There are a several people here who sell muzzleloaders after they build them from scratch or from kits. Are there any laws you know of pertaing to doing that as a second income?
:hmm:
:hmm:
Building and selling muzzleloaders
- Thread starter Liver eatin’ Johnson
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I know that if you are a "gun builder", you will have to pay the Federal Excise Tax in addition to any Income Tax you have to declare.
I suppose your friendly State Tax people will be interested too, not only in the State Income Tax and the Sales Tax, but in you obtaining a Business License (read "tax"). Your local town may also want a piece of the pie and charge a City Sales Tax.
I'm not sure, but I have heard that some builders require that the Customer buy the Hardware and deliver it to them. This way, they are just "restocking" the parts in an effort to avoid the Excise Tax.
I don't want to get Political, but when you stop and think about it, stuff is taxed so much it's almost worn out before you get it home. :curse:
I suppose your friendly State Tax people will be interested too, not only in the State Income Tax and the Sales Tax, but in you obtaining a Business License (read "tax"). Your local town may also want a piece of the pie and charge a City Sales Tax.
I'm not sure, but I have heard that some builders require that the Customer buy the Hardware and deliver it to them. This way, they are just "restocking" the parts in an effort to avoid the Excise Tax.
I don't want to get Political, but when you stop and think about it, stuff is taxed so much it's almost worn out before you get it home. :curse:
Guest
Gun building can be a thankless job. I did it for a while, Mauser action based hunting rifles. Customers may have good things to say about you, but seldom to you.
I remember the time I had one old boy who couldn't tell the diference between roll / pin "engraving" and hand engraving and the reason for the price difference. Usually, I'm my own worst critic, but he was the last straw. Many are the ones looking for custom guns at wally world prices. Oh, and don't forget the "pard", with the potential buyer, that says, "Oh, I can do that for you!"
Kits are a collection of parts, that may or may not become a good gun. A kit gun that shines is the sum that exceeds the whole of its parts.
Just :m2c: :results:
I remember the time I had one old boy who couldn't tell the diference between roll / pin "engraving" and hand engraving and the reason for the price difference. Usually, I'm my own worst critic, but he was the last straw. Many are the ones looking for custom guns at wally world prices. Oh, and don't forget the "pard", with the potential buyer, that says, "Oh, I can do that for you!"
Kits are a collection of parts, that may or may not become a good gun. A kit gun that shines is the sum that exceeds the whole of its parts.
Just :m2c: :results:
Guest
Its also a way to avoid the, "that's not what I wanted" argument used to bring down the price of the finished gun. Been there, seen that.
Just :m2c:
Dont tell!
And if they ask.....Dont tell!
The only people that need to know your personal business are the ones you would share your garden with(.)
If you let the "taxman" start sharing your labor, you can bet your sweet woodrasp they'll be making more than you will,( just like your other real job) :imo:
Think traditional, unless you want to be a complet law abiding citizen,,,,,,where theres no such thing as privacy!
And that just aint right. :m2c:
Didn't mean to offend, just stating the facts!
Been there done that, Ronnie
I don't know the legalities of gun building, but I can tell you about cars. Sell more than 5 per year, and you have to have a wholesaler or retailer license. That is true only if you are caught though. I know several folks that sell MANY, MANY, MANY more than that each year...
My take is that if you build them for enjoyment and then sell them, it is a hobby. Once you take orders, then it changes.
My take is that if you build them for enjoyment and then sell them, it is a hobby. Once you take orders, then it changes.
Occassionaly I'll make a gun, shoot it some, have some fun with it then eventually sell it.
I don't advertize, look for buyers or persue this as a means of self preservation.
Could I be taxed? Don't know, don't care.
If I hold a garage sale and sell some junk, could I get taxed?
The whole business concerning tax is a very taxing and exhaustive discussion!
I don't advertize, look for buyers or persue this as a means of self preservation.
Could I be taxed? Don't know, don't care.
If I hold a garage sale and sell some junk, could I get taxed?
