The Fishing Excise Tax: A Critical Tool for Conservation and Recreation

DISCLAIMER: I AM NOT A LEGAL PROFESSIONAL.  THIS OPINION PIECE IS IN NO WAY LEGAL ADVICE NOR SHOULD BE TAKEN IN THAT CONTEXT.  SEEK YOUR CPA OR TAX ATTORNEY FOR CLARIFICATION AND ADVICE.

The Fishing Excise Tax, often overlooked by anglers and those outside the fishing industry, is one of the most important sources of funding for conservation efforts, fish habitat restoration, and recreational fishing programs in the United States. Established under the Federal Aid in Sport Fish Restoration Act (also known as the Dingell-Johnson Act), the tax plays a pivotal role in sustaining fish populations, improving public access to waterways, and promoting responsible fishing practices. While the tax has numerous benefits, it is not without its challenges and criticisms. This story will explore the pros and cons of the Fishing Excise Tax, highlight examples of its benefits, discuss instances of mismanagement, explain how it affects small businesses, outline the penalties for failing to pay the tax, and ultimately conclude with why it remains a vital component of U.S. conservation policy.

History and Purpose of the Fishing Excise Tax

The Dingell-Johnson Act was passed in 1950 to address the need for greater funding for sport fish restoration and recreational fishing programs. Modeled after the successful Pittman-Robertson Act, which funded wildlife restoration through an excise tax on firearms and ammunition, the Dingell-Johnson Act introduced a similar tax structure for fishing equipment and motorboat fuels. The tax is levied on manufacturers, producers, and importers of fishing gear and supplies, including rods, reels, lines, lures, and even electric trolling motors. The revenue generated is collected by the federal government and funneled into the Sport Fish Restoration and Boating Trust Fund, which distributes the money to state fish and wildlife agencies to support various projects and initiatives.

Pros of the Fishing Excise Tax:

1. Supports Conservation Efforts:

   The primary benefit of the Fishing Excise Tax is that it generates funding for critical conservation and habitat restoration projects. The funds are used to restore fish habitats, improve water quality, and combat invasive species that threaten native fish populations. Without these funds, many state fish and wildlife agencies would struggle to maintain healthy fisheries and aquatic ecosystems.

   
   

   Example: In Florida, the excise tax has helped restore important seagrass habitats, which serve as nurseries for fish species like redfish and snook. These efforts have not only improved fish populations but have also benefited recreational anglers by creating healthier and more productive fishing areas.

   
   

2. Improves Public Access to Fishing:

   A significant portion of the excise tax revenue is used to build and maintain public access to fishing and boating areas. This includes the construction of boat ramps, fishing piers, docks, and marinas. By providing better access to waterways, the tax helps ensure that more people can enjoy recreational fishing.

   
   

3. Funds Fish Stocking Programs:

   The excise tax also supports fish stocking programs that replenish lakes, rivers, and reservoirs with sport fish species such as trout, bass, and walleye. These programs help maintain healthy fish populations, ensuring that anglers have a consistent supply of fish to catch.

   
   

   Example: In Colorado, funds from the excise tax have been used to stock millions of trout in lakes and rivers each year. These stocked fish provide recreational opportunities for anglers while also supporting local economies through tourism and fishing-related businesses.

   
   

4. Encourages Education and Outreach:

   Excise tax funds are also used to support educational programs aimed at teaching anglers about responsible fishing practices, conservation efforts, and aquatic ecosystems. These programs, often geared toward youth, help instill a sense of stewardship for natural resources.

   
   

   Example: The "Hooked on Fishing, Not on Drugs" program, funded by the excise tax, teaches kids about fishing while promoting positive lifestyle choices and respect for the environment.

   
   

5. Economic Boost for Recreational Fishing:

   The revenue generated by the excise tax helps sustain the recreational fishing industry, which contributes billions of dollars to the U.S. economy annually. By funding projects that improve fishing opportunities, the tax indirectly supports businesses such as tackle shops, boat manufacturers, and tourism services that rely on healthy fisheries and public access to waterways.

   
   

Cons of the Fishing Excise Tax

1. Increased Costs for Consumers:

   One of the downsides of the excise tax is that the cost is often passed down to consumers in the form of higher prices for fishing gear. While the tax is levied on manufacturers and importers, it ultimately affects the price of products like rods, reels, and lures, making fishing more expensive for the average angler.

   
   

2. Burdens on Small Businesses:

   Small businesses in the fishing industry, particularly manufacturers and retailers, may find it challenging to comply with the excise tax regulations. Keeping track of taxable items, filing reports, and making payments to the IRS can be time-consuming and costly for smaller operations.

