re: Selling Soft Plastics
« Reply #3 on: 12/22/17 12:23 UTC »
The federal excise tax on baits is totally different than income tax. The tax code states that any baits produced & sold are subject to a 10% excise tax to be paid by the manufacture. Now you can probably fly under the radar by just selling a few baits to friends to help cover some cost, but if you start a Facebook page or web site selling baits then they will know. The bad thing is that they will let you go for a little while before they hit you with a fine & penalties.

Offline Kasilofchrisn

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Re: Selling Soft Plastics
« Reply #4 on: 12/22/17 15:37 UTC »
If it ever comes to selling to anyone you don't know then you should get an EIN and pay up quarterly.
I recall a few years back some school age kids were selling soft plastics as a summer gig.
They got turned in for selling $1500 or $2500 in baits and had to pay uncle sam.
I'm guessing a competitor wasn't happy loosing business to some kids who were not paying the tax.
Just a warning cause the IRS can make your life dificult real easily.

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Offline 2XL

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Re: Selling Soft Plastics
« Reply #5 on: 12/23/17 07:15 UTC »
For those of you who are set up to sell a lot of baits. How do you go about setting yourself up with an EIN number/go about paying income tax etc ? Do you have to start a business or ? 

Offline superharmonix

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Re: Selling Soft Plastics
« Reply #6 on: 12/23/17 08:11 UTC »
I started out making baits for myself and buddies, then selling a few here and there, and it is now my full time labor of love.  The last thing I would want to worry about is having some surprise bill. 

This topic comes up all the time, and its always interesting to see all the different responses.  If you are going to sell baits, whether it be to a few buddies here and there, or you are planning on mass marketing them, or anywhere in between, my encouragement to you is to do things the right way.  Pay the quarterly excise, and file annual tax returns for your business.  I hate paying extra tax as much as the next, but I also believe if we do the right thing, it will all settle out properly- but that's a different topic.  Stay on the straight and narrow!

Here are a couple links that may help you:
http://tax.findlaw.com/federal-taxes/is-a-tax-id-required-for-my-business-.html
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

...and make sure you double check with your state or county (or parish as we have here in Louisiana) to make sure there aren't any other things you need to be doing.

Your bigger issue is not that Uncle Sam is sitting in a dark room spying on you, waiting to bust you- although that can happen....but your bigger issue is someone that gets upset with you for whatever reason, or simply doesn't like you, or is jealous, etc.

...and I know it's off topic, but please don't look around at what everyone else charges and price your stuff cheap in order to sell more.  Over time, you will price yourself out of the business.  Also, it's bad for everyone else as it drives prices down.  You are paying premium prices for plastisol, molds, glitters, pearls, additives, tools, electricity, TIME, and so on and can make baits that people can not readily by from Amazon.com or BassPro.  Charge fair prices for what you do.  Don't rip yourself off (and others in the process).  If people want "cheap" baits, kindly tell them where they can go find them. :)  I have a lot more to say but I will shut up now.  :D :D

Offline interceptorbaitco

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Re: Selling Soft Plastics
« Reply #7 on: 12/23/17 11:02 UTC »
 https://www.irs.gov/publications/p510/ch05.html This link gives the information on the excise tax.