The whole business concerning tax is a very taxing and exhaustive discussion!
Guest
I am neither an accountant or tax attorney but I believe the IRS and state people are more interested in people who are running a business and taking write-offs for depreciation and sales taxes OR the person who is pulling down a bunch of cash sales. I once worked with a fellow who had a thriving antique gun business on the side and dealt only in cash. No one was the wiser until he got a divorce and his bitter ex-wife ratted him out to the IRS. He had accumulated about $250,000 over the years so they wanted their pound of flesh with interest. It had a bad outcome... :cry:
IMHO, I do not think anyone will be at much risk in building one or two rifles a year, maybe shooting them a few times, then selling to buy more materials to build another. I sell iron hardware and have a general disclaimer advising that all items can be dangerous, keep out of the reach of children, etc., etc., etc. If I built very many guns, I would create a hold-harmless form and make every buyer sign it so you have some recourse if they double load or short start a ball and hurt themselves. It might help if the lawyers come calling - especially if you do it as a normal course of business.
IMHO, I do not think anyone will be at much risk in building one or two rifles a year, maybe shooting them a few times, then selling to buy more materials to build another. I sell iron hardware and have a general disclaimer advising that all items can be dangerous, keep out of the reach of children, etc., etc., etc. If I built very many guns, I would create a hold-harmless form and make every buyer sign it so you have some recourse if they double load or short start a ball and hurt themselves. It might help if the lawyers come calling - especially if you do it as a normal course of business.
Guest
Or you can think about it the other way, if you go into business there are many, many things you will need, these things cost lots of money, much more then you will be making, this means it will cost you money to be in business the first few years and that might get you a bigger refund from your regular income tax, Right it all off, check with your accountant.
TheGunCellar
TheGunCellar
CrackStock
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Blahman,
Pittman Robertson is a sportsman tax which applies to all finished sporting goods and guns.
It was instituted at the request of sportsman and is actually a great benefit to shooting sports, nature preserves and wildlife programs. We used a lot of that money in YHEC activities and adult hunting safety programs. However, it is a steep tax. When you sell a finished item, you are supposed to pay it.
It bit a couple of builders years ago and at times still gets some of the guys. This is why many gun builders offer kits without a major component. An incomplete set is not a finished item and the tax is not due at that point.
Are the government guys out looking to get a guy who put his personal shooter together and later sold it informally? Maybe not. Could they? Likely, if you made it easy and waved it in their faces or otherwise annoyed them enough.
I build a few guns for my pleasure and they have remained in my family. If I get into the gun building business for money, I will surely pay the taxes because I have seen first hand how ugly these things can get with penalties and interest when not paid up front.
I don't figure such things in terms of the odds involved, but rather whether I can live with being wrong. I also do not like to be concerned about such things. I prefer to just take the little hit and move on.
CS
Pittman Robertson is a sportsman tax which applies to all finished sporting goods and guns.
It was instituted at the request of sportsman and is actually a great benefit to shooting sports, nature preserves and wildlife programs. We used a lot of that money in YHEC activities and adult hunting safety programs. However, it is a steep tax. When you sell a finished item, you are supposed to pay it.
It bit a couple of builders years ago and at times still gets some of the guys. This is why many gun builders offer kits without a major component. An incomplete set is not a finished item and the tax is not due at that point.
Are the government guys out looking to get a guy who put his personal shooter together and later sold it informally? Maybe not. Could they? Likely, if you made it easy and waved it in their faces or otherwise annoyed them enough.
I build a few guns for my pleasure and they have remained in my family. If I get into the gun building business for money, I will surely pay the taxes because I have seen first hand how ugly these things can get with penalties and interest when not paid up front.
I don't figure such things in terms of the odds involved, but rather whether I can live with being wrong. I also do not like to be concerned about such things. I prefer to just take the little hit and move on.
CS
Just a idea if you were to build a rifle for yourself and shot it a few times to get the POI down on target and decided later you didnt like it or you had a family hardship you needed to get rid of this sligtly used rifle for $
After reading this thread it is a wonder anything gets done or made.
