SERVICE DEFINES A TO Z OF SPORT FISHING EQUIPMENT.

Rev. Rul. 88-52

PURPOSE

This revenue ruling defines certain items of sport fishing equipment that are enumerated in section 4162(a) of the Internal Revenue Code and that are subject to the excise tax under section 4161(a)(1).

LAW

Section 4161(a)(1) of the Code imposes on the sale of any article of sport fishing equipment by the manufacturer, producer, or importer a tax equal to 10 percent of the price for which it is sold.

Section 4161(a)(2)(A) of the Code provides that in the case of an electric outboard motor or sonar device suitable for finding fish, section 4161(a)(1) shall be applied by substituting "3 percent" for "10 percent."

Section 4161(a)(2)(B) of the Code provides that the tax imposed by section 4161(a)(1) on any sonar device suitable for finding fish shall not exceed $30.

Section 4161(a)(3) of the Code provides that in the case of any sale by the manufacturer, producer, or importer of any article of sport fishing equipment, such article shall be treated as including any parts or accessories of such article sold on or in connection therewith or with the sale thereof.

Section 4162(a) of the Code enumerates articles of sport fishing equipment taxable under section 4161(a). Section 4162(b) provides that certain sonar devices shall not be considered sonar devices suitable for finding fish.

DEFINITIONS

In order to assist taxpayers in determining the taxability of fishing equipment, the articles enumerated in section 4162(a) and 4162(b) are defined as follows:

(1) FISHING RODS AND POLES (AND COMPONENT PARTS THEREFOR). A fishing rod or pole is any tube or shaft-like device (regardless of size or length) made of natural, synthetic, or other material that is designed or used to cast, troll, or otherwise present a bait or lure to fish. The term "fishing rods and poles" does not include bamboo poles that are not designed or intended for use in fishing. Any pole intended for attaching a fishing line to or through is considered a fishing rod or pole. Jigsticks and other similar devices used in ice fishing are considered fishing rods or poles.

A "component part" of a fishing rod or pole is a rod handle, guide, reel seat, blank rod, tip-top, ferrule, or any other device that is designed to be attached to a pole or rod for use in fishing. No tax is imposed on the sale of strike indicators (alarm switches that attach to a fishing rod) and carrying cases for fishing rods.

(2) FISHING REELS. A fishing reel is any mechanical device that can be attached to a rod or pole and is used or designed for dispensing and retrieving fishing line. The term includes reels used in fly fishing, reels or spools employed for dispensing and retrieving the line attached to arrows and spears used in fishing, and reels or spools designed for use in ice fishing.

(3) FLY FISHING LINES AND OTHER FISHING LINES NOT OVER 130 POUNDS TEST. These lines include all lines, either monofilament, multifilament, synthetic, metal, organic, or inorganic, that are used or designed for the purpose of attaching lures, hooks, flies, bobbers, sinkers, or any other item of terminal tackle, including lines used to attach items of terminal tackle to one another, such as leaders. Fishing lines over 130 pounds test are not taxable. (Such lines are able to suspend a 130 pound weight without breaking or stretching more than five percent of line length while suspending that weight.)

(4) FISHING SPEARS, SPEAR GUNS, AND SPEAR TIPS. A fishing spear is any tube or shaft-like device that ends in a sharp tip and is designed for the purpose of spearing fish. A spear gun is any device designed for propelling a shaft or tube-like device through the water for the purpose of spearing fish. A spear tip is any device that ends in one or several sharp tips, that may be attached to a shaft or tube-like device, and that is designed for the purpose of spearing fish. Fishing spears, spear guns, and spear tips do not include bows and fish arrows used in the sport of bowfishing.

(5) ITEMS OF TERMINAL TACKLE. Terminal tackle includes, but is not limited to the following items --

(A) LEADERS. A leader is any article used for attaching the end of a fishing line to a hook or lure or any other device of terminal tackle. The term includes, but is not limited to, swivels and snaps.

(B) ARTIFICIAL LURES. Artificial lures are all devices (from whatever materials made) that are designed to be attached to a fishing line, and that simulate an article considered edible to fish or that otherwise are intended to induce a fish to attempt to confront, swallow, bite, or consume the device. An artificial lure usually includes one or more attached hooks. Artificial lures include, but are not limited to, plugs, spoons, jigs, feathers, spinners, soft-plastic lures, and spear fishing decoys.

(C) ARTIFICIAL BAITS. An artificial bait is any bait that simulates an article considered edible to fish and that is designed to be attached to a hook or lure. The term does not include preserved packaged natural baits.

(D) ARTIFICIAL FLIES. An artificial fly consists of a hook to which feathers, beads, lead, or other items are attached to make the article resemble an insect or any other organism considered edible to fish. An artificial fly is usually designed to be attached to a fishing line, leader, swivel, or snap.

