Mike Schoonveld: Senate bill introduced to collect taxes on foreign-made hunting, fishing gear

Several months ago I wrote a column with the title, “Who Funds Fisheries Programs.” It highlighted a report issued by the U.S. Government Accountability Office (GAO) about the difficulty of collecting excise taxes on foreign-made fishing tackle.   

Most anglers understand that each year the money spent on purchasing fishing licenses is what funds state fisheries agencies.

I hope they do, anyway, but not so many understand that in many cases, their license dollars are actually used as “matching” funds to qualify for federal dollars from the Sportfishing Restoration Program.

That federal program is funded by an excise tax manufacturers’ of fishing gear (tackle, trolling motors and other products) pay the IRS.

The IRS passes the funds to the U.S. Fish and Wildlife Service and they dole out the funds to the state fisheries agencies.

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The GAO reported it was becoming progressively difficult to collect those taxes since the manufacturing of products for the fishing industry (like many of America’s other industries) has increasingly and largely become off-shored.

Rods, reels, lures, fishing hooks, lines and sinkers along with much of the other gear which used to be made in the USA, now comes from foreign nations.

Some of the difficulty stems from bureaucratic confusion, some of it is blatant non-compliance. Whether accidental or on purpose, the nation’s fisheries agencies (and the anglers who benefit from their work) are missing out on millions of dollars that could be, and should be collected.

The GAO, however, isn’t an agency that can enact regulations or pass legislation. Basically, they are accountants tasked with checking the money flow into and out of the U.S. Treasury and forward their findings to the U.S. Congress and executive branch agencies. They produce reports such as the one I mentioned earlier and it’s up to Congress or the president to read the reports and act (or not) on them.

Evidently, some senators did read the report and took it seriously. A bill has been introduced in the Senate called the Sporting Goods Excise Tax Modernization Act (S1649).

Take note, this bill doesn’t just address the lack of compliance by companies and corporations who are supposed to pay on the fisheries side of outdoor recreation. It also addresses GAO reported shortfalls of excise taxes due on guns, ammo and hunting equipment.

The sportfishing restoration laws were modeled on a similar law passed decades earlier called the Wildlife Restoration Act that taxes sporting arms, ammo, and other hunting equipment. The USFWS apportions millions of dollars annually to state wildlife agencies to supplement the licensing dollars they receive from hunters in their states.

I know from looking at much of the hunting paraphernalia available to Michigan’s hunters finding a “Made in the USA” tag attached to the products has become increasingly rare over the past several decades.

The same report from the GAO that warned of non-compliance for one reason or another when it came to collecting excise taxes due on fishing gear, also showed similar non-compliance by some foreign sourced hunting gear. This proposed legislation also includes measures to ensure the money due to wildlife agencies is collected with less non-compliance.

I look at this as a wise step. Sportsmen as well as legitimate makers of hunting and fishing gear have always been proud to be compliant with this innovative method of funding and supporting state wildlife and fisheries agencies. I’d like to think of this proposed legislation as an interim step.

As mentioned earlier, manufacturers are far from the only industries in the USA susceptible to the economic and regulatory conditions that either forced them to move their manufacturing to foreign countries or worse.

In many instances smaller businesses were just put out of business by governmental policies that made increasing demands on in-country operations while allowing foreign competition to undercut profit margins of American made goods.

Here’s hoping that tariff negotiations and fewer regulatory restrictions on domestic production will allow “Made in the USA” stickers on outdoor products to become less of a rarity in the future.

I ended the previous column I wrote with the message that anglers can help solve this problem by purchasing equipment that is made in the USA. Now there’s another way to help. Contact your senators and ask them to support the Sporting Goods Excise Tax Modernization Act (S1649).