Insurance taxes more taxes liability overhead union dues
Write offs YIKES!
Pssssst...... Lots of people still do what they want to in America, please don't tell the redcoats...... errr taxman.
Insurance taxes more taxes liability overhead union dues
Write offs YIKES!
Pssssst...... Lots of people still do what they want to in America, please don't tell the redcoats...... errr taxman.
Guest
Hey, I just read this in an NRA-ILA e-mail bulletin:
Looks like maybe some good news for you small builders out there! :redthumb:
Looks like maybe some good news for you small builders out there! :redthumb:
BUT!!Any net income from any business is still taxable via Schedule C as ordinary gain.If you call your activity a business you can only show a loss for a short term {it was at one time 3 years}after which it was a hobby and then you can only show expenses equal to your gross income thus eliminating the claiming of a loss, and if your income exceeds your legitimate expenses then it is taxable as ordinary[url] income.Net[/url] income from other sources,ie: gambling, buying and selling property such as dealing in guns new or used,performing services for hire such as gunsmithing,blacksmithing etc is also taxable as ordinary income.Thus in the case of a Kentucky rifle bought in 1950 for $100.00 and sold in 2000 for $5,000, the net gain would be $4,900.00 unless you could show some expenses such as advertising,long distance calls,shipping costs etc. Why do you think so many gun deals are cash only? There are some provisions in the tax code concerning capital gains but I am not familiar with any changes.That is why God made CPA's and tax lawyers.
Now for those of you who,like me, reenact various periods, reenacting is a HOBBY and as stated above your expenses including gas are deductible ONLY to the extent you can show some income which is pretty rare in our hobby.Participation in events is NOT a charitable contribution which can only occur when you DONATE money or property to an entity which is eligible such as governmental divisions
,churches and such. The mere fact that an entity is a not for profit corporation is NOT sufficient unless the entity has 501{c}{3}status.
As far as liability incurred as a gun builder or gunsmith,that is a whole world unto itself and I would suggest a chat with your attorney and insurance agent.One might in a worst case scenario consider transfer of property or some other action to make himself judgement proof.We had this discussion a few months back on the longrifle forum and it can get downright scary.
Tom Patton :imo:
Now for those of you who,like me, reenact various periods, reenacting is a HOBBY and as stated above your expenses including gas are deductible ONLY to the extent you can show some income which is pretty rare in our hobby.Participation in events is NOT a charitable contribution which can only occur when you DONATE money or property to an entity which is eligible such as governmental divisions
,churches and such. The mere fact that an entity is a not for profit corporation is NOT sufficient unless the entity has 501{c}{3}status.
As far as liability incurred as a gun builder or gunsmith,that is a whole world unto itself and I would suggest a chat with your attorney and insurance agent.One might in a worst case scenario consider transfer of property or some other action to make himself judgement proof.We had this discussion a few months back on the longrifle forum and it can get downright scary.
Tom Patton :imo:
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Man if they don't get you one way, they'll get you another!
Thomas :imo:
Thomas :imo:
CrackStock
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I am happy to see any lessening of taxes in our area, but I see no mention of the Pittman Robertson Tax here. Was that the tax being discussed?
CS
CS
Guest
The only thing I saw about it was what was posted. I just checked the NRA-ILA web site, and what I posted is what they also have posted on their site in its entirety.
Stophel
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The bill was s. 396 (397 refers to restricting lawsuits against gun manufacturers). Apparently, this was just passed and signed on Friday. Also, apparently, it was passed in unmodified form. There is not much on the internet about it yet. It seems to have been "snuck in", and it affects so few people, relatively speaking, that no one seems to have taken notice of it. The bill, in it's proposed form is quite simple and can be seen at www.theorator.com/bills108/s396.html
I presume this also applies to things such as archery equipment, which was previously taxed the same way.
I presume this also applies to things such as archery equipment, which was previously taxed the same way.
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