Archery and bowhunting manufacturers pay federal excise taxes (FET) that help secure the future of wildlife and wild places for sportsmen, sportswomen and all wildlife recreationists to enjoy. Understanding the FET collection and distribution process allows ATA members to embrace and celebrate their financial contributions, which generate sustainable conservation efforts nationwide.
A Well-Designed System
Few state wildlife agencies receive funding from general taxpayers. Agencies rely primarily on two funding sources: hunting and fishing license fees, as well as federal excise taxes paid on firearms, ammunition, fishing tackle and archery gear.
License sales are straightforward. The money that hunters, anglers and trappers use to buy a license goes to the state agency selling them. The FET process is more complicated. As described in ATA’s article “The Reason and History for the Pittman-Robertson Fund” on ArcheryTrade.org, the FET is a 10% to 11% tax manufacturers pay on the first sale of firearms, ammunition and some archery equipment. The tax originated in the 1937 Wildlife Restoration Act, more commonly called the Pittman-Robertson Act. Congress added archery equipment to the FET in 1972.
All firearms- and ammunition- and most archery-industry members who manufacture, produce or import taxable equipment must pay the FET. The IRS website (irs.gov) outlines who is liable for the FET and has a comprehensive list of which archery items are subject to the FET and which archery items are not. The site also explains how the IRS defines terms, such as manufacturer and importer, to determine the proper taxpayer.
FET revenues fund conservation projects such as habitat restoration, wildlife research and public-access programs. This process ensures our nation’s fish and wildlife remain healthy, abundant and available to hunters and anglers.
Bryan Burhans, executive director of the Pennsylvania Game Commission, said, “The P-R Act is foundational to how we’re able to carry out the various programs that an agency works on. There are so many different areas where those funds are used to benefit hunters and shooters.”
The Flow of Funds
All companies responsible for paying FET must file a quarterly excise tax return using IRS Form 720. The IRS collects all revenues generated by the FET and sends them to the U.S. Fish and Wildlife Service, which apportions the allotments only to state wildlife agencies and territories based on their geographic size and their paid hunting and fishing license holders. The fishing industry pays a similar FET through the Dingell-Johnson Act.
For states to receive these federal grant funds, they must include a 25% match of nonfederal funding in their proposals. Most states use money generated by license sales to pay the match. In other cases, state agencies partner with colleges, conservation organizations and other groups to raise additional conservation dollars to match the federal funding. These collaborations are mutually beneficial because once the state receives the federal fund approval, both parties work on the project. Volunteer hours (for hunter education programs) can also be converted and used as a match. Only projects meeting the intended purposes of the Pittman-Robertson Act are approved by the U.S. Fish and Wildlife Service and eligible for funding.
The state agency receives the funds after the work on an approved grant is completed. If a state doesn’t complete a project or allocate the funds after a certain period, the funding reverts to the USFWS for the Migratory Bird Conservation Commission, which uses it to buy land for the National Wildlife Refuge program.
Supporting the Mission
Paying an 11% tax might seem like a lot, but it’s a small price to pay to ensure our natural resources are properly managed so people have ample hunting opportunities and businesses can grow and flourish with vibrant consumer participation.
Keith Arnold, national sales manager for the TenPoint and Wicked Ridge Crossbow brands, knows his company is legally obligated to pay federal excise taxes. He also understands the magnitude of his company’s contributions and the investment value of paying taxes, so the brands proudly pay their share.
“Our hunting lifestyle has greater challenges today than ever before,” Arnold said. “With each day that passes, more land is developed and our youth’s attention finds new distractions. The FET program ensures that significant resources are focused on doing what most of us don’t have the time or bandwidth to do — work on protecting and furthering our passion so that future generations can do what we love.”