   
   

3. Limited Flexibility in Funding:

   Some critics argue that the funds from the excise tax are too rigidly allocated, leaving little room for state agencies to address unique or emerging issues. While the formula for distributing funds ensures that states with larger fishing populations receive more money, it may not always account for specific regional needs or conservation priorities.

   
   

4. Potential for Mismanagement of Funds:

   There have been instances where excise tax funds were not used as intended or were poorly managed by state agencies. Mismanagement can lead to wasted resources and failed conservation projects, undermining the goals of the Dingell-Johnson Act.

   
   

5. IT IS ANOTHER TAX: 

   I am with you that we are taxed on everything and anything.  It’s absolutely aggravating to see that we have to pay another tax on our recreation activities, even when it does some good.

   
   

Examples of Benefits from the Excise Tax

1. Habitat Restoration in Chesapeake Bay:

Funds from the excise tax have been used to support large-scale habitat restoration efforts in the Chesapeake Bay. Projects funded by the tax have focused on restoring wetlands and submerged aquatic vegetation, which are critical habitats for species like striped bass and blue crabs. These efforts have helped improve water quality, increase fish populations, and provide more opportunities for recreational anglers in the region.

2. Boat Ramp Construction in Florida:

In Florida, the excise tax has been used to build and maintain boat ramps across the state. With thousands of lakes and miles of coastline, Florida is a prime destination for recreational anglers, and the state’s boat ramps provide critical access to these waters. Excise tax funds have helped ensure that ramps are available and well-maintained, contributing to the state’s booming recreational fishing industry.

3. Fish Stocking Programs in Colorado:

In Colorado, funds from the Fishing Excise Tax are used to support fish stocking programs that replenish lakes and rivers with species like rainbow trout. These programs help sustain healthy fish populations and provide more opportunities for anglers, especially in areas where natural reproduction is limited.

4. Texas Gulf Coast Boat Ramps:

In Texas, excise tax funds have been used to build numerous public boat ramps along the Gulf Coast, making it easier for anglers to access prime fishing areas without having to rely on private or commercial docks.

5. Youth Fishing Programs in California:

In California, the tax has been used to fund youth fishing programs that teach kids about fishing, conservation, and aquatic ecosystems. These programs help introduce the next generation to the sport of fishing while emphasizing the importance of protecting the environment.

Known Mishandling of Funds

While the Fishing Excise Tax has generally been used for its intended purposes, there have been instances of fund mismanagement. In some cases, state agencies have been accused of diverting funds from the Sport Fish Restoration and Boating Trust Fund to cover other budgetary shortfalls. This misallocation of funds undermines the trust that anglers and the industry place in the system and raises questions about accountability.

For example, there have been reports of states using funds intended for fish habitat restoration to pay for administrative expenses or unrelated projects (Check out the findings in this audit for example). In some cases, these misallocations were discovered during audits, and states were required to repay the misused funds. However, these incidents highlight the importance of oversight and transparency in the administration of the excise tax.

Penalties for Not Paying the Fishing Excise Tax

The Fishing Excise Tax is a federal tax, and businesses that fail to pay it can face significant penalties. These include:

1. Fines:

Companies that do not comply with the tax requirements can be subject to financial penalties. The fines can be substantial, especially for businesses that have failed to pay the tax over a long period.

2. Interest on Unpaid Taxes: 

In addition to fines, companies may also be required to pay interest on any unpaid taxes. The interest accrues over time, increasing the financial burden on non-compliant businesses.

3. Legal Action: 

In extreme cases, the federal government can take legal action against businesses that refuse to pay the Fishing Excise Tax. This can include lawsuits and even criminal charges in cases of deliberate tax evasion.

How Small Businesses Pay into the Fishing Excise Tax

Small businesses, in particular, need to be vigilant about complying with the tax requirements to avoid these penalties. It’s essential for companies that manufacture or import fishing gear to stay on top of their tax obligations and ensure that they are in compliance with federal regulations.

Small businesses involved in the fishing industry are responsible for paying the Fishing Excise Tax on the products they manufacture or import. The tax is collected by the IRS and applies to a wide range of fishing equipment, including rods, reels, lines, and lures. Businesses must calculate the tax owed based on the value of the equipment they produce or import and file regular tax returns to report their sales and tax liabilities.

For small businesses, the administrative burden of complying with the excise tax can be significant. They must keep detailed records of their sales, track their tax liabilities, and ensure that they file the necessary paperwork with the IRS on time. Failure to do so can result in penalties, as outlined earlier.

Despite the challenges, it’s important for small businesses to understand their responsibilities and take steps to comply with the tax requirements. Many small businesses benefit from the programs funded by the excise tax, including improved fishing access and healthier fish populations, so it’s in their interest to contribute to the system.