(E) FISHING HOOKS. A fishing hook is any curved or bent metallic device that terminates in a sharp point and is designed for the purpose of catching, holding, or pulling fish or fishing bait.

(F) BOBBERS. A bobber is any device used as a means to suspend a fishing line or lure in the water column, or that can be used to visually track the location and status of fishing line and associated hooks and bait. A bobber can be attached to fishing line and is made of wood, cork, plastic, styrofoam, or other material. It can be any size, shape, or color.

(G) SINKERS. A sinker is any device wholly or in part made of lead or another metallic substance designed to attach to a fishing line or to items of terminal tackle in order to cause the terminal tackle to descend into the water column. A sinker can be of any size or shape.

(H) SNAPS. A snap is a catch, clip, or fastening device. It is designed at one end to attach to a swivel or tie onto the end of a fishing line and to attach, by means of a clasp at the other end, to items of terminal tackle.

(I) DRAYLES. A drayle (or drail) is any article made, wholly or in part, of lead or another metallic substance that can be tied or otherwise attached to the end of a fishing line to which are attached leaders or other items of terminal tackle. A drayle (drail) is designed to be trolled behind a boat so that the line or terminal tackle descends into the water column.

(J) SWIVELS. A swivel is any device designed so that fishing line and/or items of terminal tackle can be attached to one or more of the ends of the device. The device is also designed so that the end(s) of the fishing line and/or items of terminal tackle attached to the ends of the device can pivot freely.

No tax is imposed on the sale of items otherwise considered to be terminal tackle if they are designed for use and ordinarily are used on fishing line over 130 pounds test. The term "terminal tackle" does not include natural baits.

(6) SPECIFIC ITEMS OF FISHING SUPPLIES, ACCESSORIES AND EQUIPMENT.

(A) FISH STRINGERS. A fish stringer is any article designed or sold as a device for attaching fish through the opercular opening and mouth. The term includes any device consisting of a series of metal or plastic clips, as well as a cord consisting of a ring and threader connected by the cord.

(B) CREELS. A creel is any portable container designed for storing and carrying fish from the time they are caught until the time they are removed from the container for consumption or preservation. A creel can be made of any material.

(C) TACKLE BOXES. A tackle box is a portable container primarily designed, intended for use, or sold as an item in which to store or organize fishing paraphernalia like hooks, lures, flies, sinkers, or bobbers, until the items are placed on a fishing line, rod, or reel. A tackle box can be made of any material.

(D) BAGS, BASKETS, AND OTHER CONTAINERS DESIGNED TO HOLD FISH. A bag, basket, or other container designed to hold fish is a container designed to be hung over the side of a boat or other structure to keep fish captive and alive in the water. These containers may be made of any material. The term includes collapsible baskets or any similar device designed for the same purpose.

(E) PORTABLE BAIT CONTAINERS. A portable bait container is any portable device designed or sold as an article to hold or transport bait in connection with recreational fishing activities. Examples of portable bait containers are minnow buckets, killy cars (floating cages), and grasshopper cages.

(F) FISHING VESTS. A fishing vest is a garment designed for storing various lures, flies, hooks, or other fishing paraphernalia. A fishing vest may also have the capacity to store fish. A fishing vest is usually made from durable, water- repellent material. The term "fishing vest" includes vests with flotation capacity, but not vests that are intended solely as flotation devices.

(G) LANDING NETS. A landing net consists of a handle connected to a hoop that is covered by a bag-type net. A landing net is primarily designed for scooping fish out of the water and onto shore, into a vessel, or onto any structure. Any fishing net is taxable as a landing net if it can be used as a landing net and if it incorporates in its design the three major components of a landing net -- a handle, a hoop, and bag-type net. A landing net may have a telescoping handle or may be made of material that floats.

(H) GAFF HOOKS. A gaff hook consists of a handle and a hook. A gaff hook is primarily designed for holding or lifting fish onto shore, into a vessel, or onto any structure once a fish is brought to the shore, boat, or structure on the end of a fishing line. A gaff hook can be made of any material and can be any size. The hook on a gaff hook may or may not be barbed. The term "gaff hook" includes, but is not limited to, straight or fixed-head gaffs, flying gaffs, and tuna hooks.

(I) FISHING HOOK DISGORGERS. A fishing hook disgorger is any implement designed to remove fishing hooks from the mouth, gill, arches, or stomach of fish. A fishing hook disgorger can be made of any material. Pliers are not considered fishing hook disgorgers for purposes of this section.

(J) DRESSING FOR FISHING LINES AND ARTIFICIAL FLIES. A dressing for fishing lines or artificial flies is any substance designed to be applied to a fishing line or an artificial fly to enhance the flotation of the line or fly or that is otherwise designed to attract fish to the artificial fly.

