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-.htmlhttps://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.