Quote Originally Posted by ESOX2009 View Post
I agree, the price of crank baits is ridiculous. I'm not sure when this tax kicked in, but manufacturers now have to pay 10% off the top to the IRS.

from http://www.irs.gov/publications/p510/ch05.html:
A tax of 10% of the sale price is imposed on many articles of sport fishing equipment sold by the manufacturer. This includes any parts or accessories sold on or in connection with the sale of those articles.
Pay this tax with Form 720. No tax deposits are required.

This seems like a high rate of tax to me. I kicked around the idea of making baits and selling them online, but paying 10% right off the top is excessive. Of course, the Govt. taxes them again when they are purchased.
That tax is part of Wallop-Breaux funds. The money is distributed to the fish an game departments of each state based on how many license sales they have each year.