(7) FISHING TIP-UPS AND TILTS. A fishing tip-up or tilt is a device used in ice fishing that is designed to alert the person fishing that a fish is hooked, in the process of attempting to eat bait on a hook, or in the process of attempting to bite a bait or lure. A fishing tip-up or tilt consists of parts such as a spool on a spindle and a spring-mounted flag on opposite ends of a verticle pole or arm, with cross members to support the pole or arm over a hole in the ice. A fishing tip-up or tilt need not have a spring-mounted flag to be considered taxable under this section.

(8) FISHING ROD BELTS. A fishing rod belt is an article that fastens around or near the waist of the person fishing. It is designed for holding the butt end of a rod or pole in a cup-like depression to aid in the handling of the rod or reel. A gimbal belt is an example of a fishing rod belt.

(9) FISHING ROD-HOLDERS. A fishing rod-holder is a device that is portable and can be inserted into a beach, clamped onto a boat, or mounted onto any structure. A fishing rodholder holds a rod or pole in a stationary position relative to the beach, boat, or structure. A storage rack for rods, generally known as a rod rack, is not considered a fishing rod-holding for this purpose.

(10) FISHING HARNESSES. A fishing harness is any article worn by an angler to transmit muscular power to the rod or to absorb strain. Fishing harnesses are usually made of canvas, leather, and/or similar materials, and have straps with devices that can be fastened to the reel and/or sockets into which the rod butt may be seated. A fighting chair harness is an example of a fishing harness.

(11) FISH FIGHTING CHAIRS. A fish fighting chair is a heavily built chair usually designed to have a footrest, rod holder, and swivel base attached. A fish fighting chair is usually permanently installed in a suitable fishing boat for the purpose of fighting deep sea fish with rod and reel. However, the chair may be mounted in the boat so as to be removable.

(12) FISHING OUTRIGGERS. A fishing outrigger is a device, or pair of devices, attached to a boat, consisting of a braced rod or tube, with a means for attaching a fishing line out and away from the boat for trolling purposes. A fishing line is attached to a fishing outrigger in such a way that when a fish strikes the bait, the line is released from the outrigger so that the fish may be fought directly with rod and reel. A fishing outrigger can be of any size.

(13) FISHING DOWNRIGGERS. A fishing downrigger is a device used for submerging and lowering a fishing line and bait down and away from a boat while trolling. A downrigger usually consists of a boom and reel attached to the boat supporting a cable (downrigger line) and weight (sinker), with a means for attaching fishing line in such a way that when a fish strikes the trolled bait, the line is released from the weight so that the fish may be fought directly with rod and reel.

(14) ELECTRIC OUTBOARD BOAT MOTORS. An electric outboard motor includes an electricially powered motor designed to be attached to the outer surface of a boat to facilitate the movement of the boat through the water.

(15) SONAR DEVICES SUITABLE FOR FINDING FISH. A sonar device suitable for finding fish includes any such device except sonar devices that are graph recorders, digital type devices, and meter readout devices. Similarly, any combination sonar device that includes a graph recorder or meter readout is not taxable as an article of sport fishing equipment. Any other combination device is taxable.

Generally, articles of fishing equipment not specified in sections 4162(a) or 4152(b) of the Code are not subject to tax. Examples of such articles are: portable folding fishing chairs, rod- holders or fishwells designed for permanent installation, and fishing kites. Items of terminal tackle that may not be specifically enumerated in section 4162(a)(5) are subject to the tax.

The tax imposed by section 4161 of the Code applies only to articles of sport fishing equipment that are designed or constructed for use in the sport of fishing. Accordingly, the tax does not apply to those articles that, although nominally articles of sport fishing equipment, are in the nature of toys or novelties that merely simulate articles of sport fishing equipment, and are not designed or constructed for practical use in sport fishing. Except for items of terminal tackle designed for use and ordinarily used on fishing line over 130 pounds test, an article otherwise defined in this revenue ruling as an article of sport fishing equipment is subject to tax under section 4161 unless the taxpayer shows that the article is primarily designed for a purpose other than recreational fishing. If, however, such article as a practical matter can be used for recreational fishing as well as another purpose, the article is subject to tax under section 4161.

Section 4161(a) of the Code subjects to excise tax all parts and accessories for taxable sport fishing equipment that are sold on or in connection with the equipment, or in connection with its sale. The tax attaches in such cases whether or not charges for the parts or accessories are billed separately. To be considered a part or accessory for an article of sport fishing equipment specified in section 4162(a), an item must be either essential to the operation of the specified article, or be designed to improve its performance or appearance.

DRAFTING INFORMATION

The principal author of this revenue ruling is Theodore N. Margopulos of the Individual Tax Division. For further information regarding this revenue ruling contact Mr. Margopulos on (202) 566-3582 (not a toll-free call).