It is well documented and stated how the excise tax can be a bit painful for small business.  When you make/sell a product that sells a couple hundred or thousand pieces, it still gets taxed as the same major corporation that pays for doing the same thing that sells into the millions of pieces.

Conclusion: Why the Fishing Excise Tax Should Be Kept in Place

The Fishing Excise Tax has been instrumental in supporting the conservation of aquatic ecosystems, improving public access to fishing, and enhancing recreational fishing opportunities across the United States. While it does impose some administrative and financial burdens on businesses, the program is designed to help keep us fishing for generations to come.

If you have questions, here is a list of contacts to inquire about the program:

State Fish & Wildlife Agency Contacts

State	Agency Name	Email Address
Alabama	Division of Wildlife and Freshwater Fisheries	rob_hurt@fws.gov
Alaska	Department of Fish and Game	michael_daigneault@fws.gov
Arizona	Game and Fish Department	jennifer_kaplan@fws.gov
Arkansas	Game and Fish Commission	jonathan_baxter@fws.gov
California	Department of Fish and Wildlife	matt_hamman@fws.gov
Colorado	Division of Parks and Wildlife	dominic_barrett@fws.gov
Connecticut	Department of Energy and Environmental Protection	mark_cookson@fws.gov
Delaware	Division of Fish and Wildlife	rich_mason@fws.gov
Florida	Fish and Wildlife Conservation Commission	chad_allison@fws.gov
Georgia	Wildlife Resources Division	jim_bates@fws.gov
Hawaii	Department of Land and Natural Resources	malia_west@fws.gov
Idaho	Department of Fish and Game	jason_pyron@fws.gov
Illinois	Department of Natural Resources	andrew_diallesandro@fws.gov
Indiana	Department of Natural Resources	brent_sodergren@fws.gov
Iowa	Department of Natural Resources	andrew_diallesandro@fws.gov
Kansas	Department of Wildlife, Parks and Tourism	michael_disney@fws.gov
Kentucky	Department of Fish and Wildlife Resources	brent_harrel@fws.gov
Louisiana	Department of Wildlife and Fisheries	seth_bordelon@fws.gov
Maine	Department of Inland Fisheries and Wildlife	hannah_mullally@fws.gov
Maryland	Department of Natural Resources	rich_mason@fws.gov
Massachusetts	Division of Fisheries and Wildlife	ted_kendziora@fws.gov
Michigan	Department of Natural Resources	jim_hazelman@fws.gov
Minnesota	Department of Natural Resources	annmarie_krmpotich@fws.gov
Mississippi	Department of Wildlife, Fisheries, and Parks	jeffrey_lee@fws.gov
Missouri	Department of Conservation	erin_l_holmes@fws.gov
Montana	Fish, Wildlife & Parks	greg_neudecker@fws.gov
Nebraska	Game and Parks Commission	[Contact via website]
Nevada	Department of Wildlife	[Contact via website]
New Hampshire	Fish and Game Department	[Contact via website]
New Jersey	Division of Fish and Wildlife	[Contact via website]
New Mexico	Department of Game and Fish	[Contact via website]
New York	Department of Environmental Conservation	[Contact via website]
North Carolina	Wildlife Resources Commission	[Contact via website]
North Dakota	Game and Fish Department	[Contact via website]
Ohio	Division of Wildlife	[Contact via website]
Oklahoma	Department of Wildlife Conservation	[Contact via website]
Oregon	Department of Fish and Wildlife	[Contact via website]
Pennsylvania	Fish and Boat Commission	[Contact via website]
Rhode Island	Department of Environmental Management	[Contact via website]
South Carolina	Department of Natural Resources	[Contact via website]
South Dakota	Game, Fish and Parks	[Contact via website]
Tennessee	Wildlife Resources Agency	[Contact via website]
Texas	Parks and Wildlife Department	[Contact via website]
Utah	Division of Wildlife Resources	[Contact via website]
Vermont	Fish and Wildlife Department	[Contact via website]
Virginia	Department of Wildlife Resources	vafwis_support@dwr.virginia.gov
Washington	Department of Fish and Wildlife	[Contact via website]
West Virginia	Division of Natural Resources	[Contact via website]
Wisconsin	Department of Natural Resources	[Contact via website]
Wyoming	Game and Fish Department	[Contact via website]

Note: For agencies without a direct email listed, please visit their official websites to find the appropriate contact information.

📬 How to Use This List

For questions, please reach out to your respective state agencies with questions such as:

• How are fishing excise tax funds allocated in our state?

• What specific projects have been funded by these taxes?

• How can the public provide input on the use of these funds?

By engaging directly with these agencies, anglers can gain insight into conservation efforts and ensure transparency in the use of funds.